SoloPoint Insights

New California Labor Laws to Look Out For in 2024

As the new year begins, California introduces fresh labor laws that directly impact the compliance efforts of a company. To maintain legal adherence and promote workplace security in 2024, employers are encouraged to take proactive measures to adjust to these changes. Here are the new California labor laws and how employers can prepare:

1. Focus on Noncompetes

  • What is it?

Noncompete agreements are a big concern in industries where top talent is sought after. Different states have different rules, with some states restricting their use for lower-income employees

By the start of 2024, California will enforce stricter noncompete laws. First, any noncompete signed, even if the person works outside California, will be invalid under state law (SB 699). Second, employers can no longer offer specific noncompetes and must give notice to workers that certain prior agreements are now void (AB 1076).

  • Why is it relevant to employers?

SB 699 makes non-competition agreements a civil violation for employers to enter into or enforce such agreements. It specifically prohibits the enforcement of noncompetes deemed unlawful in California, regardless of where the contract was initially signed or employment maintained. It grants employees the right to take legal action, enabling them to sue for injunctive relief, actual damages, or attorney’s fees.

On the other hand, AB 1076 voids noncompete contracts and requires employers to notify affected employees, current and old, who are subject to a non-compete contract that it has been voided. Experts advise employers to do an immediate review of agreements, risk analysis, and potential amendments, emphasizing the importance of protecting trade secrets in notice letters to affected employees.

2. Off-Duty Cannabis Rights

  • What is it?

Starting 1st of January, California has introduced two new bills to enhance the rights of cannabis users. AB 2188, an amendment to the Fair Employment and Housing Act, prevents employment discrimination based on off-duty cannabis use, specifically shielding workers testing positive for non-psychoactive cannabis metabolites. 

Meanwhile, AB 700 prohibits employers from inquiring about an individual’s past cannabis use during the hiring process. Together, these laws aim to protect the rights of cannabis users in the workplace, emphasizing fairness and nondiscrimination.

  • Why is it relevant to employers?

The law ensures that an employer’s right to maintain a drug-free workplace remains intact and still permits pre-employment drug testing. However, any test influencing employment decisions must be scientifically valid and must exclude screening for nonpsychoactive cannabis metabolites. Various tests meeting these criteria are now available for employer access. The law also retains an employer’s ability to acquire and consider an applicant’s past criminal convictions, including those related to cannabis, but only after extending a conditional job offer.

  • Are there any exemptions?

AB 2188 exceptions only apply to those in the building and construction industry, as well as job applicants and employees in roles requiring a federal background investigation or clearance.

3. Background Check Regulations

  • What is it?

Effective 1st of January, The Fair Chance Act, aims to minimize employment barriers for individuals with criminal histories in California. It prohibits employers with five or more employees from inquiring about a candidate’s conviction history before extending a job offer, among other stipulations.

The law applies to public and private employers with five or more employees, including union hiring halls, labor contractors, temporary employment agencies, and client employers. 

Under this law, employers are prohibited from inquiring about a job candidate’s conviction history before extending a job offer. After a job offer, employers can conduct a criminal history check but must perform an individualized assessment considering factors like the nature of the criminal history, the time elapsed since conviction, and the job requirements. The law also restricts questions about conviction history on job applications before a conditional offer and prohibits considering certain details related to arrests or expunged convictions.

4. Minimum Wage Increase

  • What is it?

Effective 1st of January, California’s minimum wage will increase to $16 per hour for all employers, though some cities and counties in the state may have a local minimum wage higher than the statewide rate.

  • Why is it relevant to employers?

Since the state’s minimum salary increased, it affects the eligibility of certain engineers for overtime-exempt status. California employees must earn an annual salary of no less than $66,560 to meet the threshold for exemption. This raises the bar for employees to maintain their exempt status and employers would need to ensure that the salaries of their exempt employees meet the new minimum requirements. Even though some cities have a local minimum wage, only the state minimum wage is used to identify the minimum salary for exempt employees.

  • Are Engineers exempt or non-exempt?

Licensed professionals, including engineers, are classified as exempt employees in California, given that they can exercise independent judgment in their roles. The determining factor is whether an engineer’s salary meets the minimum state requirement. Contract engineers are more likely to be classified as non-exempt employees. Non-exempt employees are typically paid on an hourly basis, are entitled to receive the state minimum wage, and are entitled to overtime pay for hours worked beyond the standard workweek.

With California’s new laws in effect this 2024, deterrents like non-competes, cannabis use, and criminal backgrounds are becoming less critical in employability, requiring employers to reassess their criteria and consider a broader pool of candidates.

With a proven track record of providing high-end engineering staffing solutions, SoloPoint Solutions takes pride in not just meeting, but also guiding our clients through compliance processes seamlessly. If you need help in achieving a more secure workplace this 2024, connect with us today:

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