Get ready for these new California business laws for 2023

The new year is nearly upon us, and if you’re running a business, we all know what that means: Make sure you’re prepared for new laws, some that take effect in mere weeks, that will impact your business.

Here are the topics covered in this report:

Leaves of absence

Assembly Bill 1041 amends two laws by relaxing the definition of people an employee can take off time to care for.

The new law adds a “designated person” to the category of existing permitted family members that include a spouse, registered domestic partner, child, parent, parent-in-law, grandparent, grandchild and sibling.

The new law, taking effect Jan. 1, expands both the California Family Rights Act and California’s paid sick leave law, called the Healthy Workplaces, Healthy Families Act.

The difference between the their definitions of a designated person is negligible.

The California Family Rights Act defines a designated person as an employee’s blood relative or someone who the employee considers family, while the Healthy Workplaces, Healthy Families Act’s definition is someone the employee identifies at the time he or she requests the paid sick days.

In both cases, an employer can limit an employee to one designated person per year.

Meanwhile, Assembly Bill 1949 makes it unlawful for employers to discriminate or retaliate against staffers who take bereavement leave. Employers are permitted, however, to request workers provide proof of the death that requires the leave.

Authored by Assemblyman Evan Low, D-San Jose, the legislation takes effect Jan. 1 and applies to private employers with five or more employees and all public-sector employees.

Although many employers already have bereavement policies in place, this is a good time to review and make sure they are compliant with the new legislation, according to the Society for Human Resource Management.

“As with any kind of leave entitlement, it is always a best practice to have a formalized policy that is applied uniformly,” Stephanie Kierig, an attorney with Jackson Lewis in San Diego, told the society in a Sept. 30 article. “(Employers) should also evaluate how a bereavement-leave policy would affect their operations and how such a policy should be implemented.”

Workers are eligible for bereavement leave if they have worked for their current employer for at least 30 days. The leave also must be taken within three months of the death.

Another new law, Senate Bill 951, addresses paid family leave by extending one year a program that was set to expire at the end of 2023. In addition, starting in 2025, the legislation increases wage-replacement rates for the family leave and State Disability Insurance programs — from 70% of an employee’s regular wages to 90%, depending on the employee’s earnings.

California currently has a paid family leave grant program in place to help small businesses offset the costs when an employee is out, including cross-training existing staff, and bringing on new or temporary employees. Eligible business can receive up to $2,000 under the grant, which ends May 31, 2024, or when funds run out.

Pay scales and pay data

SB 1162 requires companies that employ at least 15 people to include salary ranges in all job postings and provide them to existing employees upon request.

Backers say the law, drafted by Sen. Monique Limón, D-Santa Barbara, is intended to push for salary transparency and pay equity for all, the North Bay Business Journal reported Oct. 6. Businesses with 100 or more employees already must submit this information to the state.

Businesses that don’t comply with the law, which includes reporting employees’ salary, sex, race, ethnicity, hours worked and job category, will face penalties, according to the legislation.

Those penalties allow the state to seek court orders to fine employers for not complying with the law starting at $100 per employee, and up to $200 per employee for a subsequent failure.

Further, the new law permits the California Labor Commissioner to order the employer to pay a civil penalty of no less than $100 per employee and no more than $10,000 per violation.

“It cannot be overstated, with the impending law, now is a good time for employers to do a review of all employee salaries to make sure they are in line with upcoming positions,” said Sarah Grimstead, regional vice president with Houston-based Insperity, a national HR services provider.

“Doing the work today and making the appropriate adjustments, if necessary, can prevent many challenges downstream.”


Employers have one more year to comply with AB 2188, which bans employers from discriminating against employees or job applicants based on their use of cannabis off the job and away from the workplace.

“It is a big deal,” Lisa Ann Hilario, partner with Spaulding McCullough & Tansil law firm in Santa Rosa, told the North Bay Business Journal on Sept. 21. “Because the use of cannabis is legal in California, you had people disqualified for jobs or facing discipline from jobs if they came up with a positive cannabis test even if they were not impaired at work.”

Employers can continue to conduct pre-employment drug testing, and still refuse to hire a job candidate who tests positive for the psychoactive form of cannabis.

Law exceptions include businesses with federal contracts or employees needing security clearance because marijuana remains illegal at the federal level. Those in the building and construction trades also fall outside of the new law.

Marijuana is the most prevalent drug that shows up in employee drug tests, according to a 2022 report by Quest Diagnostics. The company reports positive marijuana tests going up in each of the last five years for U.S. workers.

Another discrimination law on the books to take effect Jan. 1 is SB 523, the Contraceptive Equity Act of 2022.

It includes a provision revising the California Fair Employment and Housing Act that makes it illegal to discriminate against an employee or job applicant based on their “reproductive health decision-making” to use or access a particular drug, device, product or medical service for reproductive health, the legislation, authored by Sen. Connie M. Leyva, D-Chino, states.

Workplace safety

Starting Jan. 1, SB 1044 prohibits an employer from taking or threatening adverse action against any employee for refusing to come to work, or leaving, if the employee has a “reasonable belief” that the workplace or work site is unsafe. That includes taking an employee’s mobile device and preventing him or her from seeking help.

It also requires an employee to notify the employer of the emergency condition requiring the employee to leave or refuse to report to the workplace or work site.

Authored by Sen. Maria Elena Durazo, D-Los Angeles, the law defines an emergency condition as:

• Conditions of disaster or extreme peril to the safety of persons or property at the workplace or work site caused by natural forces or a criminal act.

• An order to evacuate a workplace, work site, worker’s home, or the school of a worker’s child due to natural disaster or a criminal act.

The law states that an emergency condition does not include a health pandemic.

SB 1044, however, does not apply to all employees. First responders, disaster-service workers, health care workers that provide direct care to patients, and employees whose roles are tied to public safety are among those excluded from the legislation.

Privacy rights

It’s been two years since voters passed the California Privacy Rights Act, which amended the California Consumer Privacy Act by strengthening privacy laws that prohibit businesses from collecting and sharing consumers’ personal data without their prior consent or knowledge.

Among the amendments taking effect Jan. 1, companies will no longer be allowed to collect information about their workers. Additionally, other than the right to access, the law applies to personal information collected by a business on or after Jan. 1, 2022.

Efforts by the business community to keep or extend the exclusions weren’t successful, according to multiple reports.

COVID-19 exposure

AB 2693 amends and extends a 2020 law that requires employers to notify staff, and anyone else at a work site, of a potential COVID-19 exposure. That notification had to be done in writing and within one business day of the known exposure. Employers were also required to report COVID-19 cases to local health departments.

The law was set to end on Jan. 1 but has been revised and extended one year.

Under AB 2693 changes, employers may post a notice in the workplace instead of notifying employees, and anyone else who was on the premises, of a possible exposure to COVID-19. The posted notice must include the dates and location of the potential exposure at the workplace, and remain posted for 15 days.

The amended law also relieves employers of having to report COVID-19 cases to their local health departments.

CalSavers program

SB 1126 makes changes to CalSavers, the state’s retirement savings program for private-sector employees whose employers don’t offer a retirement plan. The legislation expands the definition of an “eligible employer” to a person or entity with at least one employee, rather than five.

SB 1126 also stipulates business entities that are excluded from the eligible employer definition: sole proprietorships, self-employed people, and businesses that don’t employ anyone other than the owners.

The legislation also requires eligible employers to have a payroll-deposit retirement-savings system for their employees in place by Dec. 31, 2025.

Minimum wage increase

On Jan. 1, California’s minimum wage will rise to $15.50.

That’s a 50-cent-per-hour increase for businesses with 26 or more employees, and $1.50 an hour for those with 25 or fewer. This will be the first time all employers in the state will pay the same minimum wage, regardless of size.

Legislation signed by then-Gov. Jerry Brown in 2016 tied increases beyond $15 an hour to inflation. Gov. Newsom announced in May that this latest increase was based on inflation exceeding 7%.

“The wage increase will benefit millions of California households that are struggling to keep pace with the highest rate of inflation in decades. For years, the state minimum wage has increased steadily while inflation numbers remained modest,” Newsom’s office said at the time.

Greater union protections

Farm workers will be able to vote by mail in union elections starting next year.

Under AB 2183, authored by Assemblyman Mark Stone, D-Monterey Bay, farm workers can choose to vote at a physical location or mail a representation ballot card to an Agricultural Labor Relations Board office. Newsom signed the bill at the end of September, one year after he vetoed an earlier iteration of the measure.

It was a major reversal by Newsom, whose staff had said less than a month earlier that he planned a second veto. He faced pressure from the United Farm Workers, who marched 335 miles to the Capitol, and from top Democrats including President Joe Biden, Vice President Kamala Harris and House Speaker Nancy Pelosi.

Also in the new year, government employers in California will face financial penalties for deterring or discouraging union activity. Under SB 931, the Public Employment Relations Board has the power to fine employers up to $100,000 if it finds that workers were prevented from participating in a union.

Maybe: Fast-food worker council

A groundbreaking law establishing a fast-food regulatory council was supposed to go into effect on Jan. 1 . But it now faces a potential referendum challenge backed by corporate restaurant chains like In-N-Out and Chipotle.

Gov. Newsom signed AB 257 on Labor Day. Opponents announced the referendum campaign a day later. Fast-food worker strikes followed, along with allegations that petitioners were lying to voters about what the referendum would actually do. On Dec. 5, the industry coalition submitted what they said was over one million signatures to the Secretary of State’s office for verification.

The state has yet to verify and approve the referendum for the 2024 ballot.

Sacramento Bee contributed the sections on the minimum wage, unions and fast-food industry council.

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