For California employers, the constantly evolving legal landscape is a persistent challenge and even the most diligent and conscientious employer can be caught
off guard. The end of the year is particularly challenging, as California employers have to grapple with a wave of new laws signed by the governor, effective January 1, usually without any interpretive guidance. 2023 is certainly no exception, especially considering the economic headwinds California employers may be facing. As we move toward 2023, California employers should be especially mindful of the following:
PAY TRANSPARENCY REQUIREMENTS
SB 1162 significantly expands pay reporting and disclosure requirements for most California employers. Effective Jan. 1, 2023, California employers must disclose pay ranges in job post- ings and make pay scale information available to current employees upon reasonable request. The law also extends the California Labor Code’s retention rules to require employers
to maintain records of the job title and wage history for each employee for the duration of
the employee’s employment and for three years following separation. SB 1162 also revises and expands California’s pay data reporting require- ments for employers with 100 or more employ- ees. California employers must now report the “median and mean hourly rate within each job category, for each combination or race, ethnic- ity, and sex in the report” in addition to report- ing the number of employees by race, ethnicity and sex in 10 different job categories and by the occupational survey bands established by the U.S. Bureau of Labor Statistics. California employers with 100 or more employees must also submit separate pay data reports regarding employees hired through labor contractors within the prior calendar year. Lastly, SB 1162 changed the pay data report due date to the second Wednesday of May, annually.
CCPA AND CPRA COMPLIANCE
Starting January 1, 2023, the California Privacy Rights Act (CPRA) will apply to employees, job applicants, and business-to-business contacts (provided that the employer is subject to the CPRA). The CPRA will provide workers with the right to access, delete, opt out of the sale and sharing of, and limit the use of
their sensitive personal information, among other rights. Although some of these rights overlap with those mandated by other California laws, including under the Labor Code, the CPRA does not carve out situations in which employers already provide access or deletion rights under other laws. Instead, the CPRA will be an additional layer of compliance for employers that are subject to its minimum revenue or data-processing thresholds. Employers that are subject to the CPRA will also need to make comprehensive changes to their applicant and employee privacy notices and publish the updated notices by January 1, 2023.
Additionally, the California Consumer Privacy Act (CCPA) exemptions for employee and business-to-business personal information (PI) will not be extended. This means that on January 1, 2023, full consumer rights will apply to the PI of workforce members as well as to their PI collected on behalf of their employer in the context of “providing or receiving
a product or service to or from” a business. California businesses should carefully assess the differences between the rights afforded to workplace members under the CCPA, including exemptions, and those provided under the California Labor Code. Most California employers should have many of the processes required under the CCPA in place.
CHANGES TO THE FAIR EMPLOYMENT AND HOUSING ACT (FEHA)
SB 523, among other things, amends the FEHA to make it unlawful to discriminate against an employee or job applicant based on their “reproductive health decision-making,” which includes, but is not limited to, a decision to use or access a particular drug, device, product or medical service for reproductive health.
AB 2188 prohibits employers from discriminating against an employee or job applicant based on the person’s use of cannabis while not working and outside the business premises. While AB 2188 is effective January 1, 2024, California employers should review their drug testing and drug-free workplace policies and develop a plan for compliance.
Shareef Farag is a partner at BakerHostetler. The firm helps clients navigate California law and mitigate risk – all with an eye toward the bottom line.
