Gov. Gavin Newsom has signed into law numerous measures that will boost employee rights in California effective Jan. 1. Among them: SB 616 will increase the number of paid sick days employers must provide. SB 848 will give employees job-protected bereavement leave for reproductive loss. SB 699 will strengthen California’s restrictions on noncompete employment provisions. SB 497 will require an employer to prove termination or other punishment of an employee within 90 days of the employee engaging in protected activity was not unlawful retaliation.
More Paid Sick Leave (SB 616): All California employees will get five days or 40 hours of paid sick leave a year, up from three days or 24 hours now. As under existing law, an employee will accrue one hour of sick leave for every 30 hours worked, beginning with the first day of employment.
An employer must allow an employee to carry over 40 hours of unused sick leave into the following year unless the employer credits the employee with the full 40 hours of leave “at the beginning of each year of employment, calendar year, or 12-month period.”
An employer may delay the employee’s use of accrued sick leave until the 90th day of employment. And employers may limit an employee to using 40 hours or five days of paid sick leave per year.
What employers should do: Employers should update their paid sick leave policies unless those policies are at least as generous as those in the new law.
Bereavement Leave for Reproductive Loss (SB 848): Employers with five or more employees will have to allow employees who have been employed for at least 30 days to take up to five days of unpaid bereavement leave following a reproductive loss. “Reproductive loss” means “a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.”
The leave may be taken on nonconsecutive days, but generally must be used within three months of the loss. An employee that suffers more than one reproductive loss within a 12-month period may take up to 20 days of leave within that period. As with other job-protected bereavement leave, reproductive loss leave need not be paid, but an employer must allow the employee to use any accrued and unused paid leave for this purpose.
What employers should do: Covered employers should update their bereavement leave policies to include leave for reproductive loss.
Tougher Prohibition on Noncompete Provisions (SB 699): California Business & Professions Code section 16600 invalidates any agreement that restrains anyone from engaging in a lawful trade or business, except under limited circumstances. The new measure reinforces this prohibition by: (1) making an agreement that is invalid under section 16600 unenforceable “regardless of where and when the contract was signed;” (2) prohibiting an employer or former employer from attempting to enforce an invalid noncompete provision; (3) prohibiting an employer from including an invalid noncompete provision in an employment contract; (4) making it a civil violation, for which an employee may sue an employer, to enter into or attempt to enforce an invalid noncompete agreement.
California employers, however, may continue to prohibit their employees from competing against them while on their payroll. California courts long have held that, during employment, an employer may require its employees’ “undivided loyalty.”
The new law also does not categorically bar training repayment agreements. In 2016, the California court of appeal ruled that an employment contract requiring a departing employee to repay “the fronted costs of a voluntarily undertaken educational program, the benefits of which transcend any specific employment and are readily transportable, is not a restraint on employment.”
What employers should do: California employers should remove noncompete clauses from employee handbooks and contracts. Out-of-state employers should exclude California-based employees from noncompete provisions and not attempt to enforce such provisions against employees wherever based who move to California to work for a competitor.
Bolstered Whistleblower Protection (SB 497): Where an employee has made a legally protected complaint about his or her wages or other employer practice, and is terminated or otherwise subject to adverse action within 90 days of such activity, the employee will be rebuttably presumed to have been punished because of his or her protected activity. If the employee later sues, the employer will have to prove the employee was punished for a legitimate non-retaliatory reason.
What an employer should do: Before terminating an employee who recently has lodged a colorable complaint of unlawful activity, an employer should ensure the justification is clear, well-documented, and unconnected to a protected activity or status — a sound general approach to terminations.
Dan Eaton is a partner with the San Diego law firm of Seltzer Caplan McMahon Vitek where his practice focuses on defending and advising employers. He also is an instructor at the San Diego State University Fowler College of Business where he teaches classes in business ethics and employment law. He may be reached at eaton@scmv.com.
