7 California employment law changes in 2023

HR leaders need to know how these affect salary ranges, paid sick leave, sexual assault claims and more

7 California employment law changes in 2023

New employment laws have gone into effect in California as of Jan. 1, 2023.

Additionally, the state minimum wage has increased to $15.50 for all employers.

Here’s a breakdown of what HR leaders need to know to be compliant moving forward.

SB 1126: Retirement planning

During the summer, a new law required employers in California with five or more employees to offer a retirement plan, whether that be a private-market option or the state-run CalSavers program, which manages a payroll deposit retirement savings arrangement. The new law expands the definition of an “eligible employer” to include a person or entity that has at least one eligible employee while excluding sole proprietorships, self-employed individuals or other business entities that do not employ any individuals other than the business owners.

Protecting employees’ financial futures has been a priority for state officials since learning that more than 7.5 million California workers – disproportionately women and people of color who work for smaller businesses – have no access to workplace retirement savings tools, according to CalSavers. As a result of the legislation, there has been a 76% year-over-year increase in California companies adopting low-cost, accessible retirement plans, according to Kristen Carlisle, general manager at Betterment at Work, a 401(k) plan leveraged by New York City-based Betterment’s retail investment platform.

SB 1044: Preventing retaliation during emergency condition

An “emergency condition” is defined as either a.) conditions of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act; or b.) an order to evacuate a workplace, a worksite, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act. However, an “emergency condition” doesn’t include a “health pandemic.”

This law prohibits an employer from taking or threatening adverse action against any employee for refusing to report to, or leaving, a workplace or worksite within the affected area because the employee has a reasonable belief that the workplace or worksite is unsafe. The law also bars an employer from preventing any employee from accessing their  mobile device or other communications device for seeking emergency assistance, assessing the safety of the situation or communicating with a person to confirm their safety.

When feasible, an employee is required to notify the employer of the emergency condition requiring the employee to leave or refuse to report to the workplace or worksite prior to leaving or refusing to report.

SB 1162: Expanding pay transparency requirements

The new law expands upon the framework of the California Equal Pay Act, which requires employers in the state to disclose the pay range for a job if an applicant asks for it after an initial interview, as well as Senate Bill 973, in which private employers with 100 or more employees are required to submit a pay data report to the California Department of Fair Employment and Housing (DFEH) that includes the number of employees by race, ethnicity and sex.

Under the new California law, all employers in the state with at least 15 workers must include the hourly rate or salary range on job listings and provide the pay scale to current employees upon request. Although California-based companies hiring outside of the state won’t be required to include salary ranges on those job listings, companies based out-of-state and hiring for jobs to be performed in California will be required to disclose pay ranges.

Plus, employers with 100 or more employees must report the median and mean hourly rate “within each job category, for each combination of race, ethnicity and sex.” Similarly, employers that retain 100 or more workers through labor contractors must submit a pay data report covering those workers. Finally, employers must maintain a record of each employee’s job title and wage history during employment and for three years thereafter.

“It’s crucial that employers begin to set pay scales, prepare for pay audits and determine additional processes needed to best comply with this law,” Tanya Jansen, co-founder of HR tech firm beqom, told HRD. “In the push for pay transparency, state legislators are working to create more equal workplace environments. At the same time, workers are beginning to understand their worth and value their time, making transparency even more important.”

AB 2777: Extends statute of limitations for sexual assault claims  

The U.S. Equal Employment Opportunity Commission (EEOC) files, on average, more than 7,000 sexual harassment allegations every year. You’d think there’d be a significant decrease during the COVID-19 pandemic, considering that many employees transitioned to working from home. Yet, 6,587 sexual harassment private sector charges were filed with the EEOC in fiscal year 2020. That’s only a 12% decrease from 2019, and on par with the amount of charges filed annually from 2014-2017.

Last year, President Joe Biden signed H.R. 4445 (commonly referred to as the #MeToo bill) into law. It not only prohibits employers from requiring mandatory arbitration of claims involving allegations of sexual harassment or sexual assault going forward, but also nullifies any existing policies or agreements that require those claims to be arbitrated, as well.

On the heels of the #MeToo law, California’s new law (which expires Dec. 31, 2026) revives sexual assault claims that occurred on or after Jan. 1, 2009, that would otherwise be barred solely because the statute of limitations has or had expired. The bill also revives claims that occurred on or after the plaintiff's 18th birthday when one or more entities are legally responsible for damages and the entity or their agents engaged in a “cover up,” which is defined as a concerted effort to hide evidence relating to a sexual assault that incentivizes individuals to remain silent or prevents information relating to a sexual assault from becoming public or being disclosed to the plaintiff, including, but not limited to, the use of nondisclosure agreements or confidentiality agreements.

AB 1949: Bereavement leave

The new law requires employers to offer employees (who have been with the company for at least 30 days) up to five days of bereavement leave for a family member, defined as a spouse, domestic partner, child, parent, parent-in-law, sibling, grandparent or grandchild.

Bereavement leave doesn’t need to be taken consecutively, but it must be completed within three months of the family member’s passing. An employer is permitted to ask for proof of documentation of death within 30 days of the first day of leave. Unless a current bereavement leave policy exists, the five mandated days can be unpaid. However, if an existing policy provides paid bereavement leave, employees can take those days and any additional unpaid days that meets the five-day requirement.

AB 1041: Paid sick leave

Under the amended California Family Rights Act (CFRA), an employee may take unpaid leave to care for a “designated person,” defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” Under the amended California's Healthy Workplaces Healthy Families Act (HWHFA), an employee may take paid leave to care for a “designated person,” defined as “a person identified by the employee at the time the employee requests paid sick days.”

AB 2068: Posting Cal/OSHA information

The new law requires that any time Cal/OSHA issues a citation or order that is to be posted in the workplace, the employer must post the notice in English, as well as the top seven non-English languages used by limited-English-proficient adults in California, as determined by the most recent U.S. Census Bureau American Community Survey, plus Punjabi (if not already included in the top seven). Cal/OSHA is responsible for drafting the alternate-language notices, which must be posted at or near each place a violation referred to in the order/citation occurs.

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