Healthcare Minimum Wage, More Employee Protections, and Reproductive-Loss Leave

We hope this newsletter finds you in good health and high spirits. In this newsletter, we bring you the latest news from Sacramento. This is the season when bills have been signed into law, most going into effect January 1, 2024. The Legislature has been abuzz with activity, and the Governor has recently put pen to paper, signing into law a series of transformative bills. This update summarizes some of the newly enacted employment laws. We will provide further updates on the other employment and healthcare laws from this session in the coming weeks.

Healthcare Worker Minimum Wage

SB 525 increases the minimum wage for healthcare workers to $25 per hour, with incremental increases along the way. The increases are set to occur over the next two to nine years. The timing depends on the type of healthcare entity:

· Physician groups part of large health systems (10,000+ employees) and dialysis clinics must hourly pay $23 by next year and increase to $25 for all employees by 2026;

· 25+ physician groups and community clinics must pay $21 next year and increase to $25 by 2028;

· Hospitals with high percentages of Medi-Cal and Medicare patients (90% or greater) and rural hospitals start at $18 next year, increasing to $25 by 2033; and

· All other healthcare employers would increase their minimum wage to $21 per hour in 2024 and $25 by 2028.

The larger employers face faster annual increases to hit the new $25 hourly minimum. The larger group is defined to include those in facilities that are part of an integrated healthcare delivery system, healthcare systems with 10,000 or more full-time equivalent employees, or a health facility owned, affiliated, or operated by a county with a population of more than 5,000,000 as of January 1, 2023 (aka Los Angeles, though it does not have to comply until 2025). So, depending on what size and type of healthcare employer you are, you will need to bump up those wages over the next few years. The new law was intended to end more local efforts to raise hourly rates for healthcare employees on a city-by-city basis. We’d previously written about such efforts here, and noted the Los Angeles and Downey ordinances were on hold until after the November 2024 referendum—which will now not happen.

Enforcing Labor Laws

AB 594 increases the available resources for California to enforce its labor laws. It now allows prosecutors, until January 1, 2029, to independently prosecute civil or criminal actions for violations of specified provisions in the Labor Code, including minimum wage, meal/rest break, and whistleblower protections. It also grants the Labor Commissioner and prosecutors the authority to enforce prohibitions against willful misclassification of workers as independent contractors instead of employees. Both can now investigate, order relief, issue citations, and file civil actions. And those officials are not bound by the contracts between the affected worker and employer—including those contract clauses limiting representative actions or mandating private arbitration. The new law limits prosecutors to prosecuting Labor Code violations that occur within their jurisdiction.

Harassment

SB 428 allows employers to seek temporary restraining orders and injunctions on behalf of employees who have experienced harassment in the workplace, provided there is clear and convincing evidence of harassment and potential harm to the employee. So, for example, if one of your employees is experiencing harassment at your workplace that is causing the employee substantial emotional distress, the law permits the employer to seek a restraining order against the harasser on behalf of the employee. Employers no longer need to wait until there is a credible threat of violence before seeking relief from the courts. The law also gives the employee the option to decline to be named in the order. The law will take effect on January 1, 2025.

Whistleblower Retaliation

SB 497 adds significant employee advantages in retaliation cases. First, it introduces a rebuttable presumption in favor of an employee’s claim if an employer takes any adverse action within 90 days of the employee’s engaging in protected conduct. This means that if an adverse action occurs within 90 days of the protected conduct, the law will presume the adverse action was done in retaliation for that conduct unless the employer affirmatively rebuts that presumption. Next, it states that employers who unlawfully retaliate against whistleblowers can face a civil penalty of up to $10,000 per employee, with the penalty awarded to the affected employee.

Cannabis-Related Protections

SB 700 continues California’s trend of implementing cannabis-related protections for employees. Last year, California passed AB 2188 to curtail workplace discrimination linked to off-duty cannabis use. That law, starting January 1, 2024, states employers generally cannot discriminate against a person because of their off-duty cannabis use. Now, SB 700 makes it unlawful for an employer to request information from applicants relating to their prior use of cannabis. It also prohibits employers from using information obtained from a criminal-history report about an applicant or employee’s prior cannabis use, unless the employer is permitted to consider that information under the California Fair Employment and Housing Act, or other state or federal law.

Reproductive-Loss Leave

SB 848 introduces a new type of leave: reproductive-loss leave. Employers must now grant up to five days of leave for eligible employees after experiencing a reproductive-loss event. A “Reproductive loss event” means “the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.” Generally, the leave must be taken within three months of the event. If an employee experiences more than one such event within 12 months, the total reproductive-loss leave is capped at 20 days. If an employer has no existing policy as to reproductive loss (which is likely the case for most employers), the leave may be unpaid. But employees can use other available paid leave balances, including sick leave, that are otherwise available to the employee. Like most leave laws, employers cannot retaliate against those who use this new form of leave. Employers are also required to maintain employee confidentiality regarding use of the leave.

If you need a more thorough analysis of these new laws, please reach out to one of us and we will do a deep dive for you.  Also, if you know of others that would like our updates, they may subscribe here. If you do not want to receive these client updates, simply click the “Unsubscribe” link at the bottom of this newsletter. 

Best,

Keith W. Carlson and Nima A. Jalali