California has once again passed several new employment laws that became effective January 1, 2023. In this survey article, we highlight (1) state minimum wage increases, (2) the new “designated person” addition under California paid sick leave and the California Family Rights Act (CFRA), and (3) expanded bereavement leave. California’s new pay transparency law, also effective January 1, 2023, is discussed in a separate article in this issue of Perspectives.
State Minimum Wage Increase
Effective January 1, 2023, California’s minimum wage increases to $15.50 per hour for all employers regardless of size. This is the first time since 2016 that the minimum wage will be the same for all employers. Please note that many cities and counties have their own local minimum wage laws that require higher hourly rates. For example, effective July 1, 2022, San Francisco’s and Berkeley’s minimum wages became $16.99 per hour.
With the resulting state minimum wages increases, this also means that California employers should assess the salaries paid to their exempt employees. Generally, exempt employees must earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment (twice the state minimum wage x 2,080 hours/year). Lab. Code Sect. 515(a). For California employees in 2023, this means the minimum exempt salary is $64,480. (In calculating minimum exempt salary requirements, the California minimum wage controls and overrides any higher local minimum wage ordinances.)
Of course, the salary test is just one of the components of properly classifying employees as exempt with the critical and more ambiguous test being whether the worker spends more than half their time performing exempt work duties.
“Designated Person” Addition Under CFRA and Paid Sick Leave
As of January 1, 2023, employees will be able to use their sick leave as well as CFRA leave (for employees working with employers with five or more employees) to care for one “designated person” in addition to any eligible family member. This change was made possible by the passage of AB 1041, which added the “designated person” term to both CFRA leave as well as paid sick leave under California’s Healthy Workplaces, Healthy Families Act of 2014.
The ”designated person” is slightly different depending on the type of leave. If applied to paid sick leave, a “designated person” is defined as “a person identified by the employee at the time the employee requests paid sick leave.” If applied to unpaid CFRA leave, a “designated person” is “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” Thus, in the CFRA context, the designated person must have a blood or family-type relationship to the employee, while this requirement does not exist in the paid sick leave context. Further, for both paid sick leave and CFRA leave purposes the employer may limit the employee to identifying only one designated person per twelve-month period.
Expanded Bereavement Leave
Although many employers voluntarily provide some form of paid or unpaid bereavement leave, pursuant to AB 1949 for employers with five or more employees California law now requires five days of unpaid bereavement leave as of January 1, 2023.
Under the new law, bereavement leave can be used for the death of a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. The leave further does not have to be used as five days concurrently – so it can be broken up by the employee – but it must be used “within three months of the date of death of the family member.” Employers may also request documentation of the family member’s death from the employee within thirty days from the first day of leave.
Finally, this new unpaid bereavement leave is considered job-protected leave, so employers may not discriminate or otherwise retaliate against any employee using or exercising the right to take such leave.
This article is not an exhaustive list of the recent legislation, rules, and regulations affecting California employers. Nonetheless, the overview should prompt employers to make sure that they are aware of key legislation and review and update their employee handbooks, employment agreements, and other policies for compliance-related purposes.
Scherer Smith & Kenny LLP remains available to guide you through these and other nuances in California’s dynamic and ever-changing employment law arena. For additional information, please contact Denis Kenny at dsk@sfcounsel.com, Ryan Stahl at rws@sfcounsel.com, or John Lough, Jr. at jbl@sfcounsel.com.
-Written by Ryan Stahl