California Employment Beat

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California voters have rejected a ballot measure that would have increased the state’s minimum wage to $18 on January 1, 2025. Defeated by a narrow margin of 50.82 percent to 49.18 percent, Proposition 32 would have made California the first state in the Union to have an $18 minimum wage. The California Chamber of Commerce and California Restaurant Association praised the outcome as a win for businesses and consumers who have seen costs rise in recent years.Continue Reading California voters vote no on $18 minimum wage

Now that Governor Gavin Newsom’s September 30th deadline to approve or veto legislative bills has passed, California employers can begin preparing for the new laws that will affect their workplaces next year. The recent legislative session has yielded strengthened protections for workers in a diverse array of subject areas, including but not limited to union organization, freelance work, anti-discrimination, paid family leave, and artificial intelligence. The new laws go into effect January 1, 2025. To help employers stay ahead of the curve, we have highlighted the most significant employment laws signed into law below. We encourage employers to consult with legal counsel to ensure compliance.Continue Reading California employment law legislative update: What employers need to know for 2025

On September 27, 2024, California Governor Gavin Newsom signed Senate Bill (SB) 1137 into law, clarifying that discrimination can happen based on an intersection or combination of protected characteristics. Specifically, SB 1137 amended the Unruh Civil Rights Act, the Education Code, and the Fair Employment and Housing Act (FEHA) to extend protection against discrimination by including the concept of “intersectionality”.

Back in February 2024, California State Senator Lola Smallwood-Cuevas introduced SB 1137, which aimed to make California the first state to explicitly recognize “intersectionality” in anti-discrimination laws. Smallwood-Cuevas notes in her April 15, 2024, press release that “[d]iscrimination transcends singular dimensions”, and that SB 1137 “is common-sense reform that addresses the intersectionality of discrimination cases, providing greater protections for Californians, especially those from our most marginalized communities of color.”Continue Reading California adopts intersectionality into anti-discrimination laws

On July 25, 2024, the California Supreme Court ruled in the case of Castellanos v. State of California that Proposition 22, also known as App-Based Drivers as Contractors and Labor Policies Initiative, is constitutional. The statewide ballot measure from 2020 exempts certain app-based drivers from California’s independent contractor classification law. This decision will significantly impact ongoing gig economy litigation as well as potential future litigation.

In 2021, drivers for services including Uber Technologies Inc., Lyft Inc. and DoorDash Inc., joined with the Service Employees International Union and its California chapter to challenge Proposition 22. The drivers and union claimed that the voter-approved ballot measure passed in November 2020 must be struck down because it infringed on the California legislature’s power to set workers’ compensation laws. During the May 2024 oral arguments in San Francisco, the justices appeared skeptical of the drivers’ position, expressing concerns about the chilling effect on future ballot initiatives and questioning why the legislature simply could not create new workers’ compensation laws in response. The court concluded that Article XIV, section 4 of the California Constitution does not limit the ability of California voters to enact laws through the initiative process that touch on workers’ compensation, rendering Prop 22 constitutional.Continue Reading California Supreme Court upholds Prop 22: California gig drivers to remain contractors

On Tuesday, Governor Gavin Newsom signed Assembly Bill 2288 and its counterpart Senate Bill 92 into law, which amend California’s Private Attorneys General Act (PAGA). While the amendments are expansive in nature, eight major changes under this new version of PAGA are detailed below:Continue Reading California enacts eight noteworthy changes to controversial Private Attorneys General Act

On May 6, 2024, the California Supreme Court issued a significant ruling in Naranjo v. Spectrum Security Services, Inc. (Case No. S279397). The decision provides much-needed clarity on California’s wage statement requirements and also held that employers can assert a good faith defense to wage statement claims under appropriate circumstances.

Labor Code section 226 states that California employers must provide employees with accurate itemized wage statements. Employees can seek statutory penalties if an employer fails to provide accurate itemized wage statements and such failure is “knowing and intentional”. (Lab. Code, section 226, subd. (e)(1).). While the statutory penalties are capped at $4,000 per employee (in addition to the employees’ associated attorneys’ fees and costs), the aggregated wage statement penalties can add up quickly in the class action context.Continue Reading Key victory for California employers: California Supreme Court accepts good faith defense to wage statement violations

For the past 20 years, the Private Attorneys General Act (PAGA) has been a thorn to employer’s side in California. In 2004, PAGA, a California state law, was enacted to create a private right of action for workers to file representative actions on behalf of themselves and other workers based on specific labor code violations. The purpose behind enacting such legislation was to give authority to “aggrieved employees” to enforce the law, thereby alleviating the strain on California’s Labor and Workforce Development Agency (LWDA). This private right of action empowered workers with the authority to enforce California’s numerous labor laws that the LWDA purportedly did not have resources to pursue. Successful PAGA litigants recover 25 percent of monetary penalties for state labor law violations, while the remaining 75 percent of penalties go to the LWDA. The statute also allows plaintiffs’ lawyers to recover attorneys’ fees if they prevail on a PAGA lawsuit.   Continue Reading Is this the end of PAGA?

California’s new law that creates a separate minimum wage applicable only to fast food restaurant employees took effect on April 1, 2024. Under Labor Code Section 1475 (LC 1475), this minimum wage is $20 per hour. It represents a significant increase from the current statewide minimum wage of $16 that went into effect at the beginning of the year. Many local jurisdictions within the state already have a minimum wage above $16 per hour, but none as high as $20 per hour. Continue Reading California’s new minimum wage for fast food restaurants took effect this month

Widely known as “Ban the Box” laws, California is among the many jurisdictions that have adopted laws limiting the use of criminal background checks in evaluating job candidates. Enacted in 2018, California’s Fair Chance Act generally prohibits employers, with five or more employees, from asking a job candidate about their conviction history before making a conditional job offer. Among other requirements, the Fair Chance Act also places an affirmative duty on employers to provide requisite notices to candidates and to evaluate several factors before withdrawing a job offer due to a candidate’s criminal history. Employers must also provide candidates with the opportunity to explain or provide mitigating information before making a final decision to rescind a job offer. In October 2023, California amended the Fair Chance Act to bolster these notice and evaluation requirements. The 2023 amendment also increased potential employer liability for failure to properly notify and evaluate a job candidate’s criminal history. Proposed legislation in California aims to place stringent requirements on when employers can request a criminal background check in the first instance and how the information obtained must be evaluated. Continue Reading Proposed California legislation may effectively ban criminal background checks

Governor Gavin Newsom signed S.B. 525 into law adding new minimum wage requirements to Sections 1182.14 and 1182.15 of the California Labor Code. These new sections establish five comprehensive minimum wage schedules for “covered health care employees”, which includes contracted and subcontracted employees. Effective June 1, 2024, “covered health care facilities” will be required to implement the applicable minimum wage schedule, depending on the nature of the employer, as set forth by the law. In general, the law preempts any local ordinances setting wages for healthcare workers. To determine the law’s applicability, health care providers across California must consider (1) whether they meet the definition of a “covered health care facility” and, if so, (2) who within their workforce meets the definition of a “covered health care employee”.Continue Reading California enacts increase in the minimum wage for covered health care employees