Paid Sick Leave, Non-Compete Agreements, and Workplace Violence

Building upon our previous employment newsletter which you can find on our website here, we delve into a few more new laws, exploring their implications and the changes they bring. This update summarizes a few more employment laws that will take effect in 2024, as well as some bills that didn’t quite make it to law.

New Paid Sick Leave

SB 616 brings about crucial changes to paid sick leave in California. Here are some key takeaways:

1. Employers may continue providing one hour of paid sick leave for every 30 hours worked. But if they use a different accrual method, SB 616 requires that they provide at least 40 hours of paid sick leave by the 200th calendar day of employment. The previous requirement that employers provide at least 24 hours of paid sick leave by the 120th calendar day of employment still applies.

2. The new law increases the accrual cap for paid sick leave. Employers were previously permitted to cap an employee’s accrued sick leave at 48 hours; SB 616 raises that cap to 80 hours.

3. Employers may limit the use of accrued paid sick days to 40 hours or five days (it was previously 24 hours or three days).

4. Employers may still frontload sick leave (i.e., provide all sick leave at the beginning of each year), but if they do, they need to frontload 5 days/40 hours of paid sick leave each year. If employers frontload sick leave, no further accrual is required, and the frontloaded sick leave does not carry over to the following year.

Changes to the Non-Compete Law

SB 699 and AB 1076 made some significant changes to California’s law against non-compete agreements. Under existing California law, any contract restraining a person from engaging in a lawful profession, trade, or business is void. AB 1076 codifies existing case law by specifying that this rule is to be broadly construed, and that any non-compete clause in an employment contract is void unless it meets limited exceptions. AB 1076 also states that the non-compete statute even applies to contracts where the person being restrained is not a party to the contract. For instance, this provision could void contracts between businesses that limit their employees’ ability to engage in their chosen profession, trade, or business.

Additionally, AB 1076 makes it unlawful to include a non-compete clause in an employment contract, or to require an employee to enter a non-compete agreement, that does not satisfy specified exceptions. So, whereas they used to merely be void, now such clauses are illegal, meaning employers could face liability for including such clauses in an employment contract. Finally, it requires employers to notify current and former employees (hired after January 1, 2022) whose contracts contain non-compete clauses or who were made to agree to non-compete terms that do not meet the exceptions. This notification must be completed by February 14, 2024. The notice must be an “individualized communication” to the employee and delivered in writing to the employee’s last known mailing address and email address. Violating any of these rules can expose employers to civil liability.

SB 699, like AB 1076, further strengthens the law against non-compete agreements. It states that any contract that is void under the non-compete law is unenforceable, regardless of where and when the contract was signed. So, employers cannot attempt to enforce a contract from another jurisdiction that is void under California law, regardless of where it was signed, or where the employee worked. If an employer enters into a contract that is void under the non-compete law, that is a civil violation, and employees can now sue for injunctive relief and/or damages for such violations, including an award of reasonable attorney’s fees and costs if the employee prevails.

Workplace Violence

SB 553 enhances existing law regarding workplace-violence protection. As of July 1, 2024, most employers must establish, execute, and maintain an extensive plan dedicated to preventing workplace violence across all areas of operation. This plan must be documented, easily accessible to all employees, and in effect at all times in all work areas. It must be tailored to address specific hazards and remedies pertinent to each work area and operation. Employers can integrate this written plan within their existing injury and illness prevention policy or maintain it as a separate document.

The plan must include specific information and guidelines regarding violence prevention, including “effective procedures” to obtain employee involvement in plan development, coordinating with other employers, reporting and responding to violence incidents, training procedures, hazard identification and correction, post-incident investigations, reviewing plan effectiveness, and additional provisions mandated by the Division of Occupational Safety and Health and Occupational Safety and Health Standards board (which will be proposed by December 31, 2025 and adopted by December 31, 2026).

The bill also requires that employers record information in a “violent incident log” for “every workplace violence incident.” The new law also requires regular and effective training on the workplace-violence-prevention plan for employees. Additional training is necessary when new or previously unrecognized violence hazards are identified or when alterations are made to the plan.

Employers must maintain records related to identifying, evaluating, and rectifying violence hazards, violent-incident logs, and investigations, for at least five years. Employers must also create and maintain training records for at least one year. Employers must make these records available to the Division of Occupational Safety and Health upon request. Employers must also make records relating to identifying, evaluating, and rectifying violence hazards, violent-incident logs, or training records available to employees and employee representatives upon request for examination and copying within 15 calendar days.

Finally, it’s important to note that certain employers are exempt from these requirements. These include: (1) employers who comply with Cal/OSHA’s Violence Prevention in Health Care requirements; (2) the Department of Corrections and Rehabilitation; (3) certain law enforcement agencies; (4) employees teleworking from a location of their choice not under the employer’s control; and (5) workplaces inaccessible to the public with less than 10 employees present at any given time.

A Few Vetoed Bills

In addition to the bills that passed, we wanted to quickly spotlight a few bills that the Governor vetoed. Among these was SB 403. This bill would have banned discrimination based on an individual’s “caste” under the FEHA, Unruh Civil Rights Act, and California Education Code. “Caste” was defined as an individual’s perceived position in a system of social stratification on the basis of inherited status. In an October 7, 2023, memo, Governor Newsom stated that he believed discrimination based on caste was already prohibited under California’s existing protected categories. So, he believed SB 403 was unnecessary.

Another vetoed bill was AB 524. It would have made it an unlawful employment practice for an employer to refuse to hire or employ a person because of the person’s family-caregiver status. “Family caregiver status” was defined as a person who contributes to the care of one or more family members. In an October 8, 2023, memo, Governor Newsom stated that he believed the bill would put a large burden on employers, particularly small businesses, given the ambiguous nature of the language. He stated that the bill would be difficult to implement and lead to costly litigation for California employers.

A Few Bills Stuck in Committee

Despite making some headway, a few bills have yet to reach the Governor’s desk. One is SB 855. The bill would make it unlawful to require an employee who is a veteran to work on November 11—Veterans Day—if the employee provides at least 21 days’ notice that he or she intends to take November 11 as a holiday, the employee provides proof of veteran status, and the employee’s absence would not negatively impact public health or safety or significantly disrupt the employer’s operations. Another bill is AB 1100. This bill proposes a 32-hour Workweek Pilot Program administered by the Department of Industrial Relations, offering grants to employers with over 5 employees. These grants would support pilot programs enabling employees to choose a 32-hour workweek. As these bills, among others, remain within the Legislature, they could find renewed momentum in a later session, and we’ll be sure to provide updates as developments unfold.

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