New California Laws for 2023

California capitol building

During the 2022 legislative session, California legislators passed 1,166 bills and the governor signed 997 of them into law.  This is a summary of new laws you should be familiar with if you are in the construction trades or a small business owner.

All the new laws discussed here become effective January 1, 2023, unless otherwise noted.

Minimum Wage Changes

A new minimum wage law now eliminates the two-tiered system and applies to all employers. Starting on January 1, 2023, employers of any size must pay a minimum wage of no less than $15.50 per hour.

Some cities and counties have passed local ordinances that already exceed the new statewide minimum wage.  The City of Los Angeles increased its minimum wage last July to $16.04 an hour for all covered employees, and in unincorporated areas of Los Angeles County, the rate is set at $15.96.

In addition to adjusting the minimum wage for inflation, the new state law will also require employers to adjust the minimum annual salary for overtime-exempt employees. Currently, California requires employers to pay a minimum of $58,240 annually to exempt an employee from overtime requirements; this figure will increase to $64,480 effective January 1, 2023.

Employers should review their current pay practices and policies to ensure that they are compliant with the new law. Further, employers should consider updating their job descriptions and making other necessary adjustments to comply with the new minimum wage requirements.  Should you have any questions regarding how these changes may affect your business, please do not hesitate to contact an employment attorney for more information.

New Workers Compensation Requirements for Licensed Contractors

The California Contractors State License Board (CSLB) issued a bulletin on October 11, 2022 announcing the enactment of Senate Bill 216 and its implications for licensed contractors throughout the state.

Starting January 1, 2023, contractors with C-8, C-20, C-22 and D-49 license classifications will be required to obtain workers’ compensation insurance coverage even if they have no employees. This requirement will extend to all license classifications on January 1, 2026. It is important to note that roofing contractors (C39) are already subject to this requirement under existing law.

The CSLB bulletin provides additional information regarding the changes and guidance for licensed contractors who will be impacted. It is important for contractors to understand their obligations and comply with the new requirements to avoid potential legal action or penalties from the Board.

For more information on Senate Bill 216 and its implications, visit the California Contractors State License Board website at www.cslb.ca.gov/sb216

California Contractor License Bond Amounts to Increase

Effective January 1, 2023, an applicant or licensee for a Contractors State License will have to file or have on file with the Contractors State License Board (“CSLB”) a bond in the amount of $25,000.00 instead of the current $15,000.00. Where applicable, it also requires a Bond of Qualifying Individual in the sum of $25,000.00, increased from the current $12,500.00.

This was the topic of an article we published in October which you can read here.

CalSavers Retirement Savings

SB 1126 expands access to retirement savings plans for those who are employed, paving the way for more people in California to save securely and confidently. This legislation broadens eligible employers under CalSavers Retirement Savings Trust Act so that even entities with just one employee can now offer a payroll deposit option to their staff – allowing everyone from larger enterprises all the way down to single-person businesses an opportunity they may not have had before.

Wages and Payroll Records for Public Works Employees

SB 954 creates a database for government agencies, contractors, and subcontractors to monitor compliance with prevailing wage regulations. Through electronic submission of payroll records, the database will provide enhanced oversight of public works projects, as well as faster and more efficient access to payroll records.

Contractors and subcontractors must also submit a copy of their certified payroll records to the Trust Funds in accordance with federal law. Furthermore, any individual or organization that is part of a committee established under federal law can request access to the records from the Department of Industrial Relations, which is responsible for managing the database.

It’s important to note that SB 954 does not change existing labor laws or regulations; rather it creates an additional tool to help monitor the compliance with these laws and regulations.

The Department of Industrial Relations is currently in the process of creating and implementing the database, which will be made available to relevant trust funds and committees upon completion. As part of this process, employers and workers should ensure that all certifications are accurate and up to date for submission into the new system.

Designated Person Under California Family Rights Act

The amendments made by AB 1041 include expanding the class of individuals for whom an employee may take leave to include a “designated person.” A designated person is defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” This amendment is intended to include individuals such as step-children, same-sex partners, domestic partners, foster children, legal wards, and other persons specified in the CFRA. Furthermore, these individuals would be eligible for up to twelve weeks of family care and medical leave as defined by the CFRA.

AB 1041 also requires employers to provide written notice of this amendment to employees within 30 days after passage or within 30 days of the employee’s hire date. This notice must also be provided to all new employees upon hire and must explain the CFRA’s protections and the employee’s rights.

It is important for employers to be aware of these changes to ensure that they remain in compliance with the CFRA and other California labor laws. Failure to comply may result in civil penalties, criminal liability, or both. Employers should also ensure that they are providing employees with the written notice required by AB 1041.

Prevailing Wage and Hauling on Public Works Projects

AB-1851 requires that drivers of vehicles used for on-hauling and hauling of materials used in public works projects must be paid the prevailing wage. AB-1851 also requires that any hauling done under a contract with a public agency must be done by a driver employed with a licensed hauling company.

The California Department of Industrial Relations is responsible for the enforcement of AB-1851 and other labor laws. The Department ensures that all contractors comply with prevailing wage requirements on public works projects, and provides resources to help employers understand their obligations for paying employees appropriately.

For more information on AB-1851 and other labor laws in California, please visit the website of the Department of Industrial Relations at dir.ca.gov.

Bereavement Leave

Under AB 1949, employees must provide their employer with advance notice, to the extent practicable, of their intention to take bereavement leave and should make a reasonable effort to schedule bereavement leave to not unduly disrupt the operations of the employer. Employers may require documentation from an employee taking bereavement leave that demonstrate how the requested leave relates to the death of a family member.

Finally, AB 1949 prohibits employers from denying or interfering with an employee’s rights under this bill or taking any adverse action against an employee for exercising those rights. Employees who believe their rights have been violated may file a complaint with the Department of Fair Employment and Housing.

Employer Prohibitions During Workplace Emergencies

SB 1044 is a law that protects employees from adverse action in the event of an emergency condition. Employers are prohibited from taking or threatening any kind of retaliation against an employee who has a reasonable belief that the workplace or worksite is unsafe and therefore refuses to report to, or leaves, the affected area. However, this protection does not extend to all workers and is specifically excluded from first responders, employees required by law to render aid or remain on the premises in case of an emergency, and certain other groups of employees.

Employers must ensure that their workplace adheres to the standards set out in SB 1044 for a safe working environment during times of emergency conditions. This includes providing proper safety protocols and equipment, as well as providing adequate training on how to handle emergency situations. Furthermore employers should be aware of the rights their employees have in the event of an emergency condition, so that they can prevent any retaliatory actions from taking place.

Employees who feel unsafe at work due to an emergency condition must report their concerns to their employer and should not be subjected to any kind of retaliation or harassment for doing so. Furthermore, they should document any attempts of adverse action taken by the employer and contact the relevant authorities if necessary. By adhering to SB 1044, employers can ensure that their workplace is safe for all employees during times of emergency conditions.

Pay Transparency

Under the provisions of SB 1162, employers must provide job applicants with access to salary scales for any role posted. This gives potential candidates greater transparency when applying for positions, allowing them to make informed decisions about their career paths and earning potential. Furthermore, employers are required to maintain accurate records pertaining to job titles and wage rate history for each employee throughout the duration of their employment and for three years after.

SB 1162 also sets forth new data reporting requirements based on protected characteristics, including gender, age, race, ethnicity, religion, national origin or disability status. Employers must submit pay data reports by the designated date each year to remain compliant with the law. Non-compliance can result in significant civil penalties.

It is important for employers to be aware of the changes brought about by SB 1162 and ensure they are compliant with the law prior to its effective date of January 1, 2023.

If you have any questions or comments regarding this article, please do not hesitate to contact Scott Green at The Green Law Group, LLP.

Please note that this article is only intended to provide some general educational information. For your particular legal questions, be sure and consult with an attorney.

Scott Green
(805) 306-1100 ext. 114
scott@thegreenlawgroup.com