Every year starts with a number of new laws and regulations that will affect businesses in California. This year is no different. This is part II of a two-part series.
6. No more non-competes
Under two new laws, non-compete agreements with employees are expressly illegal starting in 2024 and if an employer requires one be signed, it could provide grounds for a lawsuit by the worker.
Here’s a rundown of the two laws:
AB 1076 — AB 1076 adds new requirements and penalties to existing cases that make it illegal for employers to include non-compete clauses in employment contracts or require an employee to sign a non-compete agreement that doesn’t meet exceptions under the law.
The law also requires employers to notify current employees who signed non-compete agreements that they are now void under California law by Feb. 14, 2024. This also applies to former employees who were hired after Dec. 31, 2021.
SB 699 — This legislation bars employers from enforcing a non-compete agreement that is void under California law. Most notably it would make void an agreement signed by an employee out of state who later relocates to California.
It also provides employees and job applicants a private right of action, including awards for injunctive relief, actual damages and attorney’s fees, and costs if an employer requires them to sign a non-compete. Additionally, it makes a violation of the statute an act of unfair competition — another possible legal risk.
7. New joint-employer rule
The National Labor Relations Board has issued a final rule that expands the definition of what’s considered a joint-employer relationship and increases employers’ potential liability.
Under the rule, two or more entities may be considered joint employers if they share one or more employees and they both can determine the workers’ essential terms and conditions of employment. If a company is deemed a joint employer with another entity, each can be held liable for labor law violations that the other commits.
The new NLRB rule applies to almost all industries, but will have the most effect on companies that use staffing or temp agencies, firms that are third party employers, and franchisors.
The rule takes effect Dec. 26, 2023 on a prospective basis, meaning it applies to any cases filed on or after that date.
8. Reproductive loss leave law
Starting Jan. 1, 2024, workers in the Golden State will be able to take up to five days off for a “reproductive loss,” defined as a miscarriage, stillbirth, failed adoption or failed surrogacy experienced by an employee, their spouse or partner.
Under the new law, SB 848, workers are not required to take all five days consecutively, but they must use them all within three months of the event. If an employee experiences two reproductive losses in a year, they will be eligible for 20 days off.
9. New telecommuter class code
If you have staff who work remotely, you’ll want to know that there is a new California workers’ compensation class code that is lower than what’s currently being charged.
After many people starting working remotely when the COVID-19 pandemic began in 2020, the Workers’ Compensation Insurance Rating Bureau created a new telecommuter class code (8871) and tethered its pure premium advisory rate to the 8810 clerical classification for easier administration.
Under Rating Bureau rules, code 8871 will receive its own rate which is 25% lower than the clerical rate. If you have remote workers, you’ll want to ensure they are in the telecommuter class code to enjoy the lower premium.
10. Wage changes
The state minimum wage is increasing on Jan. 1, 2024 to $16 from the current $15.50.
While that wage is for the state, a number of cities and municipalities have minimum wage rates that are higher.
Additionally, a new law, AB 1228, raises the minimum wage for fast food restaurant workers in the state to $20 an hour, starting April 1, 2024. This rate will increase annually through 2029 based on inflation.