We’re providing a summary of select new employment laws for 2024

Excerpted from premier employment law firm AALRR’s Legislative update: AALRR 2024 Legislative Update and Venable, LLP

For the full summary go to AALRR 2024 Legislative Update.

AB 1076 and SB 699 (Non-Compete Agreements)

AB 1076 codifies Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937 by specifying that California’s statutory provision voiding noncompete contracts is to be broadly construed to void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how narrowly tailored, that does not satisfy specified exceptions. California’s Unfair Competition Law (UCL) makes various practices unlawful and makes a person who engages in unfair competition liable for a civil penalty. The bill states that these provisions are applicable to contracts where the person being restrained is not a party to the contract.

AB 1076 also makes it unlawful to include a noncompete clause in an employment contract or to require an employee to enter a noncompete agreement, that does not satisfy specified exceptions. AB 1076 requires employers to notify current and former employees in writing by February 14, 2024, that the noncompete clause or agreement is void. This bill would make a violation of these provisions an act of unfair competition pursuant to the UCL.

On a related note, SB 699 establishes that any contract that is void under California’s non-compete prohibition is unenforceable regardless of where and when the contract was signed. The bill prohibits an employer or former employer from attempting to enforce a contract that is void regardless of whether the contract was signed, and the employment was maintained, outside of California.

AB 365 (Arbitration Agreement Enforcement)

This bill provides that trial court proceedings will not be automatically stayed during the pendency of an appeal of an order dismissing or denying a petition to compel arbitration.

SB 553 (Workplace Violence Prevention Plans)

SB 553 requires all employers, with few exceptions, to design, implement, and maintain workplace violence prevention plans (“WVPP”) by July 1, 2024. WVPPs will be structured similar to IIPPs and will require an employer to designate the person responsible for implementing the program, identify and correct hazards through periodic inspections, train employees on hazards, and maintain records of incidents. However, unlike an IIPP, the law requires employers “to obtain the active involvement of employees” and any unions “in developing and implementing the plan, [and], in designing and implementing training.”

Additionally, the law requires employers to train employees on numerous topics, including the law’s definitions and requirements, the WVPP itself, the documentation required under the plan, how to report incidents and concerns, and ways employees can participate in the WVPP’s development and implementation.

The law also requires employers to maintain various records, including a separate violent incident log, records of the employee’s training, and records of workplace violence investigations. Under the new law, employee concerns of workplace violence must be investigated as part of the employer’s responsibility to identify and correct workplace hazards, and then the results of the investigation must be communicated to the employee. Employers also have a duty to conduct an investigation after incidents of workplace violence.

SB 616 ( Expansion Paid Sick Leave)

SB 616 expands paid sick leave entitlements for California employees to 40 hours or five days (whichever is greater) per year effective January 1, 2024 by amending California Labor Code sections 245.5, 246, and 246.5.

Employers will generally have the following three options to choose from for paid sick leave compliance purposes:

· As before, the employee can accrue one hour of sick leave for every 30 hours worked; or

· The employee can receive an upfront grant of 40 hours or five days of paid sick leave (whichever is greater) at the beginning of employment and each 12-month period thereafter (“front-loading”) (no carryover or accrual of sick leave is required); or

· As before, the employee can accrue sick leave at a rate other than one hour of sick leave for every 30 hours worked, provided the accrual is regular and results in the accrual of no less than 24 hours or 3 days of sick leave by the 120th day of employment and no less than 40 hours or 5 days of sick leave by the 200th day of employment.

When sick leave is accrued (i.e., it is not being frontloaded), SB 616 allows employers to impose a maximum accrual cap of 80 hours or 10 days and a use limit of 40 hours or five days per 12-month period. Under existing law, the allowable maximum accrual cap is 48 hours or six days and the allowable use limit is 24 hours or three days per 12-month period.

SB 616 also changes the sick leave requirement for providers of in-home supportive services and individual providers of waiver personal care services effective January 1, 2024, to permit an upfront grant of 40 hours or five days of sick leave, with no accrual or carryover, at the beginning of employment and each 12-month period thereafter.

Off-Duty/Off-Premises Cannabis Users (SB 700) ( Venable, LLP)

Last year, AB 2188 amended California's Fair Employment and Housing Act (FEHA) effective January 1, 2024, to prohibit adverse employment actions based on off-duty marijuana use that does not affect job performance. Specifically, effective January 1, 2024, it will be unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment based upon (1) a person's use of cannabis off the job and away from the workplace, or (2) an employer-required drug screening that has found an employee to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.

SB 700 expands employee protection by also prohibiting employers from requesting information from an applicant relating to their prior use of cannabis or using information obtained about a person's prior cannabis use obtained from the person's criminal history, unless one of the limited exceptions set forth in California Government Code Section 12952(d) is met. Such exceptions include the following: (1) a position for which a state or local agency is otherwise required by law to conduct a conviction history background check; (2) a position with a criminal justice agency; (3) a position as a farm labor contractor; or (4) a position where an employer or agent thereof is required by state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history.

In sum: (a) employers can still prohibit employees from using or being impaired by cannabis at work, but cannot prohibit cannabis use away from work that does not affect their work; and (b) employers cannot ask applicants about their cannabis use or even check their criminal history for cannabis use (unless certain limited exceptions apply).

SB 723 (Rehire / Retention of Displaced Employees in Hospitality and Service Industries)

This bill amends SB 93, signed by the Governor in 2021 and which required certain employers in hospitality and service industries to rehire employees laid off due to the COVID-19 pandemic. Current law requires a covered employer to offer its laid-off employees specified information about job positions that become available for which the laid-off employees are qualified, and to offer positions to those laid-off employees based on a preference system, in accordance with specified timelines and procedures until December 31, 2024. The law also prohibits a covered employer from refusing to employ, terminating, reducing compensation, or taking other adverse action against a laid-off employee for seeking to enforce their rights under these provisions.

Existing law defines the term “laid-off employee” to mean any employee who was employed by the employer for six months or more in the 12 months preceding January 1, 2020, and whose most recent separation from active service was due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, a reduction in force, or other economic, nondisciplinary reason related to the COVID-19 pandemic.

This bill redefines “laid-off employee” to mean any employee who was employed by the employer for six months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, reduction in force, or other economic nondisciplinary reason due to the COVID-19 pandemic. The bill creates a presumption that a separation due to a lack of business, reduction in force, or other economic, nondisciplinary reason is due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence.

These requirements will expire on December 31, 2025.

SB 848 (Reproductive Loss Leave)

SB 848 makes it an unlawful employment practice for an employer to refuse to grant a request by an eligible employee to take up to five days of reproductive loss leave following a reproductive loss event.

A “reproductive loss event” means the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.

An employer may not require supporting information from the employee. The bill requires leave to be taken within three months of the event. While this leave may be unpaid, an employee may apply their accrued, available paid sick leave.

Additional Whistleblower Protections (SB 497) ( Venable, LLP )

SB 497 amends California Labor Code Sections 98.6, 1102.5, and 1197.5 to create a rebuttal presumption of retaliation if an employee is disciplined or discharged within 90 days of certain protected activity.

• Labor Code Section 98.6 prohibits an employer from taking adverse employment action against an employee because the employee has reported wage and hour violations

• Labor Code Section 1102.5 prohibits an employer from taking adverse employment action against an employee who threatens to disclose, or discloses, information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of a state or federal statute, rule, or regulation

• Labor Code Section 1197.5 prohibits an employer from taking adverse employment action against an employee for reporting or attempting to enforce rights pertaining to equal pay

SB 497 does not change the substance of the retaliatory acts that are prohibited. But if an employer takes adverse action against an employee within 90 days after that employee engages in an activity protected by those statutes, SB 497 places the burden on the employer to show some other legitimate, non-retaliatory reason for the adverse employment decision. This means it is more important than ever to accurately document performance issues and discipline in a timely manner.

Thank you and we hope these updates are relevant to your business.