In 2024, California enacted legislation impacting several labor and employment issues, including raising the minimum wage for certain workers, protecting employee’s reproductive rights, protecting employee’s rights to take family leave, and expanding employee’s rights against discrimination and whistleblower retaliation. Not all legislation benefits employers. In particular, California enacted two pieces of legislation setting forth major reforms to the Private Attorney General Act (“PAGA”) which streamlines the PAGA process and potentially minimizes the penalties to be imposed against employers. California has also passed several bills protecting employees from so-called Labor Trafficking.

AB 610 — Fast food restaurant industry

What the law currently requires

In 2023, California enacted AB 1228 which, among other things, raised the minimum wage for “fast food restaurant employees” to $20 per hour effective April 1, 2024. Existing law, until January 1, 2029, establishes the Fast Food Council and prescribes the council’s purposes, duties, and limitations. Existing law establishes an hourly minimum wage for fast food restaurant employees, authorizes the council to increase the hourly minimum wage pursuant to specified parameters, and sets forth requirements, limitations, and procedures for adopting and reviewing fast food restaurant health, safety, and employment standards.

Existing law defines terms for these purposes, including defining “fast food restaurant” to mean a limited-service restaurant in the state that is part of a national fast food chain. Existing law exempts from the definition of “fast food restaurant” an establishment that on September 15, 2023, operates a bakery in a prescribed manner, as long as it continues to operate such a bakery. Existing law also exempts certain restaurants in grocery establishments.

How this bill changes the law

This bill would exempt additional restaurants from the definition of “fast food restaurant,” including such restaurants in airports, hotels, event centers, theme parks, museums, and certain other locations, as prescribed.

This bill would declare that it is to take effect immediately as an urgency statute.

SB 828 — Minimum wages

What the law currently requires

In 2023, California passed SB 525 (Health Care Minimum Wage) which, among other things, phased in pay increases for the state’s lowest-paid health care workers to $25 an hour. The law has different pay scales based on where they work and who they work for. The law was set to take effect on June 1, 2024.

How this bill changes the law

This emergency bill was signed by Governor on May 31, 2024 and became effective immediately. This bill delayed the minimum wage adjustments set by SB 525 by one month, from June 1, 2024 to July 1, 2024. However, due to the budget deal struck on June 22, 2024 (SB 159), the delay will be until October 15, 2024. The October 15 trigger date is contingent on the state bringing in at least 3% more revenue than the administration expects in the first quarter of the upcoming fiscal year, or the state collecting data to secure federal funding that will help offset some of the costs related to the law. If the money does not come through, the law and the wage increases would take effect on January 1, 2025.

Since the state obtain the necessary federal funding, the wage adjustments took place on October 15, 2024.

AB 2011 — Unlawful employment practices

What the law currently requires

Existing law, the California Fair Employment and Housing Act (“FEHA”), establishes the Civil Rights Department within the Business, Consumer Services, and Housing Agency (“CRD”) and sets forth its powers and duties relating to enforcement of civil rights laws with respect to housing and employment.

Existing law requires the CRD to create a small employer family leave mediation pilot program for the resolution of alleged violations of family care and medical, and bereavement leave, applicable to employers with between 5 and 19 employees.

Existing law requires the CRD to generally initiate the mediation within 60 days following a request by either the employer or employee prohibits an employee from pursuing a civil action until the mediation is complete or the mediation is deemed unsuccessful, and tolls the statute of limitations applicable to the employee’s claim, including for all related claims not subject to mediation, from the date of receipt of a request to participate in the program until the mediation is complete or the mediation is deemed unsuccessful.

Under existing law, the mediation is deemed complete when one of specified events occurs, including that the mediator determines that the core facts of the employee’s complaint are unrelated to the specified family care and medical and bereavement leave provisions.

Existing law repeals the pilot program on January 1, 2025.

How this bill changes the law

AB 2011 primarily focuses on unlawful employment practices related to family leave and reproductive loss leave for small employers with 5 to 19 employees. The bill expands on the CRD’s existing mediation program for resolving alleged violations of family/medical, andbereavement leave, by including reproductive loss leave provisions. Key changes include:

• Expansion of Mediation Program: AB 2011 extends the existing pilot program to include reproductive loss leave. This means that any alleged violations related to reproductive loss leave will now be subject to the same mediation requirements as family care and medical leave.
• Tolling of Statute of Limitations: The statute of limitations for claims related to reproductive loss leave will now be tolled from the date the employee contacts the CRD’s dispute resolution division until the mediation is complete or deemed unsuccessful.
• Indefinite Extension of Program: AB 2011 removes the current repeal date of January 1, 2025, making the pilot program a permanent CRD offering. This change underscores the CRD’s focus on mediation as a means of resolving employment disputes and providing a consistent framework for small employers and employees to address grievances.

AB 3105 — Employment

What the law currently requires

Existing law establishes the Division of Labor Standards Enforcement, headed by the Labor Commissioner, within the Department of Industrial Relations, for the purpose of enforcing labor laws. Existing law exempts an employee from certain provisions governing wages, hours, and other protections if the employee meets certain requirements, including being employed to provide instruction for a course or laboratory at an independent institution of higher education. Specifically, such employees are classified as exempt “professional employees.”

How this bill changes the law

This bill revises the definition of an independent institution of higher education for purposes of the above-described exemption by including those institutions whose formation as a nonprofit corporation occurred out of this state and excluding those institutions whose formation occurred on or after January 1, 2023 — The bill would declare that these provisions are declaratory of existing law.

AB 1870 — Notice to employees

What the law currently requires

Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of employment. Employers who are subject to the workers’ compensation system are generally required to keep posted in a conspicuous location frequented by employees and easily read by employees during the hours of the workday a notice that includes, among other information, to whom injuries should be reported, the rights of an employee to select and change a treating physician, and certain employee protections against discrimination. Existing law requires the administrative director to make the form and content of this notice available to self-insured employers and insurers.

How this bill changes the law

This bill would require the above notice to include information concerning an injured employee’s ability to consult a licensed attorney to advise them of their rights under workers’ compensations laws, and that in most instances, attorney’s fees will be paid from an injured employee’s recovery. The workers’ compensation system has a complex and structured process for payment of attorneys’ fees that can be confusing, and employees may not otherwise realize the impact of the attorneys’ fees on their recovery payment.

AB 2299 — Labor Commissioner

What the law currently requires

Existing law prohibits employers from making, adopting, or enforcing a policy that prevents an employee from disclosing violations of a state or federal statute, or a violation or noncompliance with a local, state, or federal regulation to, among others, a government or law enforcement agency, or from retaliating against an employee who makes a disclosure.

Existing law requires an employer to prominently display a list of employees’ rights and responsibilities under the whistleblower laws. Existing law creates the Division of Labor Standards Enforcement within the Department of Industrial Relations and vests the division with the general duty of enforcing labor laws. Existing law provides that the Labor Commissioner is the Chief of the Division of Labor Standards Enforcement.

How this bill changes the law

Existing whistleblower protections require California employers to prominently display a list of employees’ rights and responsibilities provided under the whistleblower laws. However, little in the way of guidance is provided when it comes to what the prominently displayed posting should include, other than a minimum font size and that it must include the telephone number of the whistleblower hotline.

AB 2299 provides employers with some much-needed clarification by making the Labor Commissioner responsible to develop a model list of employee rights and responsibilities under existing whistleblower laws. The new statute also clarifies that an employer who posts the model list will be deemed in compliance with the requirement to prominently display the list of employees’ rights and responsibilities.

The Labor Commissioner has until the statute’s effective date of January 1, 2025 to develop the model list and make it available to employers – at no cost – on its website

AB 2288 and SB 92 — Labor Code Private Attorneys General Act of 2004

What the law currently provides

Existing law, the Labor Code Private Attorneys General Act of 2004 (“PAGA”), authorizes an aggrieved employee to bring a civil action, on behalf of that employee and other current or former employees, to enforce a violation of any provision of the Labor Code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees pursuant to certain notice and cure provisions.

With respect to a violation by a person of a provision that does not provide for a civil penalty, PAGA makes that person liable for a civil penalty of $500 if, at the time of the alleged violation, the person does not employ one or more employees. If, at the time of the alleged violation, the person employed one or more employees, PAGA makes that person liable for a civil penalty of $100 for each aggrieved employee per pay period for the initial violation and $200 for each aggrieved employee per pay period for each subsequent violation.

PAGA requires 75% of civil penalties recovered by aggrieved employees to be distributed to the Labor and Workforce Development Agency (“LWDA”) for enforcement of labor laws, including the administration of PAGA, and for education of employers and employees about their rights and responsibilities under the Labor Code, as specified, and requires 25% of civil penalties recovered by aggrieved employees to be distributed to the aggrieved employees, except as prescribed.

How this bill changes the law

You can read our previously published article on these PAGA reforms. The following are the key changes for each bill:

AB 2288 introduces several changes to streamline PAGA claims

• Pre-Filing Requirements: Before filing a PAGA claim, employees must provide written notice to the employer, detailing the specific violations. Employers have a chance to cure certain violations within a specified period, potentially reducing the number of lawsuits.
• Reduction of Civil Penalties: The bill would, subject to an exception, also reduce the civil penalties prescribed by PAGA to 15% or 30%, as specified, if a person accused of a violation has taken all reasonable steps to comply with the provisions alleged to have been violated in the required notice provided by the aggrieved employee.
• Standing requirement: PAGA plaintiffs can only represent aggrieved employees for violations that they themselves actually suffered. Courts had previously held that an employee could bring a PAGA action for all violations on behalf of all aggrieved employees whether or not they suffered those violations—they needed only suffer one violation of any type to represent all employees for all violations. This is no longer the case. Now, a plaintiff must have “personally suffered” the alleged violation to sue for that violation.
• Statute of Limitations: AB 2288 amends the statute of limitations for filing PAGA claims to clarify the one-year time frame. PAGA plaintiffs must have personally suffered violations within the one-year statute limitations period in order to bring a claim. Previously, this was not the case, allowing individuals to serve as PAGA plaintiffs even if they did not personally experience any alleged violations within the one-year statute of limitations.
• Increased Transparency: The bill requires more detailed reporting on PAGA settlements and outcomes. This transparency aims to provide insights into the effectiveness of PAGA and ensure accountability.
• Enhanced Employee Protections: AB 2288 strengthens protections against retaliation for employees who file PAGA claims or participate in related proceedings.

SB 92 complements AB 2288 by addressing procedural aspects and enforcement mechanisms

Key provisions include:

• Judicial Oversight: SB 92 grants courts more oversight in approving PAGA settlements. This ensures that settlements are fair and reasonable, protecting the interests of employees.
• Attorney Fee Caps: To address concerns about excessive attorney fees in PAGA cases, SB 92 imposes caps on the amount attorneys can recover. This aims to ensure that settlements primarily benefit the employees.
• Mediation Requirements: SB 92 introduces mandatory mediation for certain PAGA claims, encouraging parties to resolve disputes outside of court. Mediation can expedite resolutions and reduce litigation costs.
• Administrative Funding: SB 92 allocates additional resources to LWDA for handling PAGA claims. This aims to improve the efficiency and effectiveness of the PAGA process.
• Elimination of Certain Penalties: A good faith dispute can eliminate certain penalties, including: (1) failure to pay all wages due and owing upon termination or separation (known as “waiting time penalties”); (2) failure to timely pay wages; and (3) wage statement violations that were not willful or intentional.
• Reduction of Certain Penalties: Combined or compounding penalties may be reduced. Courts are now permitted to reduce “stacked” penalties for violations arising from the same payroll error for failure to timely pay wages upon separation, failure to timely pay wages during employment, and other derivative wage statement violations. In a variety of circumstances, employers can rely on good faith arguments to reduce the penalties due for technical wage statement violations.

This bill would-- if at the time of the alleged violation, the person employed one or more employees-- make that person liable for a civil penalty of $100 for each aggrieved employee per pay period, except if certain mitigating factors apply, including that the alleged violation resulted from an isolated, nonrecurring event that did not extend beyond the lesser of 30 consecutive days or 4 consecutive pay periods, in which case the bill would make the civil penalty $25 or $50, except as provided.

This bill would apply its provisions to a civil action brought on or after June 19, 2024, except as specified.

AB 2123 — Disability compensation

What the law currently provides

Existing law establishes, within the state disability insurance program, a family temporary disability insurance program, also known as the California Paid Family Leave program (“PFL”), for the provision of wage replacement benefits to workers who take time off work to care for certain seriously ill family members, to bond with a minor child within one year of birth or placement, or to participate in a qualifying exigency related to the covered active duty or call to covered active duty of certain family members.

Existing law authorizes an employer to require an employee to take up to two weeks of earned but unused vacation before, and as a condition of, the employee’s initial receipt of these benefits during any 12-month period in which the employee is eligible for these benefits.

How the bill changes the law

This bill would make the above employer authorization and related provisions inapplicable to any disability commencing on or after January 1, 2025. In essence, the bill eliminates the employer’s ability to require employees to use accrued vacation leave before accessing the PFL.

AB 2499 — Employment

What the law currently requires

Existing law provided protections to employees from discrimination or retaliation for taking time off for jury duty, court appearances, or to employees who were victims of crime or abuse.

How the bill changes the law

Under AB 2499, the above protections remain in place for employers with 25 or more employees, but the definition of “victims” is broadened to include a victim of a “qualifying act of violence,” which means any of the following, regardless of whether anyone is arrested for, prosecuted for, or convicted of committing any crime:

• Domestic violence
• Sexual assault
• Stalking
• An act, conduct, or pattern of conduct that includes:
  • An individual causes bodily injury or death to another
  • An individual exhibits, draws, brandishes, or uses a firearm or other dangerous weapon, with respect to another
  • An individual uses or makes a reasonably perceived or actual threat of use of force against another to cause physical injury or death.

In addition, this law moves the jury, court, and victim time off provisions from the Labor Code (former Labor Code Sections 230 and 230.1) and recasts them as unlawful employment practices within the California Fair Employment and Housing Act (Government Code Section 12945.8) and, with it, moves the enforcement authority to the California Civil Rights Department.

Under the bill employees are permitted to use vacation, personal leave, paid sick leave, or compensatory time off that is available unless otherwise provided in a collective bargaining agreement.

Under the new law, employers of any size are prohibited from retaliating against or otherwise discriminating against employees who participate in the legal process. Specifically, employers cannot discharge or discriminate against an employee in any manner for any of the following:

1. taking time off to serve as required by law on an inquest jury or trial jury, so long as the employee gives reasonable advance notice to the employer;
2. taking time off to appear in court to comply with a subpoena or other court order as a witness in any judicial proceeding; or
3. taking time off to obtain or attempt to obtain a restraining order or other injunctive relief, to help ensure the health, safety, or welfare of the employee or their child where the employee is a victim of a qualifying act of violence.

Employers are also prohibited from discriminating or retaliating against employees because of the employee’s status or their family member’s status as a victim of a qualifying act of violence.

Finally, under the law employers will be required to provide written notice of their rights established under this bill to new hires, to all employees annually, at any time upon request, and any time the employer becomes newly aware that an employee or an employee’s family member is a victim.

This bill takes effect January 1, 2025.

SB 1137 — Discrimination claims

What the law currently requires

1. Existing law, the Unruh Civil Rights Act, provides that all persons within the jurisdiction of this state are entitled to full and equal accommodations in all business establishments regardless of their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status. Existing law defines “sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status” for these purposes as including a perception that the person has any particular characteristic or characteristics within the listed categories or that the person is associated with a person who has, or is perceived to have, any particular characteristic or characteristics within the listed categories.
2. Existing law, the California Fair Employment and Housing Act (“FEHA”), establishes the Civil Rights Department to enforce civil rights laws with respect to housing and employment. FEHA recognizes and declares to be a civil right the opportunity to seek, obtain, and hold employment and housing without discrimination because of a specified characteristic. FEHA makes certain discriminatory practices based on those characteristics unlawful. FEHA also declares that its purpose is to provide effective remedies that will eliminate these discriminatory practices.
3. FEHA defines terms used in connection with unlawful practices. These include “race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, age, sexual orientation, reproductive health decisionmaking, or veteran or military status,” which includes a perception that the person has any of those characteristics or is associated with a person who has, or is perceived to have, any of those characteristics.

How the bill changes the law

1. This bill would include within Unruh Act’s definition the intersection or any combination of those characteristics.
2. This bill would revise FEHA’s declaration on providing effective remedies to specify that it includes discrimination not just because of one protected trait, but also because of the intersection of two or more protected bases.
3. This bill would include within FEHA’s definition the intersection or any combination of those characteristics. The bill would also state that these provisions are declaratory of existing law.

AB 1815 — Discrimination

What the law currently requires

Existing law, the Unruh Civil Rights Act (which covers businesses that provide goods/services to the public), provides that all persons within the jurisdiction of this state are entitled to full and equal accommodations in all business establishments regardless of their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status.

Existing law, the California Fair Employment and Housing Act (“FEHA”), makes it unlawful to engage in specified discriminatory employment practices based on certain protected characteristics, including race, unless based on a bona fide occupational qualification or applicable security regulations, and prohibits housing discrimination based on specified personal characteristics, including race.

Existing law states the policy of the State of California to afford all persons in public schools, regardless of their disability, gender, gender identity, gender expression, nationality, race or ethnicity, religion, sexual orientation, or any other specified characteristic, equal rights and opportunities in the educational institutions of the state, and to prohibit acts that are contrary to that policy and to provide remedies therefor.

Existing law prohibits discrimination because of a perception that a person has one of those protected characteristics or is associated with a person who has, or is perceived to have, any of those characteristics. FEHA and public school policy define the term race for purposes of those provisions to include traits “historically” associated with race, including, but not limited to, hair texture and protective hairstyles, as defined.

How the bill changes the law

California was the first state, in 2019, to clarify that the definition of race discrimination included hairstyles under the “Create a Respectful and Open Workplace for Natural Hair,” (“CROWN Act”). AB 1815 makes amendments to the CROWN Act including the definition of “race” and “protective hairstyles.” In particular, this bill would remove the term “historically” from the definitions of race, thus defining race to include traits associated with race, including, but not limited to, hair texture and protective hairstyles and would add those definitions for “race” and “protective hairstyle” to the Unruh Civil Rights Act.

SB 1340 — Discrimination

What the law currently requires

The Unruh Civil Rights Act generally prohibits business establishments from discriminating on specified bases. The California Fair Employment and Housing Act (“FEHA”) prohibits discrimination in housing and employment on specified bases.

Existing law establishes the Civil Rights Department (“CRD”) and prescribes its functions, duties, and powers, including to receive, investigate, conciliate, mediate, and prosecute complaints alleging employment discrimination pursuant to specified laws, including the Unruh Civil Rights Act and FEHA.

Existing law specifies that while it is the intention of the Legislature that FEHA occupy the field of regulation of discrimination in employment and housing, FEHA does not limit or restrict the application of the Unruh Civil Rights Act.

How this bill changes the law

This bill mandates that the CRD collaborate with local agencies to prevent and eliminate unlawful practices. Local agencies may now play a more active role in handling discrimination complaints, potentially providing quicker and more localized responses.

Under SB 1340, any city, county, or political subdivision can enforce any state or local law that prohibits discrimination in employment, if all four (4) of the following requirements are satisfied:

• The local enforcement concerns an employment complaint filed with the CRD;
• The local enforcement occurs after the CRD has issued a right-to-sue notice under Government Code section 12965;
• The local enforcement commences before the expiration of time to file a civil action specified in the right-to-sue notice; and
• The local enforcement is pursuant to a local law that is at least as protective as FEHA.

SB 1340 tolls the one (1) year time to file a complaint when a city, county, or other political subdivision commences and enforcement action.

The changes take effect January 1, 2025.

SB 1105 — Paid sick leave

What the law currently requires

Existing law, the Healthy Workplaces, Healthy Families Act of 2014, entitles an employee who works in California for the same employer for 30 or more days within one year from the commencement of employment to paid sick days. Existing law requires an employer to, upon the oral or written request of an employee, provide paid sick days for specified purposes, including the diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member.

Existing law prohibits an employer from denying an employee the right to use accrued sick days, or to discharge, threaten to discharge, demote, suspend, or in any manner discriminate against an employee for using or attempting to use accrued sick days.

Existing law requires the Labor Commissioner to enforce the act, including investigating an alleged violation, and authorizes the Labor Commissioner to order any appropriate relief, as specified, to an employee or other person whose rights under the act were violated.

How the bill changes the law

This bill would also require paid sick days to be provided to agricultural employees who work outside and are entitled to paid sick days to avoid smoke, heat, or flooding conditions created by a local or state emergency.

SB 1105 defines “agricultural employee” as a person employed in any of the following:

• An agricultural occupation, as defined in Wage Order No. 14 of the Industrial Welfare Commission.
• An industry that prepares agricultural products for the market on the farm, as defined in Wage Order No. 13 of the Industrial Welfare Commission.
• An industry that handles products after harvest, as defined in Wage Order No. 8 of the Industrial Welfare Commission.

SB 1100 — Discrimination

What the law currently provides

Existing law, the California Fair Employment and Housing Act (“FEHA”), prohibits various forms of employment and housing discrimination, including various types of discrimination because of national origin, defined to include discrimination on the basis of possessing a driver’s license granted pursuant to existing law that requires the Department of Motor Vehicles to issue an original driver’s license to a person who is unable to submit satisfactory proof that the applicant’s presence in the United States is authorized under federal law. Existing law empowers the Civil Rights Department to investigate and prosecute complaints alleging unlawful practices.

How the bill changes the law

In California, driver’s licenses have increasingly become a condition of employment. The law addresses discrimination against individuals without driver’s licenses by eliminating this requirement as a condition of employment unless certain requirements are met. Under the law, an employer may not include a statement that an applicant must have a driver’s license unless the following conditions are satisfied:

• The employer reasonably expects driving to be one of the job functions of the position.
• The employer reasonably believes that using an alternative form of transportation would not be comparable in travel time or cost to the employer.

An “alternative form of transportation” can include, but is not limited to:

• Ride-hailing services.
• Taxis.
• Carpooling.
• Bicycling.
• Walking.

AB 1976 — Occupational safety & health standards

What the law currently requires

Existing law grants the Division of Occupational Safety and Health (“Division”), which is within the Department of Industrial Relations, jurisdiction over all employment and places of employment, and the power necessary to enforce and administer all occupational health and safety laws and standards. The Occupational Safety and Health Standards Board (“Standards Board”), an independent entity within the department, has the exclusive authority to adopt occupational safety and health standards within the state. Existing law, the California Occupational Safety and Health Act of 1973 (“OSHA”), requires employers to comply with certain safety and health standards, as specified, and charges the division with enforcement of the act.

Existing law requires the division, before December 1, 2025, to submit to the standards board a rulemaking proposal to consider revising certain standards relating to the prevention of heat illness, protection from wildfire smoke, and toilet facilities on construction jobsites. Existing law also requires the standards board to review the proposed changes and consider adopting revised standards on or before December 31, 2025.

Under existing law, a person who, in good faith and not for compensation, renders emergency treatment at the scene of an opioid overdose or suspected opioid overdose by administering an opioid antagonist is not liable for civil damages resulting from an act or omission related to the rendering of the emergency treatment, except if the act or omission constitutes gross negligence or willful or wanton misconduct.

How the bill changes the law

This bill requires the Division, before December 1, 2027, to submit a draft rulemaking proposal to revise specified regulations on first aid materials and emergency medical services to require first aid materials in a workplace to include naloxone hydrochloride or another opioid antagonist approved by the United States Food and Drug Administration to reverse opioid overdose and instructions for using the opioid antagonist. The bill also requires the Division, in drafting the rulemaking proposal, to consider, and provide guidance to employers on, proper storage of the opioid antagonist in accordance with the manufacturer’s instructions. The bill requires the Standards Board to consider for adoption revised standards for the standards described above on or before December 1, 2028.

AB 1888 — Department of Justice

What the law currently requires

Existing law establishes within the Department of Industrial Relations the Division of Labor Standards Enforcement (“Division”), headed by the Labor Commissioner, for the purposes of enforcing labor laws.

How the bill changes the law

This bill addresses a new disturbing phenomenon called “labor trafficking” which is defined in the bill as “depriving or violating the personal liberty of another person with the intent to obtain forced labor or services.” In essence, labor trafficking is a form of modern-day slavery in which individuals perform labor or services through the use of force, fraud, or coercion. Labor trafficking includes situations of debt bondage, forced labor, and involuntary child labor. Labor traffickers use violence, threats, lies, and other forms of coercion to force people to work against their will in many industries. Common types of labor trafficking include people forced to work in homes as domestic servants, farmworkers coerced through violence as they harvest crops, or factory workers held in inhumane conditions with little to no pay.

This bill would establish within the Division a new unit called the Labor Trafficking Unit (“LTU”), which would be required to coordinate with the Criminal Investigation Unit, the Labor Enforcement Task Force, the Department of Justice, the Employment Development Department, other specified task forces, and the Civil Rights Department to combat labor trafficking.

The bill would require the LTU to receive, investigate, and process complaints alleging labor trafficking and take steps to prevent labor trafficking.

The bill would authorize the Department of Industrial Relations to impose a civil penalty for each violation of these provisions. The bill would also authorize the LTU to refer labor trafficking violations to the Civil Rights Department. The bill would require the LTU to coordinate with or refer criminal labor trafficking violations to the Department of Justice for potential criminal prosecutions.

The bill would additionally require the LTU to follow protocols to ensure survivors of labor trafficking are not further victimized by the process of reporting, investigating, or prosecuting labor traffickers and are informed of the services available to them. The bill would further authorize the LTU to coordinate with state, tribal, and local agencies for specified purposes relating to the investigation of labor trafficking.

The bill would require the Division of Occupational Safety and Health, members of the Tax Recovery in the Underground Economy Criminal Enforcement Program investigative teams, members of the Joint Enforcement Strike Force on the Underground Economy, and the Civil Rights Department to notify the LTU when, upon investigating businesses under their purview, there is evidence of labor trafficking.

The bill would also require the LTU, beginning January 1, 2026, and until January 1, 2036, to annually submit a report to the Legislature with specified information relating to labor trafficking complaints, including the number, types, and outcomes of complaints.

The Governor signed three other non-employment-related human trafficking bills the same day: AB 2020, SB 963, and SB 1414.

AB 3234 — Employers

What the law currently requires

Existing law establishes the Division of Labor Standards Enforcement within the Department of Industrial Relations and authorizes the division to enforce the provisions of the Labor Code and all labor laws of the state which are not specifically vested in any other officer, board, or commission.

Existing law regulates the wages, hours, and working conditions of any man, woman, and minor employed in any occupation, trade, or industry, whether compensation is measured by time, piece, or otherwise, except as specified.

How the bill changes the law

The bill imposes more transparency requirements for employers that audit their child labor practices. In particular, this bill would require an employer to post a clear and conspicuous link to a report detailing the findings of its most recent social compliance audit on the internet website for their business, if the employer has voluntarily subjected that business to a social compliance audit.

The bill defines the term “social compliance audit” to mean “a voluntary, nongovernmental inspection or assessment of an employer’s operations or practices to evaluate whether the operations or practices are in compliance with state and federal labor laws, including, but not limited to, wage and hour and health and safety regulations, including those regarding child labor.”

The bills require the report to include, among other things, whether the business does or does not engage in, or support the use of, child labor and a copy of any written policies and procedures the business has regarding child employees.

Child is defined as “a natural person under 18 years of age.” Child Labor means “any work performed by a child in violation of state or federal law.”

There is no requirement under the new law for businesses to conduct a social compliance audit. However, if a business chooses to conduct such an audit, it will be subject to the reporting requirements set forth in AB 3234.—

If businesses choose to conduct a social compliance audit, the report must include:

• The year, month, day, and time that the audit was conducted, and whether the audit was conducted during a day or night shift.
• Whether the business does or does not engage in, or support the use of, child labor.
• A copy of any written policies and procedures the business has regarding child employees.
• Whether the business exposes children to any workplace situations that are hazardous or unsafe to their physical and mental health and development.
• Whether children work within or outside regular school hours, or during night hours, for the business.

The law takes effect on January 1, 2025.

AB 2738 — Labor Code

What the law currently provides

Existing law requires a person or entity that contracts with an entertainment events vendor (“Contracting Entity”) to set up, operate, or tear down a live event at a public events venue, including a state-operated fairground, county fairground, state park, California State University, University of California, or auxiliary organization-run facility that hosts live events (“Public Events Venue”) to require an entertainment events vendor to certify that its employees and employees of its subcontractors have complied with specified training, certification, and workforce requirements, including employees involved in the setting up, operation, or tearing down of a live event and have completed prescribed trainings of the United States Department of Labor’s Occupational Safety and Health Administration.

Existing law requires the Division of Occupational Safety and Health in the Department of Industrial Relations to enforce those provisions by issuing a citation and a notice of civil penalty against an entertainment events vendor, as specified, and to deposit those funds in the Occupational Safety and Health Fund.

How does the bill change the law

AB 2738 strengthens enforcement mechanisms related to workplace safety for stage production workers in the live entertainment industry. This bill was motivated by tragic workplace accidents at major music festivals, such as Coachella and BottleRock, where stage workers died due to unsafe conditions, and aims to prevent such accidents by holding entertainment vendors accountable for ensuring that workers are properly trained and certified.

Specifically, the bill requires the following:

• This bill requires a contract between a Contracting Entity and an entertainment events vendor for services at Public Events Venue to be in writing. The contract must contain a provision that the entertainment events vendor will furnish the Contracting Entity, upon hiring for the live event, with information about its employees and its subcontractors’ employees. The entertainment events vendor must provide the names of its employees and the names of its subcontractors’ employees and what training or certification the employee has completed and the date of certification.
• The bill also subjects the contract to a provision of the California Public Records Act that makes any executed contract for the purchase of goods or services by a state or local agency, including the price and terms of payment, a public record subject to disclosure under that California Public Records Act, as prescribed.
• The bill authorizes the Contracting Entity to use or disclose to third parties the disclosed information about the employees and subcontractors for the purpose of carrying out the Contracting Entity’s duties under the contract but prohibits the use or disclosure of the information for unrelated purposes.
• The bill expanntities subject to penalties for a violation of these provisions to include a Public Events Venue and a Contracting Entity.
• Finally, the bill authorizes a public prosecutor to enforce these provisions pursuant to the alternative enforcement procedures pursuant to Labor Code section 180 et al. to recover all remedies available under the Labor Code, which would go first to workers for unpaid wages, damages, or penalties, and the remainder to the General Fund. It also authorizes recovery of fees and costs to the prevailing plaintiff in such an action.

This law will remain in effect until January 1, 2029, and repealed as of that date, allowing time for the effectiveness of the measures to be assessed. That said, the repeal date shall not apply to any action initiated in court by a public prosecutor prior to January 1, 2029.

AB 1034 — Labor Code Private Attorneys General Act of 2004

What the law currently requires

The Labor Code Private Attorneys General Act of 2004 (“PAGA”) authorizes an aggrieved employee, as defined, to bring a civil action on behalf of that employee, and other current or former employees against whom a violation of the same provision of the Labor Code was committed, to enforce a violation of any provision of the Labor Code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency, as specified, pursuant to certain notice and cure provisions, as prescribed.

PAGA exempts, until January 1, 2028, from its provisions an employee in the construction industry with respect to work performed under a valid collective bargaining agreement (“CBA”) in effect any time before January 1, 2025, that expressly provides for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and for the employee to receive a regular hourly pay rate of not less than 30% more than the state minimum wage rate, and does certain things, including prohibits all of the violations of the Labor Code that would be redressable pursuant to PAGA and provides for a grievance and binding arbitration procedure to redress those violations.

How the bill changes the law

This bill would delete the January 1, 2025, date described above, and would extend the sunset of the exemption described above until January 1, 2038.

To qualify for the exemption, the CBA must prohibit all of the violations of the Labor Code that are redressable pursuant to PAGA and provide for a grievance and binding arbitration process to redress those violations. The CBA must also expressly waive PAGA’s requirements in clear and unambiguous terms and authorize the arbitrator to award any and all remedies available under the Labor Code, with the exception of penalties that would otherwise be awardable to the Labor Workforce Development Agency.

SB 988 — Freelance Worker Protection Act

What the law currently provides

Existing law generally regulates employment and, with certain exceptions, requires a three-part test, commonly known as the “ABC” test, to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission.

How the bill changes the law

The new law aims to give freelancers “basic worker protections” and the right to be paid on time. Thus, the bill establishes the Freelance Worker Protection Act (“Act”) which imposes minimum requirements, commencing January 1, 2025, relating to contracts between a hiring party and a freelance worker, defined as a person who is “hired or retained as a bona fide independent contractor by a hiring party to provide professional services in exchange for an amount equal to or greater than $250.” The Act only applies to freelance-style services listed in Labor Code section 2778(b)(2).

Under the Act, an agreement between a hiring party and a freelance worker must be in writing and include the following:

• Names and addresses of both parties.
• An itemized list of services, their value, and the compensation method.
• Payment due dates or mechanisms for determining them.
• Due dates the freelance worker to report completed services for processing timely payment.

Once a freelance worker has commenced providing services a hiring entity is prohibited from requiring the worker to accept less compensation or provide more services than previously agreed in order to receive timely payment.

The Act also prohibits retaliatory actions by hiring entities for a freelance worker taking any of the following actions:

• Opposing any practice prohibited by the Act
• Participating in proceedings related to the enforcement of the Act
• Seeking to enforce rights under the Act

The Act applies to contracts entered into or renewed on or after January 1, 2025.

AB 224 — Worker status

What the law currently requires

Existing law, as established in the case of Dynamex Operations W. Inc. v. Superior Court (2018) 4 Cal.5th 903 (“Dynamex”), creates a presumption that a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits arising under wage orders issued by the Industrial Welfare Commission. Existing law requires a 3-part test, commonly known as the “ABC” test, to determine if workers are employees or independent contractors for those purposes.

Existing law establishes that, for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation, or business. This test is known as the “ABC” test, as described above. Existing law charges the Labor Commissioner with the enforcement of labor laws, including worker classification.

Existing law exempts specified occupations and business relationships from the application of Dynamex and the provisions described above. These exemptions include a temporary exemption for newspaper distributors working under contract with a newspaper publisher and newspaper carriers until January 1, 2025. Existing law, as part of that temporary exemption, requires every newspaper publisher or distributor that hires or directly contracts with newspaper carriers to submit prescribed information on carrier payroll taxes, wage rates, and wage claims to the Labor and Workforce Development Agency (“LWDA”), on or before March 1, 2022, March 1, 2023, and March 1, 2024.

How the bill changes the law

This bill would extend the operation of that “newspaper exemption” until January 1, 2030 — The bill would require the information on carrier payroll taxes, wage rates, and wage claims to be reported to the LWDA on or before March 1, 2025, March 1, 2026, March 1, 2027, March 1, 2028, and March 1, 2029.

AB 2754 — Employment contracts & agreements

What the law currently requires

(1) Existing law prohibits a person or entity from entering into a contract or agreement for labor or services with specified types of contractors if the person or entity knows or should know that the contract or agreement does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided. Existing law creates a rebuttable presumption affecting the burden of proof that there has been no violation of the above-described prohibition if the contract meets specified requirements, including being in a single document and containing a list of the current local, state, and federal contractor license identification numbers that the independent contractors are required to have under local, state, or federal laws and regulations.

(2) Existing law requires the Division of Labor Standards Enforcement to post on its internet web page information on port drayage motor carriers with unsatisfied final court judgments, tax assessments, or tax liens relating to, among other things, the misclassification of employees as independent contractors with regard to a port drayage commercial driver. Existing law also requires the division to post on its internet web page a list of port drayage motor carriers that are prior offenders with a subsequent judgment finding that the port drayage motor carrier has violated a labor or employment law, among other information. Existing law requires a customer that, as part of its business, engages or uses a port drayage motor carrier that is on the list established by the division to share with the motor carrier or the motor carrier’s successor all civil legal responsibility and civil liability owed to a port drayage driver or to the state for port drayage services obtained after the date the motor carrier appeared on the list.

How the bill changes the law

AB 5, passed in 2019, was a landmark law which prohibited the misclassification of workers, ensuring they receive fair wages and protections as employees. Yet, it is alleged that port drayage motor carriers continue to exploit drivers by classifying them as independent contractors, stripping them of basic rights. AB 2754 seeks to close that loophole. It holds customers who hire port drivers jointly liable for misclassification, ensuring those in the supply chain are held accountable.

(1) This bill applies the above provisions to port drayage motor carriers. The bill includes in the requirements for the rebuttable presumption described above that the contract include a list of the current local, state, and federal motor carrier authority or registration and a copy of any agreement executed by an independent contractor identified pursuant to the provisions described above. The bill defines port drayage motor carriers as “an individual or entity that hires or engages commercial drivers in the port drayage industry.”

(2) This bill, on and after January 1, 2025, and except under specified circumstances, requires a customer that, as part of its business, engages or uses a port drayage motor carrier to share with the motor carrier or their successor all civil legal responsibility and civil liability owed to a port drayage driver or the state arising out of the motor carrier’s misclassification of the driver as an independent contractor, regardless of whether or not the port drayage motor carrier is on the division’s list.

AB 2364 — Property service worker protection

What the law currently requires

Existing law requires every employer of janitors, as defined, to register annually with the Labor Commissioner. The relevant law defines an “employer” as an entity that employs at least one janitor or otherwise engages by contract, subcontract, or franchise agreement for the provision of janitorial services.

Existing law also requires employers of janitors to provide nonsupervisory janitorial employees with biennial, in-person sexual violence and harassment prevention training that the Division of Labor Standards Enforcement develops specifically for janitors. This training in lieu of, and not in addition to, the general requirements for biennial employee harassment prevention training under section 12950.1 of the Government Code. The Department of Industrial Relations must publish on its website a list of approved organizations that provide qualified peer trainers to present the required training to janitorial employees. Existing law requires employers to pay the qualified organization $65 per employee who participates in the training.

How the bill changes the law

According to the bill’s sponsor, this bill seeks to protect janitors in that “[t]he unfortunate and unacceptable truth is that the frequent injury, violence, and blistering disrespect forced on janitors exists only because these hard-working women are immigrants.” This bill requires the employer of janitors, until January 1, 2026, to pay the qualified organization $200 per participant for training sessions having fewer than 10 participants, and $80 per participant for training sessions with 10 or more participants, except as specified. Each year thereafter, the employer would be required to increase the rate of payment, as specified.

In addition to the above, AB 2364 also directs the Department of Industrial Relations to contract with the UCLA Labor Center to conduct a study evaluating opportunities to improve worker safety and safeguard employment rights in the janitorial industry. The report, which the Labor Center shall complete by May 1, 2026, must address production rates, occupational injuries, and wage theft in the janitorial industry, among other subjects.

SB 1321 — Employment training panel

What the law currently provides

1. Existing law establishes the Employment Training Panel (“Panel”) within the Employment Development Department and sets forth its powers and duties with respect to certain employment training programs. Existing law declares the intent of the Legislature that the purpose of provisions relating to the Panel is to establish an employment training program to promote a healthy labor market in a growing, competitive economy and to fund only projects that meet specified criteria, including fostering retention of high-wage, high-skilled jobs in manufacturing. Existing law requires the Panel, in funding projects that meet the above-described criteria, to give funding priority to projects that meet specified goals, including promoting the retention and expansion of the state’s manufacturing workforce.
2. Existing law requires the Panel to solicit proposals for the purpose of providing employment training. Existing law requires the Panel to, among other things, establish minimum standards for the consideration of proposals, including evidence of labor market demand. Existing law prohibits a proposal from being considered or approved that proposes training for employment covered by a collective bargaining agreement unless the signatory labor organization agrees in writing.

How the bill changes the law

1. This bill also includes in the above-described goals, among other things, promoting the hiring, training, and advancement of disadvantaged, marginalized, and underrepresented workers. The bill authorizes projects funded under the above-described provisions to include programs to provide training through apprenticeship programs that are registered with the Division of Apprenticeship Standards.
2. The bill requires the Panel to also include within the above-described minimum standards, among other things, an attestation of compliance with all state and federal labor and health and safety laws. The bill also requires an applicant to include an attestation affirming the applicant does not have a final determination, order, judgment, or award issued against them for violations of the labor law, as specified, and would prohibit a proposal from being considered or approved if an applicant fails to include this attestation. By expanding the crime of perjury, this bill imposes a state-mandated local program. The bill requires the Panel to provide a regularly updated list, at least every 60 days, and make the list available to the public, of all applicants that have submitted applications.

AB 2705 — Labor Commissioner

What the law currently requires

Under existing law, the Labor Commissioner has the power to issue a civil wage and penalty assessment to a contractor or subcontractor for violations of the Labor Code for work performed on a public works project.

How the bill changes the law

This bill clarifies that both contractors and subcontractors are jointly and severally liable for any unpaid wages or penalties, as determined by a final order or judgment. The Labor Commissioner is required to exhaust all reasonable means to collect from the subcontractor before seeking payment from the contractor. Moreover, any money collected is distributed with a priority towards wage claims over penalties. The bill further outlines a contractor’s liability when using out-of-state fabrication facilities.

AB 2696 — Labor-related liabilities

What the law currently requires

Existing law requires, for contracts entered into on or after January 1, 2022, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, to assume, and be liable for, any debt owed to a wage claimant or third party on the wage claimant’s behalf, incurred by a subcontractor at any tier acting under, by, or for the direct contractor for the wage claimant’s performance of labor included in the subject of the contract between the direct contractor and the owner.

Existing law extends, for contracts entered into on or after January 1, 2022, the direct contractor’s liability to penalties, liquidated damages, and interest owed by the subcontractor on account of the performance of the labor, except as provided.

Existing law authorizes a joint labor-management cooperation committee to bring an action in any court of competent jurisdiction against a direct contractor or subcontractor at any tier to enforce liability for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the subcontractor on account of the performance of the labor on a private work, as provided.

How the bill changes the law

This bill additionally authorizes the joint labor-management cooperation committee to bring an action in any court of competent jurisdiction against a direct contractor to enforce liability for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed by the direct contractor – in addition to being owed by the subcontractor - on account of the performance of the labor on private work.

SB 422 — Unemployment compensation

What the law currently requires

Existing law establishes the Employment Development Department (“EDD”), administered by the Director of Employment Development who is vested with certain duties relating to unemployment compensation.

Existing unemployment insurance law requires any employing unit that is a motion picture payroll services company to be treated as an employer of a motion picture production worker, and to file a statement of intent with the EDD. Existing law makes specified violations of unemployment insurance law a misdemeanor.

How the bill changes the law

SB 422 is a union-supported bill that seeks to protect entertainment workers’ use of “loan-out companies” after an audit earlier this year provoked widespread concern about their future. In a victory for the unions, the legislation effectively affirms entertainment workers’ longtime use of these S-Corporations, C-Corporations or LLCs, which “loan out” their services to various other firms for work on entertainment projects.

This bill specifies that a loan-out company is the employer of its employee-owners or members who are engaged to provide services to a motion picture production company or to an allied motion picture services company for purposes of remitting employment taxes and related obligations, as specified.

The bill prohibits a loan-out company or an individual whose services are provided by a loan-out company from being considered an employee of a motion picture payroll services company.

The bill requires a motion picture payroll services company to file a quarterly report with the Director of Employment Development relating to payments made to a loan-out company.