New Legislation Affecting California Employers – Part 2

Following the summer recess, the California Legislature enacted numerous state Senate and Assembly bills taking effect immediately, or in 2023. Here are some with a direct impact on California employers. (Info re other new laws, including the Pay Transparency Act, available in Part 1 of this employment legislation series.)

AB 1041: Amending Leave Laws to Include a “Designated Person”

CFRA

For employers that have five or more employees, the California Family Rights Act (CFRA) provides protected time off of up to 12 weeks to a qualified employee who needs leave for their own serious health condition, to care for a family member with a serious health condition, or to bond with a child.

AB 1041 expands the list of family members under CFRA to include a “designated person,” which means “any individual related by blood or whose association with the employee is the equivalent of a family relationship.”

An employee may identify a “designated person” at the time of the leave request, and an employer may limit an employee to one designated person per each 12-month period.

Paid Sick Leave

California’s Healthy Workplaces, Healthy Families Act of 2014 (i.e., California’s paid sick leave law) requires employers to provide employees who have worked 30 or more days with at least 24 hours of paid sick leave annually, to care for themselves or a family member.

Like with CFRA, AB 1041 adds to the definition of “family member” a “designated person,” which for purposes of paid sick leave means “a person identified by the employee at the time the employee requests paid sick days.”

Similar to the CFRA amendment, employers may also limit an employee to one designated person per 12-month period for paid sick days.

Based on these new rules, employers should now revise their Employee Handbook policies and procedures to inform employees about these new entitlements.

AB 1949: Mandated Bereavement Leave

Under AB 1949, employers with five or more employees are now required to provide up to five days of job-protected bereavement leave following the death of an employee’s family member (defined as a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law). Employees are eligible for leave if they have worked for their employer at least 30 days prior to the start of the leave.

Bereavement leave does not need to be consecutive and must be completed within three months of the date of the death of the employee’s family member.

Bereavement Policies

Employers may request that employees provide documentation of the death of the family member and must keep such documentation as confidential. “Documentation” can include a death certificate; a published obituary; or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution, or government agency.

If an employer already has a bereavement policy of at least five days, then this new leave law states that time off shall be taken pursuant to the existing bereavement leave policy of the employer. If an existing policy provides for less than five days, then this new law creates a new minimum standard for additional unpaid leave.

If there is no existing paid bereavement leave policy, the time off can be unpaid. However, AB 1949 authorizes an employee to substitute the unpaid time off with vacation, personal leave, accrued paid sick leave, or other available compensatory time off.

Similar to other leave laws, AB 1949 also prohibits employers from retaliating or discriminating against employees who exercise their right to bereavement leave or participate in an investigation regarding the right to take bereavement leave.

Whenever the legislature introduces a new leave law like this one, employers should update their Employee Handbooks.

AB 257: Protections for Fast Food Employees

The full name of this new law is the Fast Food Accountability and Standards Recovery Act, a/k/a FAST Recovery Act. AB 257 aims to better fast-food employees’ terms and conditions of employment.

The bill establishes a new “Fast Food Council” within the State of California Department of Industrial Relations, tasked with establishing “minimum standards on wages, working hours, and other working conditions related to the health, safety, and welfare of, and supplying the necessary cost of proper living to, fast food restaurant workers…” One of the stated goals of this bill is “to ensure and effect interagency coordination and prompt agency responses.”

The Council will have 10 members:

• One representative from the Department of Industrial Relations.
• Two representatives of fast food restaurant franchisors.
• Two representatives of fast food restaurant franchisees.
• Two representatives of fast food restaurant employees.
• Two representatives of advocates for fast food restaurant employees.
• One representative from the Governor’s Office of Business and Economic Development.

Except for the advocates’ representatives, all representatives will be appointed by the Governor. The Speaker of the Assembly and the Senate Rules Committee will each appoint one representative of an advocate for fast food restaurant employees.

Prior to the creation of the Council, the Director of Industrial Relations must receive a petition approving the creation of the Council, signed by at least 10,000 California fast food restaurant employees.

Covered and Excluded Establishments 

AB 257 defines “Fast food restaurant” as any establishment in the state that is part of a fast food chain and primarily provides food or beverages in the following manner:

(1) For immediate consumption either on or off the premises.

(2) To customers who order or select items and pay before eating.

(3) With items prepared in advance, including items that may be prepared in bulk and kept hot, or with items prepared or heated quickly.

(4) With limited or no table service. Table service does not include orders placed by a customer on an electronic device.

A “fast food chain” means “a set of restaurants consisting of 100 or more establishments nationally that share a common brand, or that are characterized by standardized options for décor, marketing, packaging, products, and services.”

AB 257 excludes:

(1) bakeries that produce bread for sale on their premises, provided the bread produced is offered as a stand-alone menu item, and not part of another menu item, and

(2) restaurants located within “grocery establishments” – provided the individuals working at the restaurant are the grocery establishment’s employees.   

Council’s Authority and Local Councils

In part, the Council will have the authority to create standards regarding wages, working conditions, and training to “protect and ensure the welfare, including the physical well-being and security of fast food restaurant workers…”

The Council will also be able to amend or repeal other existing rules and regulations, as necessary to carry out its duties. However, there are limits on the minimum wage the Council may adopt — up to $22.00/hour for 2023, and a yearly increase equal to the lesser of, rounded to the nearest $0.10:

• 3.5 percent or
• the rate of change per the Consumer Price Index.  

Notably, AB 257 permits local jurisdictions to establish more protective local standards.

AB 257 mandates the Council to review fast food restaurant health, safety, and employment standards at least once every three years and hold meetings that are open to the public every six months. The location of the meetings will rotate among major metropolitan areas throughout California.

AB 257 also permits large counties and cities (with a population of greater than 200,000) to establish their own Local Fast Food Councils which will be composed of at least one representative who is either a fast food restaurant franchisor or a fast food restaurant franchisee; and at least one representative who is a fast food restaurant employee; and a majority of representatives from local employment, health, and safety agencies.

Local councils will operate independently from the State created Council.

Sorting Through Employment Legislation

Compliance with all employment laws, whether they are federal, state, or local can become confusing for California employers, as laws often contradict each other. When in doubt, employers should contact legal counsel for clarification.

Employers are also advised to update Employee Handbooks to reflect many of these legislative changes.

This is Part 2 of a series regarding legislative updates affecting employers. Click Part 3 re California labor law changes for 2023 to move to the next installment.

Sue M. Bendavid and Tal Burnovski Yeyni are employment defense attorneys.