Key Legal Updates All California Employers Should Know for 2024

Employment laws in California are always changing, and it is important for employers in California to keep up with these changes to ensure their policies and practices are compliant. This blog post provides key updates to the California employment laws that all employers should know for this year.

Minimum Wage Increase

Beginning January 1, 2024, the state minimum wage for all employers has been increased to $16.00 per hour. This rate reflects a 3.5% increase from this year’s minimum wage based on the law’s provision that allows this increase if the national Consumer Price Index (“CPI”) is over 7%. All employers must post the current minimum wage rate in a common area where employees can easily view it.

With this new rate of $16.00/hour, the minimum salary for exempt employees in 2024 has also increased to $66,560.00/year. Note that the minimum salary is tied to the state minimum wage rate, not individual municipalities.

Employers should also check if there is a higher minimum wage in any city or municipality where they have employees working (typically 2 hours/week is the minimum). For example, the minimum wage in Santa Rosa has increased to $17.45/hour.

Increase in Paid Sick Leave Amount to 5 Days

As of January 1, 2024, the amount of paid sick leave that must be provided to employees under the Healthy Workplaces, Healthy Families Act increased to five (5) days, or 40 hours, per year. Employers can still choose to either provide paid sick leave in a lump sum each year or allow employees to accrue paid sick leave based on hours worked.

The minimum accrual rate is still one (1) hour for every 30 hours worked. If paid sick leave is accrued, employees must now be allowed to accrue up to a cap of at least ten (10) days, or 80 hours. However, employers can limit employees’ actual use of accrued sick leave to five (5) days, or 40 hours per year.

Reproductive Loss Leave Required for All Employers with 5 or More Employees

Beginning January 1, 2024, private employers with five (5) or more employees are required to provide all employees who have worked for the employer for at least 30 days with five (5) days of unpaid, protected leave following a reproductive loss event, which includes a failed adoption, failed surrogacy, miscarriage, stillbirth or an unsuccessful assisted reproduction.

The five days of leave do not have to be taken consecutively but must be completed within three months of the reproductive loss event. This new leave is available for each qualifying reproductive loss event; however, employers have the right to limit the maximum amount of leave under the policy to no more than 20 days in a 12-month period.

Off-Duty Cannabis Use Added as a Protected Class Under FEHA

Starting January 1, 2024, off-duty cannabis use was added as a protected class under the state’s Fair Employment and Housing Act law (“FEHA”). The law specifically prohibits any adverse employment actions taken against an employee for off-duty cannabis use and prohibits an employer from drug screening for cannabis. Employers may still prohibit on-duty possession, impairment, or use. Additionally, the law does not apply to employees in the building or construction trades, or employees that work in positions that require federal background investigations or security clearance under federal law.

Non-Compete Agreements With Employees Still Prohibited in California

Under existing law in California, non-compete agreements with employees are and have been void and unenforceable. Nonetheless, the state has passed two new laws regarding post-employment non-compete agreements that both went into effect on January 1, 2024.

The first law confirms existing case law and voids all unlawful noncompete agreements contained in employment contracts. Under this law, employers are required to individually notify all current employees, and former employees who were hired after January 1, 2022, whose employment contracts include a noncompete clause or who were required to sign a noncompete agreement that such clauses or agreements are void. The notice must be given in writing by no later than February 14, 2024. The notice can be by email, but it must be an individualized communication to each employee or former employee.

The second law confirms that all noncompete agreements are void and unenforceable regardless of where and when the contract was signed. Even if the contract was signed in another state with an employee who was working outside of California, it cannot be enforced in California. The law also makes it a civil violation for employers to enter into or try to enforce unlawful noncompete agreements. Further, the law gives employees the right to bring a civil action against an employer that attempts to enforce an unlawful noncompete agreement, which allows the employee to seek damages and attorneys’ fees and costs in addition to injunctive relief.

New Presumption of Retaliation for Adverse Actions Taken Within 90 Days of Protected Activity

Starting January 1, 2024, if an employer takes any adverse action against an employee within 90 days of the employee engaging in so called “protected activity,” it will create a rebuttable presumption of retaliation under the law. An employer who violates this provision will be liable for a civil penalty of up to $10,000 per employee to be awarded to the employee(s) that was retaliated against. “Protected activity” is defined broadly and includes, among other things, employees who make an internal complaint about working conditions, wages, harassment, etc., an employee who files a suit or complaint with an agency against the company and an employee who testifies in a proceeding against the employer.

NLRB Decision in Stericyle Requires Employers to Review Their Handbook Policies

In 2023, the National Labor Relations Board (“NLRB”) issued a decision in Stericycle, Inc. and Teamsters Local 628 regarding workplace policies and the effect they have on employee rights under the National Labor Relations Act (the “NLRA”). The decision states that workplace policies cannot infringe on employees’ rights under the NLRA, either directly or indirectly. This includes policies that could discourage employees from engaging in protected activities under the NLRA. Employees’ rights under the NLRA, which are protected, include: the right to form or join unions, the right to engage in protected, concerted activities to address or improve working conditions and the right to refrain from engaging in these activities.

Employers should review their handbook policies and make sure they are drafted so that their policies do not “chill” employees’ exercise of their rights under the NLRA.

Additional Updates and Reminders

Updated Wage Theft Notice (Required for all Non-Exempt Employees Upon Hire)

The Notice to Employee required under Labor Code Section 2810.5 – also referred to as a “Wage Theft Notice” – has been updated for 2024.  All employers are required to use the new form. You can access the revised Wage Theft Notice here.

Updated Harassment Poster

The California Civil Rights Department (CRD) has updated their “California Law Prohibits Workplace Discrimination and Harassment” poster. Employers are required to display this poster in a common area where employees can easily view it. You can access the new updated poster here.

IRS Mileage Reimbursement Rate Increase

Starting January 1, 2024, the Internal Revenue Service (IRS) has increased the standard mileage rate by 1.5 cents per mile for 2024 to 67 cents per mile.

Overtime Change for Small Agricultural Employers

For employers with 25 or fewer employees, the phase in for overtime rules for agricultural workers continues in 2024 with daily overtime for any hours worked in excess of 8.5 hours in a day and 45 hours in a week.

Workplace Violence Prevention Plan Required by July 1, 2024

Starting July 1, 2024, all employers are required to establish and maintain a workplace violence prevention plan as part of their Illness Injury Prevention Plan (“IIPP”), which will include maintaining a violence incident log and providing effective training on the workplace violence prevention plan. We will be doing a more detailed blog post on the requirements for the new plan in the Spring.

Employers should reach out to their workers’ compensation carrier for assistance with updating their IIPP accordingly.

For more information reach out to the DP&F Employment Law partners Jennifer E. Douglas and Marissa E. Buck.