With 2023 coming to an end, there are many new employment laws taking effect in 2024. It is imperative for employers to familiarize themselves with these new laws to ensure their businesses are compliant in the new year. Below is a summary of some relevant laws that are going into effect in 2024 that may impact your operations:

Unenforceable and Void Noncompete Agreements
SB 699 was signed amending the California Business & Professions Code and making it unlawful for employers to enter into or attempt to enforce noncompete agreements. The new law establishes that noncompete agreements are void in California regardless of where the employee worked when the agreement was entered and/or where the agreement was signed. This new law expands the restrictions on noncompete agreements and creates more opportunities for employees to challenge noncompete clauses. The law is set to go into effect on January 1, 2024.

AB 1076 was also signed into law making it unlawful to include a noncompete clause in an employment contract and requires companies whose contracts included a noncompete clause to issue a notice that the noncompete clauses in their contracts are void. The notice must be issued by February 14, 2024, and requires that notice be given to all current employees and former employees who were employed after January 1, 2022. Employers who violate this new law may be liable for civil violations as the new bill authorizes both current and former employees to bring suit for injunctive relief and/or damages.

CA Updated Paid Sick Leave Law
Beginning January 1, 2024, employees must be able to use up to 40 hours or five days per year of paid sick leave. The California Legislature recently passed SB 616, which expands the number of paid sick days that California employers must offer to employees. California’s new law raises the number of paid sick leave days from three to five days per year. SB 616 also expands how sick days are accrued and used. This new law will increase the rolling accrual cap, the alternative accrual rate, and the frontloaded grant to avoid accrual and carryover. When this law becomes effective, California’s rolling accrual cap will be increased from 48 hours or six days to 80 hours or 10 days. SB 616 also includes a new section, which partially preempts local California paid sick leave ordinances that have different substantive standards. Many California local jurisdictions have their own independent sick leave laws that California employers will need to consider, unless such local ordinances provide lesser rights or are subject to preemption by the state law.

Leave for Reproductive Loss
SB 848 provides employees with up to five days of leave for a reproductive loss event. A reproductive loss event is defined as “the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.” This law limits the amount of reproductive loss leave to 20 days within a 12-month period. SB 848 will apply to private employers with five or more employees and public employers of any size and will go into effect beginning January 1, 2024. The leave may be unpaid except that an employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee. SB 848 also prohibits retaliation against an individual who uses reproductive loss leave or shares information about it.

Workplace Violence Prevention
SB 553 requires covered employers to establish and implement a workplace violence prevention plan and imposes certain recordkeeping and training requirements on employers. The workplace violence prevention plan must be implemented by July 1, 2024, and must comply with the requirements of Labor Code Section 6401.9. Some requirements include identifying people responsible for implementing and maintaining the plan, creating procedures to effectively communicate with employees regarding workplace violence, including how to report an incident, and creating procedures for post-incident response and investigation. This new law also requires employers to record information about every incident, post-incident, response, and workplace violation injury investigation. Cal/OSHA will adopt its own general industry workplace violence regulation by December 31, 2025.

Civil Procedure: Arbitration
In February 2023, the Ninth Circuit Court of Appeals struck down a California law that prohibited employers from requiring employees to sign arbitration agreements that are subject to the Federal Arbitration Act (FAA) as a condition of employment. More recently, the decision of Coinbase, Inc. v. Bielski held that the FAA requires district courts to stay proceedings during the interlocutory appeal of a denial of a motion to compel arbitration even though there is no express requirement in the text of the FAA for such a stay.

SB 365 amends California Code of Civil Procedure Section 1294, which required trial courts to stay proceedings while pending an appeal of a denial of a motion to compel arbitration. This new bill says that when a party appeals an order denying a motion to compel arbitration, the trial court is not obligated to stay the action during the pendency of the appeal. Employers will now need to persuade the trial court to stay an action during the pendency of appeal rather than having the right to obtain a stay in all cases. This law will take effect January 1, 2024.

Privileged Communications: Incidents of Sexual Assault, Harassment, or Discrimination
AB 933 was signed into law and makes communications made about an individual’s own workplace sexual assault, harassment, or discrimination a privileged communication. AB 933 also authorizes a defendant who prevails in an action related to making a privileged communication to recover its reasonable attorneys’ fees and costs. This new law will go into effect beginning January 1, 2024.

Discrimination in Employment: Use of Cannabis
Last year, AB 2188 was passed, which will go into effect beginning January 1, 2024. This law prohibits discrimination against a person in hiring, termination, or any terms or conditions of employment based upon an employee’s use of cannabis off the job and away from the workplace.

SB 700 will also go into effect beginning January 1, 2024, which will make it unlawful for an employer to request information from an applicant or employee about their prior cannabis use. SB 700 makes it unlawful for an employer to discriminate against a candidate or employee because of the person’s use of cannabis off the job and away from the workplace.

Employers Must Pay for Food Handler Cards
SB 476 will go into effect January 1, 2024, and will require restaurant employers to pay workers for all costs associated with obtaining a food handlers card. This new law also requires that employers treat time spent by employees obtaining the certification as hours worked, relieve employees of all other work duties during the period needed to complete the required training, and compensate employees for the cost of testing. Food handler training must be provided and taken during normal business hours and at no cost to the employee. To remain compliant under this new law, it is recommended that restaurant employers review their existing food handler policies, timekeeping policies, job advertisement practices, and new hire training procedures. SB 476 also prohibits employers from conditioning employment on an applicant having an existing food handler card.

Rebuttable Presumption of Retaliation
SB 497 creates a rebuttable presumption of retaliation when an employee alleges that they were subjected to an adverse employment action within 90 days of engaging in a protected activity. For example, if an employer takes disciplinary action after an employee has made a complaint about unequal pay, the employer will be presumed to have engaged in illegal retaliation. This presumption makes it easier for an employee to establish a prima facie case of retaliation. However, employers are able to rebut the retaliation presumption by showing that there is a legitimate, non-retaliatory reason for the employee discipline. SB 497 also increases the civil penalty imposed on an employer from $10,000 generally to $10,000 per employee per violation. This new law goes into effect January 1, 2024.

Notice Requirements
Labor Code § 2810.5 requires employers to provide all new hires a Notice to Employee that includes specific information.  Effective January 1, 2024, AB 636 requires employers to include “the existence of a federal or state emergency or disaster declaration applicable to the county or counties where the employee is to be employed, and that was issued within 30 days before the employee’s first day of employment, that may affect their health and safety during their employment.” In addition, employers must also update the 2810.5 notice to include the increased amounts of paid sick leave provided to employees as of January 1, 2024.

Public Prosecution for Labor Code Violations
AB 594 gives city and district attorneys the authority to prosecute employers, either civil or criminally, for workplace violations of the Labor Code. This new law also provides that any employment agreement that requires arbitration of a dispute would not affect the public prosecutors’ ability to enforce the labor code. This new law will remain in effect only until January 1, 2029.

Citizenship and Immigration Status Categorized as Sensitive Personal Information
Effective January 1, 2024, AB 947 expands the category of “sensitive personal information” to include citizenship or immigration status. The California Privacy Rights Act (CPRA) contains special restrictions on the collection, use, and disclosure of sensitive personal information. Employers who collect citizenship or immigration information, will now need to update their privacy policy, and revise and review their collection and processing of any sensitive personal information.

Federal Corporate Transparency Act
Beginning on January 1, 2024, unless a valid exemption applies, many companies in the United States will have to report information about their beneficial owners, i.e., the individuals who ultimately own or control the company. Reporting companies will have to report this information to the Financial Crimes Enforcement Network (FinCEN). Unlike many other federal business statutes, the compliance burden largely will be borne by small to medium-sized businesses, as the larger entities likely will find a qualifying exemption. Beneficial ownership information (BOI) reports must disclose certain information about the reporting company (e.g., name, address, taxpayer identification number) and its beneficial owners and company applicants (e.g., full legal name, date of birth, address, and passport or driver’s license number, with a photocopy of such document).

***Keep in mind the above is simply a brief overview of some of these new laws. There are also many other new regulations that may impact your business beginning in 2024. If you have any questions, or would like to discuss further, please contact our office.***