Employers with California employees know to anticipate a multitude of new employment laws each year, and 2023 will be no different. Governor Gavin Newsom has signed several bills into law that take effect on January 1, 2023, many of which may impact your organization.

Here are the California laws employers should look out for in 2023:

SB 1162 – Employer Pay Reporting and Publication of Pay Data

  • Requires all employers to provide pay scale information to job applicants and employees upon request
  • Requires employers with 15+ employees to include pay scales in all job postings, including postings by third parties such as Indeed or LinkedIn
    • Imposes civil penalties for failure to comply and allows employees to file civil litigation for alleged violations
  • Expands upon previous legislation requiring employers with 100+ employees to report specific pay data annually
    • Employers with 100+ employees must report to the state "within each job category, for each combination of race, ethnicity, and sex, the median and mean hourly rate"
    • Employers with 100+ contractors must include contractors' pay data
    • Imposes civil penalties on employers that fail to report required pay data

Key Takeaways: This law brings California law in line with similar pay transparency laws in Washington, Colorado, and New York City. Employers may want to consider conducting an audit of current compensation under attorney-client privilege, if possible, before this new law takes effect.

AB 1041 – Family Leave for "Designated Persons"

  • Expands California Family Rights Act (CFRA) so that employees can take job-protected leave to care for a "designated person"
  • "Designated Person" is defined as any individual related by blood to the employee or whose relationship with the employee is the "equivalent of a family relationship"
  • Employees may choose a "designated person" in advance or wait until the time they request leave to name a "designated person"
  • Employers may limit employees to one designated person per 12-month period

Key Takeaways: Employers should consider updating their handbook policies to include this expansion of eligibility under CFRA and also may wish to consider limiting employees to one designated person per 12-month period. California continues to expand eligibility under CFRA, and employers should anticipate additional expansions of who qualifies as a "family member" in the coming legislative sessions, in line with other West Coast states.

SB 1044 – State of Emergency

  • Allows employees to leave work or refuse to show up if they have a "reasonable belief" that the worksite is "unsafe"
  • Prohibits employers from threatening to retaliate or retaliating against employees who decide to leave the premises or not come to work during a state of emergency
  • The existence of any health and safety regulations specific to the emergency condition and an employer's compliance or noncompliance with those regulations are relevant factors if this information is known to the employee at the time of the emergency condition
  • "Emergency" does not include pandemics such as COVID-19

Key Takeaways: This law was passed to protect employees who choose not to work due to safety concerns during natural disasters, such as wildfires, or criminal acts, such as mass shootings. Employees must have a "reasonable belief" of imminent serious injury or death in order to invoke this law.

AB 1949 – Bereavement Leave

  • Provides for up to five days of bereavement leave upon the death of a family member, as defined under the California Family Rights Act (CFRA)
    • Includes spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law
  • Employee must take leave within three months of the death
  • Leave is unpaid but employee can use other available paid time (vacation/PTO, personal leave, or paid sick leave)
  • Employer can request supporting documentation
  • Thirty-day waiting period permitted for new hires

Key Takeaways: This law brings California law in line with similar Oregon bereavement leave law. Employers with existing bereavement policies can use the existing policies if they comply with this new law. Employers should also consider updating paid sick leave policies to require documentation if an employee uses paid sick leave concurrent with bereavement leave.

What Should Employers Do?

  • Consider conducting a compensation audit in advance of the new requirements regarding publication of pay data under SB 1162 to ensure employees are being paid in line with California's Equal Pay Act, but consider consulting with your counsel to protect any audit from privilege;
  • Ensure your employee handbook policies, especially your leave of absence policies and paid sick leave policies, comply with these new California laws; and
  • Consult legal counsel before terminating employees for attendance reasons for absences that may qualify as excused absences under one of these new laws.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.