Prepare Now! Five New California Employment Laws for 2023
As an employer, it’s crucial that you stay up-to-speed on changing employment laws. Educating yourself and your HR staff in advance of the laws taking effect will give you time to prepare and communicate with your employees, putting you in the best position to comply.
It’s best practice to roll out an updated employee handbook to your staff at the beginning of each year. It’s the perfect time of year to take stock of current laws, any changes to expect, and whether they apply to a company of your size, as you want these changes to be reflected in your updated employee handbook.
At C3, we believe mindset is key when processing how to handle any change. You can either look at new laws and policies as obstacles, or you can approach them from the mindset of how you can use them to your advantage. As we outline each law and how to prepare, we will also provide perspective on how to utilize it for your benefit instead of viewing it as a roadblock.
There are five new laws California employers should begin preparing for now, as all but one of them takes effect January 1, 2023. Let’s begin with the exception, which is technically already in effect.
AB 152 extends the COVID-19 supplemental paid sick leave (SPSL), which was supposed to sunset on September 30, 2022 through the rest of this year. While the extension is currently only until December 31, 2022, there is a high likelihood it will be extended again, into 2023.
The bill does not create additional leave, and there is no new entitlement to leave, but employees who test positive for COVID-19, who are taking care of a family member who tests positive, or who have an isolation order from a doctor and who cannot work remotely will be eligible for SPSL.
AB 152 also includes aid to help small businesses (26-49 employees) subsidize this leave. With the proper documentation (record everything!), businesses of this size can recover up to $50,000 in SPSL paid out during the course of a year. Because this has been in effect since 2020, most businesses already have a good reporting practice in place, but if you don’t, make sure you add a SPSL-specific code (different from your PTO or sick time code) to your payroll system so you can easily track and record which hours might qualify for reimbursement.
Communicating that this benefit is available to your employees with not only keep you compliant, but it can also serve as an opportunity to showcase your company’s culture of care. Make sure they know that when they or their families get sick, you are there to help them, work with them and support them. Provide an HR contact who can assist them with options.
Moving on to the laws set to take effect on January 1, 2023, SB 1162 is focused on pay transparency and pay data reporting. This law puts the onus on employers to be transparent about the pay range for a specific job. Companies with 15 or more employees must include the pay range with an open job advertisement. In addition, employees will be able to request and receive a pay scale for their current position, including the salary or hourly ranges the employer would expect to pay for that position.
Under existing California law, employers with 100 or more employees who are required to submit pay data reports to the federal Equal Employment Opportunity Commission are also required to submit reports to the California Civil Rights Department (formerly the California Department of Fair Employment and Housing). Previously, the state reporting requirement could be satisfied by submitting a federal report to the California Civil Rights Department. Now, under SB 1162, employers must submit a separate report to the state.
SB 1162 also expands the data that must be reported to include mean and median hourly rates for each combination of race, ethnicity and sex within each job category. And finally, the law also mandates that employers keep job titles and wage rate histories for every employee during their employment and for three years after their employment ends.
While it’s easy to look at these new requirements from a pessimistic standpoint, it’s important to remember that making the wrong hire is costly. Utilizing the requirement to include a pay range in a job posting to weed out potential non-fits will save you time and money in the long run. Vetting out salary requirements and ranges with candidates on the front end will result in less wasted time and will make your hiring process more efficient.
AB 1949 is another opportunity to showcase your culture of care. This law makes it mandatory to provide up to five days of unpaid time off for bereavement leave in the event of the death of a spouse, child, parent or qualifying family member.
While five days of unpaid bereavement leave is the state’s minimum requirement, many companies have their own policies, which may include paid time off. The law doesn’t mean you have to give the bare minimum. Whatever your policy, make sure you are communicating it to your employees. Let them know you are coming to this topic from a place of compassion. The last thing you want them to worry about in a time of grief is their PTO balance, their income, or their workload.
C3 also recommends erring on the side of flexibility when it comes to qualifying family members because every family is different. At the same time, you have to understand that what you allow for one employee will set future precedent. While the law says a company can require documentation including a death certificate, an obituary or a memorial pamphlet, your company policy does not have to match that, if it’s not the right fit for your culture.
Again, this is an opportunity to treat your employees like family, showcase your culture of compassion and care, and highlight why you are an employer of choice.
AB 1041 expands Family Leave and Paid Sick Leave. In addition to the family members outlined in California’s paid sick leave law and the California Family Rights Act (CFRA), an employee can also take leave to care for a designated person outside the scope of that definition. The designated person must be identified at the time the employee takes leave, and the employer has the right to limit the number of designated persons to one per 12-month period, per employee.
Although the law specifies that the designated person should be “like family” to the employee, it will be tough to challenge what that means. Like AB 1949, AB 1041 presents an opportunity to be flexible about who a qualifying family member is. Approach this from a human standpoint, but be mindful of precedent. Be fair, but consistent; don’t say yes to one employee and no to another with a similar request. And with these expansions, keep an eye out for continued changes to the definition of who qualifies.
Finally, SB 1044 forbids employers from retaliating against employees who leave work or refuse to show up due to an emergency condition, such as a natural disaster, a criminal act, or an order to evacuate. In addition, employers can’t retaliate against those who leave work or refuse to show up because they feel unsafe due to this emergency condition.
A situation in which an employee feels unsafe coming to work is an opportunity to communicate with them, show you want to understand their challenges and discomfort, and work together on potential solutions. This may include offering the services of an EAP if you have one, counseling, or other solutions. Work with them rather than taking a firm stance against them.
Whenever we see new employment legislation, C3’s approach is always first to interpret and devise a plan to implement it, but from there, we want to communicate changes to our employees, keeping them informed of their rights and eligibility. Our bottom line is wanting to take care of our employees, and that’s what these pieces of legislation also come down to. That’s why we don’t view them as barriers or road blocks. They are opportunities. We can align with the legislation to be the best, most supportive employer.
At C3, we encourage you to make this mindset shift, as well. View these pieces of legislation as opportunities to show your employees what your culture is all about. Put in the time now to understand what they mean, and work through a plan for how you are going to communicate these changes with your employees. Come January 1, 2023, you will find yourself in a great position.