New and Upcoming Labor Laws in California Every Employer Should Know

Shawn Dwyer | Jun 16, 2020 | minute read

2019 has been a year of massive changes when it comes to California labor laws. We’ve seen changes ranging from an increase in the minimum wage to changes to the definition of the term “hostile work environment.”

If you’re struggling to keep up with all these changes, you’re not alone. To help, here’s a roundup of some of the more notable changes that occurred this year as well, as pending laws you need to keep an eye out for in 2020.

Minimum Wage Increase

Perhaps the most notorious change in 2019 was the increase in the minimum wage. This is set to go up every year until 2023, at which point it’s likely that a new law will be passed.

Right now, the minimum wage requirements are as follows:

minimum-wage-chart

Non-discretionary bonuses you pay to employees can count towards meeting the minimum wage threshold. Be certain you stay up with the changes to minimum wage so you can’t be sued for back pay owed. Also, keep in mind that individual counties may have passed laws that require higher wages than those mandated by the state.

New Restrictions on Confidentiality of Sexual Harassment/Discrimination Settlements Are in Place

The #MeToo movement may not have been in the news as much as it was in 2017 and 2018. However, California laws have been changed as a result of it. Senate Bill 820 went into effect at the first of the year, adding a new section to the Code of Civil Procedure. It limits the reach of non-disclosure agreements on sexual harassment and discrimination settlements, making it easier for those who filed suit to discuss what happened to them.

The Bar For Hostile Work Environment Is Lowered

For nearly twenty years, for something to constitute a hostile work environment, there needed to be multiple instances of harassing conduct. Now, a single incident is considered to be a triable issue so long as it interferes with the work performance of the plaintiff or otherwise contributed to an intimidating or offensive atmosphere. It also adds personal liability if the harasser retaliates against the harassed.

Corporate Boards Must Include Women

By January 1, 2020, all publicly held companies operating in California must have at least one female sitting on their board of directors. On January 1, 2022, that changes to a minimum of two female directors if the company has five directors total or three female directors if the board has six or more. This will not apply to you if your business is not publicly held.

Expansion Of Paid Family Leave Now Applies To Military Service

Senate Bill 1123 expands coverage to those who need time off for active-duty military service, either their own or that of a close family member. This law will go into effect on January 1, 2021. However, you should gear up for this throughout 2020, especially if you know that an employee will need to take leave in the following year.

Employee Classification Is About To Change

California Assembly Bill-5 was signed into law in September of 2019. It makes the requirements for the classification of employees stricter than they previously were, making it harder to classify someone as an independent contractor. While it is set to go into effect on January 1, 2020, many companies within the gig economy are pushing a 2020 ballot initiative to reverse it. If you have any independent contractors you work with, speak to a lawyer to ensure you’re in compliance with the law.

Other Potential Laws To Watch For

Below is a list of pending legislation that may have an impact on you as a California business owners:

  • AB1832 : Workers’ compensation: medical-legal expenses
  • SB792: Employment Training Panel
  • AB1481: Tenancy termination: just cause
  • SB386: California Renewables Portfolio Standard Program: irrigation districts
  • AB854: Imperial Irrigation District: retail electric service
  • SB252: Income taxation: exclusion: mobile home park sales
  • AB1726 : Income taxes: California work opportunity tax credit
  • SB11: Health care coverage: mental health parity
  • SB658: Cannabis: licensing: cannabis retail business emblem: track and trace
  • AB1224 : Disability insurance: paid family leave program
  • SB561: California Consumer Privacy Act of 2018: consumer remedies
  • SB263: Taxation: credit: savings plans: qualified ABLE program: small business cash method of accounting

As a business owner, you need to protect yourself by staying on top of employment laws and having the right insurance to cover you should something go wrong.

Leap | Carpenter | Kemps Insurance Agency Is Here for You

We know that the legal landscape for employers is constantly changing. That’s why at Leap | Carpenter | Kemps Insurance Agency our dedicated agents are constantly reviewing new and upcoming changes in laws that will impact your business. Have questions about whether you and your employees have the right insurance coverage to protect yourself against the new labor law landscape? Contact a knowledgeable agent today.

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About The Author

Shawn Dwyer specializes and has a deep understanding of captive insurance, workers' compensation insurance, general business insurance, and safety and risk management.

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