Depending upon many different factors, a state-wide minimum wage has been established for healthcare workers in California which will be phased in over time. On October 13, 2023, Governor Newsom signed Senate Bill (SB) 525, which enacts a multi-tiered statewide minimum wage schedule for health care workers employed by certain covered healthcare facilities. The new law established 5 different minimum wage schedules depending upon the nature of the employer.

This follows several California cities attempting to implement healthcare worker minimum wages. Additionally, the City of Inglewood has enacted a city-wide healthcare minimum wage law.

Categories of Employers

Senate Bill 525 establishes a comprehensive minimum wage schedule for “covered health care employees,” outlining schedules depending on how a facility is classified.   A hospital’s classification is determined by facility size, type, location, and governmental payor mix percentage.  SB 525’s definition of “covered health facility” applies to nearly every type of health care facility except those owned, controlled, or operated by the California Department of State Hospitals, tribal clinics exempt from licensure, and outpatient settings operated by federally recognized Indian tribes.

The law applies to “covered health care employee,” which also encompasses a broad array of positions, from patient care roles like nurses and physicians to support positions such as janitors and clerical workers. The law’s coverage extends to contracted or subcontracted employees when the healthcare facility has control over their wages, hours, or working conditions.

The law, however, excludes outside salespersons, public sector employees not primarily involved in healthcare, and delivery or waste collection workers not directly employed by the healthcare facility.   

In the context of this legislation, the focus is less on whether a healthcare facility is “covered,” as most are, and more on how a facility is classified for the purpose of implementing the phased minimum wage schedules.  SB 525 creates the following four classifications of healthcare employers:

  1. Large Employers and Integrated Health Systems: Covered healthcare facilities that: (1) have 10,000 or more full-time equivalent employees (FTEs); (2) are part of an integrated healthcare delivery system; and, (3) are county healthcare systems with 10,000 or more FTEs or operated by a county with a population of 5,000,000 or more, or (4) that is a dialysis clinic.   

Minimum Wage Schedule

  • From June 1, 2024, to May 31, 2025: $23 per hour
  • From June 1, 2025, to May 31, 2026: $24 per hour
  • From June 1, 2026, until indexed to the lower of inflation or 3.5%: $25 per hour
  1. Hospitals with High Government Payer Mix, Rural Independent Facilities, or County Run Facilities in Low Population Counties: Independent hospitals with elevated governmental payer mix (75% or more), hospitals with a very high governmental payor mix (90% or more), rural independent covered health care facility, or covered health care facilities owned, affiliated, or operated by a county with a population of 250,000 or less.

Minimum Wage Schedule

  • From June 1, 2024, to May 31, 2033: $18 per hour, with 3.5% increases annually.
  • From June 1, 2033, until indexed to the lower of inflation or 3.5%: $25 per hour
  • Primary Care, Free, Community, and Rural Clinics: Primary care clinics, Free clinics not run by governmental entities, community clinics along with their associated intermittent clinics, rural health clinics, and urgent care clinics owned and operated by primary care clinics.

Minimum Wage Schedule

  • From June 1, 2024, to May 31, 2026: $21 per hour
  • From June 1, 2026, to May 31, 2027: $22 per hour
  • From June 1, 2027, until indexed to the lower of inflation or 3.5%: $25 per hour
  1. Other Covered Health Care Facilities: All other covered health care facility employers that don’t fall into the above three categories, including hospitals, skilled nursing facilities as specified, integrated delivery systems, ambulatory surgical centers, urgent care clinics, medical groups, medical foundations, county mental health facilities, and county correctional health facilities.

Minimum Wage Schedule

  • From June 1, 2024, to May 31, 2026: $21 per hour
  • From June 1, 2026, to May 31, 2028: $23 per hour
  • From June 1, 2028, until indexed to the lower of inflation or 3.5%: $25 per hour

Appeals and Waiver Program

For a limited period of time before January 1, 2025, employers will have the ability to challenge the accuracy of the classification of covered health care employers according to the numbers of full-time equivalent employees, system affiliation, payor mix, and any other relevant information with the California Department of Health Care Access and Information.

The Department of Industrial Relations, in consultation with relevant healthcare departments, will also offer waivers to certain healthcare facilities. To be eligible for this waiver, the healthcare facility must prove that compliance with the new wage laws would put its continued operations in jeopardy. Facilities can renew their waivers 180 days before the current one expires.

State Preemption

The bill preempts local ordinances, regulations, or administrative actions that relate to wages, salary, or compensation for covered health care facility employees. Any such local laws enacted after September 6, 2023, are void and cannot be enforced.

If you have questions about SB 525 or related issues contact a Jackson Lewis attorney to discuss.

California’s Governor signed Assembly Bill (AB) 1076 on October 13, 2023, which adds new Business & Professions Code §16600.1, making it unlawful to impose non-compete clauses on employees – which contractual restrictions already are void under Business & Professions Code §16600. 

AB 1076 codifies existing case law in Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, regarding the prohibition on noncompete agreements being broadly construed to void such agreements and clauses in the employment context when they do not meet specific exemptions.

New Section 16600.1 states, in full:

16600.1. (a) It shall be unlawful to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement, that does not satisfy an exception in this chapter.

(b) (1) For current employees, and for former employees who were employed after January 1, 2022, whose contracts include a noncompete clause, or who were required to enter a noncompete agreement, that does not satisfy an exception to this chapter, the employer shall, by February 14, 2024, notify the employee that the noncompete clause or noncompete agreement is void.                                          

(2) Notice made under this subdivision shall be in the form of a written individualized communication to the employee or former employee, and shall be delivered to the last known address and the email address of the employee or former employee.

(c) A violation of this section constitutes an act of unfair competition within the meaning of Chapter 5 (commencing with Section 17200).

AB 1076 follows the passage of another bill reiterating California’s ban on restrictive covenants, Senate Bill 699, which provides that the ban extends to agreements regardless of the state in which it was signed and or the state in which the employee worked.  SB 699 also creates a private right of action.

Under AB 1076, employers must notify current employees and former employees (employed after January 1, 2022), that any noncompete agreement or noncompete clause contained within an agreement the current or former employee signed is void unless the agreement or clause falls within one of the statutory exceptions set forth in Business and Professions Code section 16600, et seq.  

Such notices must be an individualized communication to the employee or former employee, delivered to the last known address and email address the employee provided to the employer, and must be provided by next Valentine’s Day, February 14, 2024.

AB 1076 also provides that a violation of the prohibition on noncompete agreements in employment also constitutes unfair competition under California’s Unfair Competition Law, Business & Professions Code section 17200, et seq.

New Business & Professions Code §16600.1 takes effect on January 1, 2024.

If you have questions about AB 1076 or related issues, contact a Jackson Lewis attorney to discuss.

In December 2022, the City of Berkeley passed the Fair Workweek Employment Standards Ordinance. The ordinance will become operative on January 12, 2024.

The Berkeley ordinance is similar to the City of Los Angeles’s Fair Work Week Ordinance which took effect April 1, 2023,and other local ordinances regarding how employees are scheduled and the flexibility of scheduling provided to employees.

Covered Employers and Covered Employees

The ordinance applies to any employer in the City of Berkeley with 10 or more employees in the city that is:

  • primarily engaged in the building services, healthcare, hotel, manufacturing, retail, or warehouse services industries, and employs 56 or more employees globally; or
  • primarily engaged in the restaurant industry, and employs 100 or more employees globally; or
  • a franchisee primarily engaged in the retail or restaurant industries and is associated with a network of franchises with franchisees employing in the aggregate 100 or more employees globally; or
  •  a not-for-profit corporation organized under Section 501 of the United States Internal Revenue Code in the industries specified under subsection (a)(1), (2), and (3) and employs 100 or more employees globally.

The ordinance applies to non-exempt employees who perform at least two hours of work within Berkeley for a covered employer.

Obligations of Covered Employers

The ordinance includes several obligations for covered employers pertaining to scheduling, including the following:

  • Provide each employee with a good faith estimate in writing of the employee’s work schedule. The employee may submit a written request to modify the estimated work schedule.  A covered employer, in its sole discretion, may accept or reject the employee’s request.  The covered employer is required to notify the employee of the covered employer’s determination in writing prior to or on the commencement of employment.
  • Provide employees with at least two weeks’ notice of their work schedules by doing one of the following:
    • Posting the work schedule in a conspicuous place at the workplace that is readily accessible and visible to all employees; or
    • Transmitting the work schedule by electronic means, so long as all employees are given access to the electronic schedule at the workplace.
  • Provide employees with predictability pay for scheduling changes under certain circumstances.
  • Provide new employees with an initial work schedule prior to or on their first day of employment. Thereafter, the covered employer shall include the new employee in an existing schedule with other employees.
  • Provide an employee written notice of any change to the employee’s posted or transmitted work schedule within 24 hours of a schedule change. This notice requirement shall not apply to any schedule changes the employee initiates.

If you have questions about the Berkeley ordinance or related issues, contact a Jackson Lewis attorney to discuss.

California’s Governor signed Senate Bill (SB) 54, which requires a venture capital company to report annually to the California Civil Rights Department (CRD) on its funding determinations related to companies primarily founded by diverse founding team members.

Under the law, a venture capital company is covered by the requirements if it meets either of the following criteria:

  • Primarily engages in the business of investing in, or providing financing to, startup, early-stage, or emerging growth companies.
  • Manages assets on behalf of third-party investors, including, but not limited to, investments made on behalf of a state or local retirement or pension system.

And meets any of the following criteria:

  • The company is headquartered in California.
  • The company has a significant presence or operational office in California.
  • The company makes venture capital investments in businesses that are located in or have significant operations, in California.
  • The company solicits or receives investments from a resident of California.

Under the new law, covered venture capital companies will be required to report to the CRD on an annual basis starting March 1, 2025, regarding the makeup of founding teams and businesses to which funding is provided by the company.

The statute provides for enforcement by the CRD.

If you have questions about SB 54, or other diversity disclosure requirements, contact a Jackson Lewis attorney to discuss.

Senate Bill (SB) 848, scheduled to go into effect on January 1, 2024, requires employers with 5 or more employees to provide employees who have worked for at least 30 days with up to five days of reproductive loss leave.

Under the new law, it is unlawful for a covered employer to refuse to grant a covered employee with five days of leave following a reproductive loss. As defined by SB 848, a “reproductive loss” includes a miscarriage, failed surrogacy, stillbirth, unsuccessful “assisted reproduction” (such as artificial insemination or embryo transfer), or failed adoption. In the event an employee suffers more than one reproductive loss within a 12-month period, his/her employer is not obligated to grant a total amount of leave in excess of 20 days within 12 months.

An employee must be permitted to take the leave on nonconsecutive days and the leave must be completed within three months of the reproductive loss. The leave time can be unpaid unless the employer has a policy stating otherwise. However, SB 848 authorizes an employee to use certain other leave balances otherwise available to them, including accrued and available paid sick leave. The bill makes leave under these provisions a separate and distinct right from any other right under the California Fair Employment and Housing Act.

The bill also prohibits retaliation against an individual who uses this leave or shares information about the leave and requires employers to maintain employee confidentiality relating to reproductive loss leave. 

Covered Employers

Employers with 5 or more employees are required to provide the leave.  

Covered Employees

In order to be entitled to the leave, employees must have been employed for at least 30 days prior to the commencement of the leave.

Reproductive Loss Defined

Under the new law, reproductive loss includes a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.

If you have any questions about SB 848 or related issues, a Jackson Lewis attorney will be happy to help answer your questions or tailor your Company’s policies to ensure compliance with the new law.

On October 10, 2023, Governor Newsom signed Senate Bill (SB) 723, which moves the expiration the right of recall rights for employees in the hospitality and service industry from December 31, 2024, to December 31, 2025. The bill adds a presumption that a separation due to a lack of business, reduction in force, or other economic, non-disciplinary reasons is due to a reason related to the COVID-19 pandemic.

In 2021, Newsom signed Senate Bill (SB) 93 which required certain employers in hospitality and service industries to rehire employees laid off due to the COVID-19 pandemic.

SB 93 applied to the following industries:

  • Hotels
  • Private clubs
  • Event Centers
  • Airport Hospitality Operations
  • Airport Service Providers
  • Building Services to office, retail, or other commercial buildings

Previously SB 93 was set to sunset at the end of 2024, but SB 723 extends the sunset until the end of 2025.

If you have questions about SB 723, or related issues contact a Jackson Lewis attorney to discuss.

On October 8, 2023, California’s Governor signed Assembly Bill (AB) 647, which revises recall rights for grocery workers when there is a change of control in a grocery establishment.

Under the bill, the definition of “grocery establishment” includes a “distribution center owned and operated by a grocery establishment and used primarily to distribute goods to and from its owned stores,” regardless of its square footage. It also excludes from the definition a retail store that ceased operations for 12 months or more.

Existing law establishes grocery worker retention provisions requiring the buyer of an existing grocery store to retain employees for a 90-day transition period during which an employee may only be discharged for cause, as specified, and considered for continued employment at the end of the transition period.

The bill also adds an enforcement mechanism for violations of the law.

The revisions to the recall rights take effect January 1, 2024.

If you have questions about AB 647, or related issues contact a Jackson Lewis attorney to discuss.

On October 7, 2023, Governor Newsom signed Senate Bill (SB) 700, which makes it unlawful under the Fair Employment and Housing Act (FEHA) for an employer to discriminate against a job applicant based on information regarding prior use of cannabis that is learned from a criminal history.

However, SB 700 does not preempt state or federal laws requiring an applicant to be tested for controlled substances, nor is an employer prohibited from asking about an applicant’s criminal history as long as in compliance with state law requirements.  

This change takes effect on January 1, 2024.

As a reminder, in 2022, the California legislature passed Assembly Bill (AB) 2188, which makes it unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment based upon: (1) a person’s use of cannabis off the job and away from the workplace, or (2) an employer-required drug screening test that has found the person to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids. AB 2188 also takes effect on January 1, 2024.  There is an exemption for the building and construction trades.

If you have questions about SB 700 or related issues, contact a Jackson Lewis attorney to discuss.

On October 4, 2023, California’s Governor signed Senate Bill (SB) 616, which increases the amount of paid sick leave employers are required to provide to California employees.

Beginning on January 1, 2024, employers must increase the amount of sick leave provided to California employees from three days/24 hours to five days/40 hours.

Accrual

Under California’s existing paid sick leave statute, employees who work in California for the same employer for 30 or more days must accrue no less than one hour of paid sick leave per every 30 hours worked. Current law allows employers to use alternative accrual methods (other than the one hour of paid sick leave per every 30 hours worked), so long as employees have three days/24 hours of available paid sick leave by the employee’s 120th calendar day of employment or each calendar year. Under SB 616, employers may continue to use different accrual methods other than one hour per every 30 worked but must also ensure employees have no less than five days/40 hours of accrued paid sick leave by the 200th calendar day of employment or each calendar year.

Moreover, SB 616 modifies existing law by stating that an employer may satisfy the accrual requirements of the statute by providing three days/24 hours of paid sick leave that is available to the employee to use by the 120th calendar day of employment, and no less than five days/40 hours of paid sick leave by the 200th calendar day of employment.

Use Limits

SB 616 increases the amount of sick leave that an employee may use in each year of employment, calendar year, or 12-month period, from three days/24 hours to five days/40 hours.   

Accrual Cap and Carryover

SB 616 also requires that employers increase the accrual and carryover cap to ten days/80 hours. However, no accrual or carryover is required if the employer provides five days/40 hours of paid sick leave upfront each year of employment, calendar year, or 12-month period.

In-Home Supportive Service Providers and Employees Covered by CBAs

The bill also amends the schedule for in-home supportive service providers (IHSS) to increase their paid sick leave accrual to five days/40 hours in each year of employment.

In addition, SB 616 extends certain procedural and anti-retaliation provisions in existing paid sick leave law to employees covered by valid collective bargaining agreements that are otherwise exempt from other provisions of the paid sick leave law.

* * * *

The changes to California’s paid sick leave statute take effect January 1, 2024.

If you have questions about SB 616 or issues related to paid sick leave, please contact a Jackson Lewis attorney to discuss.