California is known for its “pro-employee” labor laws, so it’s not surprising to see how the California HR Laws continue to evolve. Many of the latest laws went into effect on January 1, 2022. It’s time you should know what they are and how they will affect your practice.
How to Prepare for the New California Labor Laws
There’s no doubt that the COVID-19 pandemic has affected the evolution of California HR Laws in significant ways, but you will still face new compliance regulations. Our goal at HR for Health is to offer a brief overview of new employment and labor laws, so that you can be prepared with strategic approaches for future compliance.
The New California Labor Laws You Need to Know About
We’ve been tracking the new California HR Laws, so we can offer insights into what you can expect and how it will affect your practice. Here’s a quick rundown on each of the 10 new laws. Which ones will affect your practice the most?
Law 1 – Wage Theft Is “Grand Theft”
The new California HR Laws include AB 1003, which makes “wage theft” a grand theft, which could be a misdemeanor — or a felony, depending on prosecution. The penalty for misdemeanor could include potential time in the county jail of up to one year. If you are charged with a felony, the penalty could be 16 months to three years.
When your employees work unauthorized overtime, you may be tempted to refuse to pay for that overtime However, your refusal to pay for that overtime could be seen as wage theft. Here are a few resources that will help you better understand wage theft, so you can avoid legal issues:
Law 2 – Employment Discrimination Litigation Settlement Agreements
In 2019, California HR Laws restricted your use of non-disclosure (NDA) provisions for settlements. More recently, SB 331 expands those restrictions. It now prevents you from using an NDA in cases that involve employment discrimination. So, it would invalidate any such provision in a settlement agreement after January 1, 2022.
Law 3 – Employment Severance Agreements
SB 331 limits your use of an NDA as part of a severance agreement where there are unlawful acts in the workplace. That could include acts of discrimination, harassment, or other activities your employees might consider unlawful. In offering a severance package, you must notify your employee to consult with an attorney and give them five days for a consult.
Law 4 – Leaves of Absence
The California Family Rights Act (CFRA) ensures that your eligible employees may take 12 weeks of annual leave to care for family members (including parents). AB 1033 now includes “parents-in-law.” SB 1383 (2020) amends the “employer” exception rule to make the entirety of CFRA applicable to your practice if you have five or more employees. AB 1033 offers details related to the small employer mediation program.
You should have a process in place for engaging in the interactive process with employees who may qualify for this leave. You must accurately track your employee’s leave. . A software like HRFH’s makes this manageable for clients.
Law 5 – Record Retention
SB 807 lengthens your record retention requirement to four years or until the applicable statute of limitations has expired.
Additional Resources
- COVID Vaccine Declination Form
- COVID Policy Templates
- COVID Employer Toolkit
- Re-Opening Your Practice After COVID
- 7 Termination Mistakes Infographic
Records Retention can quickly generate a lot of paperwork for your practices. Consider going electronic with your records to avoid getting overwhelmed with hard copies of all personnel files. At HR for Health, our software securely stores everything in the cloud. You can also store groups of documents separately (e.g. medical docs).
Law 6 – Retirement Requirements
If you have five or more eligible employees, your deadline to register for the CalSavers retirement savings program is June 30, 2022.
While you aren’t required to enroll in CalSavers, the law requires you to either provide your own retirement plan/option or sign up with CalSavers by the deadline.
Law 7 – Workplace Safety
SB 606 expands Cal/OSHA authority, including provisions for egregious and enterprise-wide violations. Penalties may be assessed on a “per employee” basis for egregious violations, where there is a history of ignoring health and safety responsibilities. Penalties can also be assessed on an enterprise-wide basis if there is a pattern that involves more than one location.
Be sure to have a system in place for storing all your OSHA docs and anything related to your safety processes and procedures. At HR for Health, our software allows you to securely store these docs in an electronic format. You can easily share your digital documents directly with your employees,, with a prompt designed to ensure that your team acknowledges/signs the document.
Law 8 – Notification of COVID-19 Exposure
California HR Laws have been expanded with AB 654 to require you to notify your employees if they have been in close contact with a team member with COVID-19. The law took effect on October 5, 2021. It is scheduled to sunset on January 1, 2023.
Recommend Resource
COVID-19 Policies, Vaccine Declination Forms, and Testing Tracking Template
Law 9 – Independent Contractors
California HR Laws, related to Independent Contractors, build upon AB 5, which put the burden of proof on you. The law provides some exceptions for newspaper distributors and carriers, which were extended via AB 2257 until January 1, 2025. AB 1506 further extends the current exceptions until December 31, 2024, with AB 1561 further amending the “data aggregators” (market research) exception.
In most cases, you probably won’t need to worry about an independent contractor classification. If there are scenarios when you’re considering applying this classification to an employee, you should consult with HR legal counsel to make sure you’re following all legal and compliance requirements.
Law 10 – Different Pay Rates
SB 639 revises the use of sub-minimum wages to phase them out. Under the Fair Labor Standards Act, passed in 1934, licenses would be issued to persons with disabilities, allowing them to work for less than the minimum wage. With the new law, existing licenses will not be renewed after 2025, and new licenses will not be issued starting January 1, 2022.
Why You Need to Know About California HR Laws
Not all these California HR Laws will affect you and your practice, but you should still be aware of their potential effects as your practice grows and the dynamics of your team evolve. The other thing to remember is that not all these laws will pass legal muster. Some of them have already been challenged, and others may be litigated in the coming year. It’s more important than ever that you know what the California HR Laws are now, and how they will change.
How HR for Health Can Help
HR for Health is ready to help you prepare for the changes and navigate your way through the policy and procedures process to ensure you’re compliant. HR for Health works with you to help you and your employees use convenient online documents and on-demand HR advising and support services.
We provide our clients with a customized employee handbook, updated to reflect the current changes in the California HR Laws. So, you can be confident that it contains the latest policies and regulatory updates. Schedule a consultation today to see how HR for Health can help your practice.
HR for Health provides the mechanism for staying compliant with our software. We can work with you to help keep your handbook up-to-date with these upcoming legal developments.
