New California Laws for 2023 and Beyond: What Employers Should Know

In 2022, California Gov. Gavin Newsom signed many laws impacting California employers. Some of the new laws became effective immediately and others, including some that were signed into law just weeks ago, take effect January 1, 2023, or later. These new laws address several topics, including supplemental paid sick leave, pay transparency, leaves of absence and fast-food restaurant employment standards.

As a reminder, the minimum wage in California is increasing to $15.50 per hour on January 1, 2023, for all employers — regardless of the number of workers employed by an employer. Also, many cities and local governments in California have enacted minimum wage ordinances exceeding the state minimum wage.

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California Governor Gavin Newsom Signs Pay Transparency Bill

On September 28, California Governor Gavin Newsom signed SB 1162 into law, effectively amending Section 12999 of the Government Code and Section 432.3 of the Labor Code, which expands pay data reporting obligations, requires certain-sized employers to provide the pay scale for an open position in job postings and imposes new record-keeping requirements. It will become effective on January 1, 2023.

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California Supreme Court: Unpaid Meal and Rest Period Premiums Can Lead to Wage Statement and Waiting Time Penalties

On May 23, 2022, the California Supreme Court ruled in Naranjo v. Spectrum Security Services, Inc. that unpaid meal and rest period premiums can form the basis of claims for wage statement violations under California Labor Code section 226 and waiting time penalties under California Labor Code section 203.  This is yet another significant decision by the Supreme Court impacting California employers in California particularly since the Court overruled the Court of Appeal, which had held that meal and rest period premiums are not “wages” and therefore cannot lead to wage statement or waiting time penalties.

Background

California law generally requires that employers provide non-exempt employees a reasonable opportunity to take an unpaid, off-duty and uninterrupted meal period of at least 30 minutes before the end of their fifth hour of work, and a second meal period before the end of their tenth hour of work.  Employers also generally must provide 10-minute uninterrupted, paid rest periods to non-exempt employees for every four hours worked (or major fraction thereof).  If an employer does not provide a compliant meal or rest period, the employee in question is entitled to payment of one hour of wages at the employee’s regular rate of pay.  That extra hour of pay is often referred to as a meal or rest period “premium.”

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State & Local Employment Law Developments: Q1 2022

The first quarter of 2022 continued the trend of increasing regulation of the workplace by state and local governments. Although it is not possible to discuss all state and local laws, this update provides an overview of recent and upcoming legislative developments to help you and your organization stay in compliance. (Please note that developments related to issues such as minimum wage rates and COVID-19 are not included.)

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9th Circuit Says Forum Selection and Choice of Law in Employment Agreement Violate California Law

On March 14, 2022, the 9th Circuit affirmed the U.S. District Court for the Central District of California’s decision in DePuy Synthes Sales, Inc. v. Howmedica Osteonics Corp. and Stryker Corp., that invalidated the New Jersey forum selection clause in the employment contract of Stryker’s former sales associate as a matter of California law and denied Stryker’s motion to transfer the litigation to New Jersey. Though forum selection clauses are generally enforceable under federal law, the 9th Circuit reasoned that deference must be given to state law in determining the validity of a forum selection clause before considering whether the clause is enforceable under 28 U.S.C. § 1404(a).

The case involved a former Stryker medical device sales associate, Jonathan Waber, who was employed by Stryker in California and who signed an employment contract with Stryker without legal representation. The agreement included non-competition and non-solicitation provisions, and also included forum-selection and choice-of-law clauses requiring adjudication of contract disputes in New Jersey. After less than one year of employment with Stryker, Waber left Stryker to work for one of its competitors, DePuy. After receiving a cease-and-desist letter from Stryker, DePuy and Waber preemptively filed a declaratory judgment action in the U.S. District Court for the Central District of California against Stryker and its subsidiary, Howmedica.

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Summary of New California COVID-19 Supplemental Paid Sick Leave – What Employers Need to Know

On February 9, 2022, California Gov. Gavin Newsom signed Senate Bill 114, which provides COVID-19 supplemental paid sick leave (SPSL) for covered employees who are unable to work or telework due to COVID-19 related reasons from January 1, 2022 through September 30, 2022. SB 114 is nearly identical to Assembly Bill 84 (AB) which was passed by the California Legislature on February 7, 2022. SB 114 takes effect on February 19, 2022, (10 days after the bill is signed by Gov. Newsom) and adds Sections 248.6 and 248.7 to the California Labor Code.

Among other things, SB 114:

  • Applies to employers with more than 25 employees.
  • Establishes a new bank of COVID-19 related SPSL.
  • Broadens the reasons employees can take COVID-19 SPSL
  • Permits employers to request proof of a positive COVID-19 test as to the employee or the employee’s family member.
  • Requires retroactive payment if an employee would have been eligible for SPSL since January 1, 2022.
  • Will remain in effect until September 30, 2022.

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