The California Civil Rights Department (CRD) has recently approved regulations under the Fair Employment and Housing Act (FEHA) to address discrimination in employment resulting from the use of automated decision-making systems, including artificial intelligence (AI) and algorithms. These regulations apply to all employers covered by the FEHA and will likely take effect in July, once they complete the final administrative process of approval by the Office of Administrative Law.

Definition of Automated Decision Systems

An automated decision system (ADS) is defined as a computational process that makes or assists in making decisions regarding employment benefits such as hiring, promotion, selection for training programs, or similar activities. An ADS can result from AI, machine learning, algorithms, statistics, or other data processing techniques. The definition of ADS does not include word processing software, spreadsheet software, or other commonly used software for day-to-day work.

Regulations Against Discrimination

Under these regulations, it is unlawful for an employer to use ADS or selection criteria that discriminate against applicants or employees based on protected categories defined under FEHA. Evidence of anti-bias testing of ADS or similar practices may support defenses against discrimination claims. Anti-bias testing involves evaluating automated decision-making systems to identify and mitigate biases that may lead to unfair or discriminatory outcomes, ensuring the system operates equitably across different demographic groups. However, methods of conducting anti-bias testing may vary depending on the ADS used.

Recordkeeping

The regulations require preserving ADS data and related records for four years from either the date of the data’s creation or the personnel action involved, whichever occurs later, similar to other types of personnel records and selection criteria. Other revisions include adding ADS to regulations in the definition of “application” or included in “recruitment activity.” Additionally, the regulations specify that using ADS for certain skill testing may necessitate providing reasonable accommodations for religious beliefs or disabilities, ensuring non-discriminatory practices.

Compliance for Employers

For employers in California, the regulations clarify that when using ADS for any aspect of employment, caution should be applied to avoid discrimination. If you have questions about compliance with the new regulations or related issues, contact a Jackson Lewis attorney to discuss.

Employers subject to San Francisco’s Fair Chance Ordinance or the Health Care Security Ordinance are required to submit the Employer Annual Report Form to the San Francisco Office of Labor Standards Enforcement (OLSE) by May 2, 2025. The Annual Report Form provides the OLSE with a snapshot of the employer’s compliance with these two San Francisco ordinances.

Employers who fail to submit the form by the deadline may incur a penalty of $500 per quarter.

Instructions and resources for employers required to report can be found on the OLSE’s website.

Fair Chance Ordinance

San Francisco’s Fair Chance Ordinance (FCO) applies to employers with five or more employees globally, as well as employers of any size who contract with the City and County of San Francisco. Similar to the State of California’s Fair Chance Act, the FCO prohibits covered employers from inquiring about arrest or conviction records from job applicants for positions requiring at least eight hours of work per week in San Francisco until a conditional offer of employment is made.

Additionally, the FCO restricts covered employers from considering certain facts during the application process, including an arrest that did not result in a conviction.

The annual reporting requirements include disclosing the number of employees hired to work in San Francisco in 2024, whether background checks were conducted on job applicants, and if any individuals with a conviction history were hired.

Health Care Security Ordinance

The Health Care Security Ordinance (HCSO) applies to private and non-profit employers who employ any individual in San Francisco and have twenty or more workers, or fifty or more in the case of non-profits, inside or outside of San Francisco. Under the HCSO, covered employers must spend a legally mandated minimum amount on healthcare for each employee working eight or more hours per week in San Francisco.

The reporting requirement includes disclosing the number of individuals employed each quarter of 2024, the number of employees covered by the HCSO in each of those quarters, the employer’s total spending on healthcare, and the types of healthcare coverage offered to employees.

Retail employers should note that the Los Angeles County Fair Workweek Ordinance will go into effect on July 1, 2025.

This ordinance applies to employers in unincorporated areas of Los Angeles County. Businesses can check on the Los Angeles County Consumer & Business Affairs website to see if they are located in an unincorporated area of the county.

New obligations for retail employers under this ordinance, include:

  • Good-Faith Estimate: Provide new hires with a written good-faith estimate of their work schedule, including their rights under the ordinance.
  • Advance Notice: Post or transmit work schedules at least fourteen (14) days in advance.
  • Work Shift Intervals: Ensure employees have at least ten (10) hours between shifts unless they consent in writing and receive time-and-a-half pay for the second shift.
  • Predictability Pay: Compensate employees for changes to their schedules that occur after the advance notice period.

With regard to predictability pay, employers must provide:

  • One additional hour of pay for each change to the work schedule that results in no loss of time or additional work time exceeding fifteen (15) minutes.
  • Half the regular rate of pay for time not worked due to subtracted hours, changes to start or end times, date changes, cancellations, or on-call shifts where the employee is not called in.

Retail employers must also post notice of the covered employee’s workweek rights, which will be published by the Department of Consumer & Business Affairs. The Department of Consumer & Business Affairs has not published this Notice yet. Retail employers must also retain all required records for three years.

Prepare to comply with these regulations by July 1, 2025. For assistance, contact a Jackson Lewis attorney.

As the weather warms up and we move toward summer many employers may be considering hiring minors for seasonal work. There are, however, some complexities when it comes to hiring and employing minors in the Golden State. Here are some of the basics:

Work Permits

Before employing a minor, employers must ensure the minor has a valid work permit. The process involves:

Emancipated minors can apply for a work permit without parental permission but are still subject to all child labor laws.

Age Restrictions and Work Hours

California’s child labor laws specify the types of work and hours minors can perform:

  • Minors aged 14-15: Can work up to 3 hours on a school day and 8 hours on a non-school day. They can work up to 18 hours per week during school weeks and 40 hours per week during non-school weeks.
  • Minors aged 16-17: Can work up to 4 hours on a school day and 8 hours on a non-school day. They can work up to 48 hours per week.

Prohibited Occupations

Certain occupations are deemed hazardous and are therefore prohibited for minors. These include:

  • Operating heavy machinery
  • Working with hazardous substances
  • Jobs involving exposure to extreme temperatures or loud noises.

By understanding and following these guidelines, California employers can ensure they are compliant with state laws and provide a safe and supportive environment for their young employees.

If you have questions about hiring minors or similar issues, contact a Jackson Lewis attorney to discuss.

Employers in California more than likely have heard of the Private Attorneys General Act, commonly referred to as PAGA. However, understanding what it is, how it functions, and how it can affect them can be challenging.

PAGA is a California statute passed in 2004 to assist the State with its obligation to enforce the California Labor Code. More specifically, PAGA deputizes individuals to file lawsuits against current or former employers to recover civil penalties that were previously only recoverable by the State.  PAGA claims are brought as representative actions, meaning that the employees who initiate the lawsuits seek to represent – and recover civil penalties – on behalf of themselves and other purportedly “aggrieved employees,” making a PAGA lawsuit function as a pseudo-class action.

Given the increased number of PAGA notices submitted each year (nearly 2600 so far this year) and the potential exposure employers face in connection with these claims, it is vital for employers to have a firm understanding of PAGA and how a PAGA suit can impact their business.

The PAGA Notice

Before filing a lawsuit under PAGA, employees must first file a notice with the state Labor Workforce Development Agency (LWDA) indicating their intent to bring a civil action. In addition to identifying the employer(s) at issue, the notice must specify the sections of the Labor Code alleged to have been violated and include sufficient facts and legal theories to support each alleged violation.  

The notice is submitted online with the LWDA and must also be served on the employer(s) via certified mail. For employers receiving a PAGA notice for the first time, it is easy not to understand what the notice is when it comes in. This is because the notice itself is in the form of a letter directed to the LWDA.  As employers have limited time to assess whether to take action to cure or take steps to prevent alleged violations, businesses must train those who receive the mail to identify PAGA notices. 

Once notice is filed with the LWDA, the agency decides whether it will investigate the employee’s claims or allow the employee to proceed with a lawsuit.  Typically, if the LWDA is not going to investigate, they simply do not respond to the employee’s PAGA notice.  If the LWDA has not taken any action after 65 days, the employee may file a private lawsuit under PAGA in court.  While the LWDA historically investigated only a tiny percentage of PAGA notices, there appears to be an increased effort to investigate since PAGA was overhauled in June 2024.

Curing Violations Early

PAGA allows employers to address certain violations during the notice period, thereby avoiding PAGA litigation and penalties in connection with those violations. For notices filed on or after June 19, 2024, the PAGA reform legislation broadened the range of violations that can be corrected.  Curable violations now include claims related to minimum wage, overtime, meal and rest breaks, business expense reimbursements, and itemized wage statements, among others.

Depending on the size of the employer’s workforce, businesses may be able to submit a cure proposal to the LWDA prior to a lawsuit being filed, regardless of whether the LWDA chooses to investigate.  Employer proposals to correct violations are treated as confidential settlement proposals and cannot be used to validate any claim or as an admission of liability.  However, if accepted, the employer’s confirmation that the cure was completed, along with additional supporting records and information, must be shared with the employee who filed the PAGA notice.

Alternatively, employers not eligible to submit a pre-lawsuit cure proposal can request an early evaluation conference when making their initial appearance in the case.  If granted, the company will be required to submit a confidential statement identifying which alleged violations it intends to cure and dispute (which will be shared with the plaintiff’s counsel), and a neutral evaluator will hold a conference to assess whether any alleged violations occurred and whether any of the plaintiff’s claims can be settled.  

While employers can potentially avoid PAGA litigation by curing alleged violations, assessing whether it is in the company’s best interest to submit a cure proposal should not be taken lightly.  The PAGA amendments provide strict requirements to successfully cure violations, including the payment of unpaid wages, liquidated damages, and interest, and the decision to submit a cure proposal typically requires a nuanced analysis of employees’ time and payroll records to calculate payments owed to each employee covered by the proposal. 

PAGA Lawsuits

Once a lawsuit is filed, the individual plaintiffs are stepping into the shoes of the LWDA.  This means the plaintiffs are suing to enforce the California Labor Code on behalf of the State and other alleged aggrieved employees.

A PAGA case is similar to a class action in that you have one or more individual plaintiffs seeking to represent other similarly situated workers, however, there are several differences.  For example, while both actions are entitled to broad discovery, plaintiffs in PAGA actions are not required to certify their claims prior to trial as they would in a class action. 

Because of the representative nature of the action, if a PAGA lawsuit is resolved, the potential settlement must be submitted to the court for approval in order for the release of PAGA claims to be valid. 

Some of the most important changes under the 2024 amendments impact the potential civil penalties available under PAGA.  The new legislation seeks to level the playing field for employers by reducing penalties for technical violations or where the employer can demonstrate it took “all reasonable steps” to comply with the Labor Code, either before or after a PAGA notice is filed.  The amendments also impose stricter standing requirements – by requiring that plaintiffs personally experienced each Labor Code violation they seek to recover penalties for – and expressly grant courts discretion to limit the scope of PAGA claims and evidence presented at trial based on manageability arguments. 

PAGA Prevention

Employers can take various steps to mitigate the risks associated with PAGA claims, and the recent amendments incentivize and reward employers for making good faith efforts to comply with the Labor Code both before and after a PAGA notice is filed.  Proactive steps include:

  • Conducting regular audits of time and payroll practices and records to ensure employees are being properly compensated and receiving state-mandated breaks.
  • Regularly reviewing policies and procedures to ensure compliance with the California Labor Code.
  • Conducting periodic trainings to educate supervisors and managers about company policies and relevant provisions of the California Labor Code.
  • Implementing corrective actions if violations occur. 

In addition to wage and hour issues, employers should also be mindful of potential PAGA claims based on alleged health and safety violations.

Importantly, given the strict deadlines imposed by the new amendments, an employer should promptly review any PAGA notices it receives to determine whether to utilize PAGA’s newly expanded cure and early evaluation options.

If you have questions about PAGA or related issues contact a Jackson Lewis attorney to discuss.

In 2022, California passed Assembly Bill (AB) 1949 which amended the California Family Rights Act (CFRA) to provide for bereavement leave. The law took effect in January 2023, but here are some reminders for employers about bereavement leave requirements.

Under the law, employers with five or more employees must allow eligible employees to take up to five unpaid days of bereavement leave for certain family members. Consistent with the CFRA’s broad definition, a “family member” means a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. Employers may voluntarily allow bereavement leave for a person not defined as a family member under the law. Although bereavement leave is unpaid, employers must allow employees to use any accrued paid sick days or personal days to receive pay during their bereavement leave.

Employees are required to follow the employer’s bereavement leave policy pertaining to notice. Employees are not required to take the five days consecutively but must complete all leave during the three months after the death of the family member. And, although the CFRA provides for bereavement leave, leave taken for bereavement does not affect the amount of time available for CFRA leave.

Employers may require documentation of the death of a family member. This may include a death certificate, obituary, or written verification of death, burial, or memorial service from a mortuary, funeral home, burial society, crematorium, religious institution, or government agency.

If you have questions about bereavement leave or related issues, contact a Jackson Lewis attorney to discuss.

California’s Fair Employment and Housing Act (FEHA) prohibits discrimination both in the selection of employees and during employment based on certain protected characteristics. Federal law provides similar protections under Title VII of the Civil Rights Act of 1964. Consequently, California employers must ensure their employee selection process is free from discrimination.

Any selection policy or practice that disproportionately impacts individuals based on the protected characteristics enumerated below is unlawful unless it is job-related and consistent with business necessity.

Employers must design and implement their selection procedures, including tests and interviews, to make certain they are fair and equitable. FEHA prohibits any non-job-related inquiries of applicants or employees, either verbally or through the use of an application form, that express, directly or indirectly, a limitation, specification, or discrimination as to race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation, or any intent to make such a limitation, specification, or discrimination.

 Employers should also be cognizant of the following requirements under FEHA:

  • Requests for Transfer or Promotion: Employers must consider such requests and must not restrict information on promotion and transfer opportunities in a way that discriminates based protected categories.
  • Training: Employers must provide training opportunities equitably.
  • No-Transfer Policies: Policies maintaining segregation based on protected categories are prohibited.

CA employers must also comply with laws such as the Fair Chance Act, which requires specific procedures when conducting background checks of applicants and prohibits employers with five or more employers from asking candidates about their conviction history before making a job offer.

For questions about employee selection under California law or related issues, please reach out to a Jackson Lewis attorney to discuss.

The purchase or sale of a business in California involves intricate legal considerations, particularly regarding the rights of and responsibilities to employees. Both the buyer and seller need to consider employment ramifications.

For Buyers:

As the new employer, the buyer will need to comply with a host of California requirements and disclosures. Employers new to California should pay special attention to regulatory requirements and may wish to consider arbitration agreements, employee handbooks, meal and rest break policies, timekeeping requirements, and other California-specific obligations. If the acquisition involves a reduction in force, additional considerations will be necessary. Finally, the acquirer may inherit existing policies and practices that could subject them to liability.

For Sellers:

Sellers also need to consider their obligations. Sellers of a business with employees should carefully manage the transition to ensure compliance with state requirements. This involves:

  • Providing written notices to employees about the sale and its implications.
  • Ensuring clear communication regarding any termination of employment.
  • Securing express written consent from employees if there is any intention to transfer obligations to the new business owner.

It is essential, whether buying or selling a business with employees, for business owners to consult with experienced employment lawyers. This ensures compliance with employment laws and helps mitigate potential risks. If you have questions about employment obligations during the buying or selling process, consider contacting a Jackson Lewis attorney for advice.

California employers should begin preparing to comply with their annual requirements under the workplace violence prevention law, California’s Labor Code 6401.9 (commonly known as SB 553), including retraining their staff and reviewing their workplace violence prevention plans.

The law has several annual requirements for employers, including:

  • Reviewing their plan at least annually, including for its effectiveness and employee involvement in the plan.
  • Providing effective training at least annually on all the law’s requirements, including the plan itself (which would mean any changes an employer made during the annual review), how to report workplace violence incidents and workplace violence hazards.

SB 553 went into effect on July 1, 2024, including the training requirement. Because California employers had to scramble to create a workplace violence prevention plan and train their employees on it, many employers created their plan and completed their training before SB 553’s July 1, 2024, effective date. That means the annual deadline to review the plan and retrain employees is likely right around the corner.

Don’t be fooled by the law’s provision on “additional training” — this is only training for any “new or previously unrecognized hazard.” All the workplace violence prevention training that employers gave last year must be repeated.

Cal/OSHA is considering a draft regulation on how to implement the law, which it must propose by Dec. 31, 2025. The next few months will tell how far Cal/OSHA intends to go with adopting stringent regulatory requirements, many of which were purposefully left out of the text of the law.

Jackson Lewis attorneys are here to help provide advice and training relating to workplace violence prevention plans.