California has comprehensive employment laws and regulations, many of which diverge from federal law quite notably. As a result, manufacturers operating in California must stay current on all relevant laws and regulations to remain in compliance. Failure to do so can lead to fees and penalties steep enough to put a small manufacturer out of business.

In this blog, we’ll highlight some recent changes to California’s labor laws that impact the manufacturing industry and offer insights for how California manufacturers can stay in compliance.

Overview of California Employment Law and Regulatory Changes

To start, let’s review some of the most critical updates to the California Labor Code:

Wage and Hour Laws

On January 1, 2023, Senate Bill 3 increased the minimum wage in California to $15.50 an hour for all employees, regardless of their company’s size. Some cities and counties in California have even higher minimum wages than that. It is important that companies understand the minimum wage requirement in the counties they do business.

Meanwhile, Senate Bill 1162 requires private employers with over 100 employees to submit annual pay data reports to the Civil Rights Department. These reports must break down companies’ median and mean hourly employee rates by race, ethnicity, and sex. 

SB 1162 also requires employers with 15 or more employees to feature pay ranges on all of their job listings and provide employees with pay scales for their positions upon request.

Health and Safety Regulations

Here’s an overview of California’s newly expanded health and safety regulations:

  • Assembly Bill 1041: AB 1041 expands the categories of people whom employees are allowed to take leave from work to care for. A designated individual is defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship.”
  • Assembly Bill 1949: AB 1949 allows employees who have worked for a covered employer for at least 30 days to have up to five days of bereavement leave for a qualifying family member. Qualifying family members include spouses, domestic partners, children, parents, parents-in-law, siblings, grandparents, and grandchildren. Some employers are even expanding the qualifying definition as 'a loved one'.
  • Senate Bill 1044: SB 1044 prohibits employers from taking adverse actions against employees who refuse to come to work or stay at work during emergency conditions. Emergency conditions can include perilous natural forces or criminal activity. Health pandemics are notably excluded. This bill applies to employees affected by evacuation orders at their workplace, worksite, home, or children’s school.

Anti-Discrimination and Harassment Laws

California’s Civil Rights Department enforces strict anti-discrimination and harassment laws that protect various people. Protections apply to the following characteristics:

  • Age (40 and above)
  • Ancestry
  • Color
  • Disability (physical, developmental, mental health/psychiatric, HIV and AIDS)
  • Gender expression
  • Gender identity
  • Genetic information
  • Marital status
  • Medical conditions (genetic characteristics, cancer, or a record or history of cancer)
  • Military status
  • National origin (included language restrictions and possession of a driver’s license issued to undocumented immigrants)
  • Race (includes hair texture and hairstyles)
  • Religion (included religious dress and grooming practices)
  • Reproductive health decision-making
  • Sex/Gender (includes pregnancy, childbirth, breastfeeding and/or related medical conditions)
  • Sexual orientation

Assembly Bill 2068 now requires employers to post certain Cal/OSHA information in English as well as in the top seven non-English languages in California to support diverse workplaces.

Starting on January 1, 2024, Assembly Bill 2188 will protect California workers and job applicants from being discriminated against for their off-site, off-duty cannabis use. Employers will not be allowed to make verbal inquiries about an individual's cannabis use. However, it doesn’t apply to all workers — employees in the building and construction trades and those subject to mandatory federal background checks are exempt.

Immigration Laws

Since California has a high immigrant population, the state has enacted certain protections for immigrant workers. For instance, California employers are not allowed to look into applicants’ or employees’ immigration status unless they’re doing so to comply with federal immigration law. 

California’s Immigrant Worker Protection Act (AB 450) also prohibits employers from providing “voluntary consent” to allow immigration enforcement agents to enter any “nonpublic areas of a place of labor.” In addition, it requires employers to give their employees notice of any upcoming immigration inspections. In addition, all employers must follow state and federal guideline regarding I-9 documentation.

Specific Impact of Employment Law and Regulatory Changes on Manufacturers in CA

Now that we’ve discussed the employment laws impacting all industries, let’s take a look at a few laws that are especially relevant for California manufacturers:

  • Employee Classification: Determining the difference between employees and independent contractors has been controversial for the past few decades. On September 4, 2020, Assembly Bill 2257 went into effect. This bill clarifies the ABC test that’s used to make the employee classification distinction, as well as the types of workers who are exempt from it.
  • Overtime and Meal Break Requirements: California employees are entitled to overtime pay and adequate breaks. Overtime pay kicks in after eight hours within a single workday and 40 hours in a given workweek. California employees working overtime earn one and a half times their regular rate. After 12 hours of work in a workday, employees get entitled to double their regular rate. California workers are also permitted an uninterrupted, unpaid meal break of 30 minutes if they work more than five hours daily. For workdays lasting over 12 hours, an additional 30-minute meal break is required.
  • Warehouse Quotas: Assembly Bill 701 protects warehouse workers from quotas that violate California labor laws. It applies to warehouse employers who directly or indirectly employ 100 or more employees at a single warehouse or 1,000 employees in warehouses across California.

Strategies for Maintaining Compliance in CA

Since new bills are passed yearly, California employers must keep up with current labor laws and regulations. They also need comprehensive compliance programs to ensure they fulfill all of their legal obligations.

California manufacturers have a lot to keep track of, from expanded health and safety regulations to the recently updated employee classifications. 

Fortunately, CMTC’s HR solutions are tailored specifically for small and medium-sized manufacturers in California. This means that each of our experts is well-versed in California’s complex and ever-evolving hiring and employment laws, and can help ensure your organization is practicing California-specific manufacturing compliance. 

Reach out today to find out what CMTC can do for your organization!

Manufacturers Guide to Human Resources

About the Author

Jeri Summer

Jeri Summer is Senior Manager of HR, Administration, & Recruitment at CMTC. She has over 25 years of strategic design and functional implementation experience in Recruitment, Human Resources, and HR Business Process Outsourcing services. As part of a global Human Resources consulting firm, she provided leadership to a team of 500 global recruiting professionals that produced 100,000 hires annually. Prior to joining CMTC, Jeri held senior leadership positions at Aon-Hewitt and The Right Thing/ADP, providing direction to the national Human Resources Outsourcing teams in recruiting services and human capital management.

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