There are employment law changes this year that small businesses should be aware of. To make sure that the updates are in effect, revise your policies and practices as needed to comply. Please reach out to me at (email) if you’d like us help you keep your business compliant.

Minimum Wage Requirements

There are several changes to minimum wage requirements for California employers as of January 1, 2022. The minimum wage for non-exempt, hourly employees increased to $14.00 per hour for employers with 25 or fewer employees, and $15.00 per hour for employers with at least 26 employees. Remember to check the local minimum wages for your area for both exempt and non-exempt. Santa Clara increased its minimum wage to $16.40 per hour and San Jose raised it to $16.20 per hour. Other Bay Area cities have also seen increases this year.

The minimum salary for most exempt employees also increased. The annual minimum is now $58,240 for employers with 25 or fewer employees and $62,400 for employers with at least 26 employees. There have also been changes to minimum wage for certain software professionals and hourly paid surgeons.

Employers should annually review their practices for handling final paychecks, employee reimbursements and PTO payout practices. Currently, an employer who wrongfully and intentionally withholds wages can be convicted of a misdemeanor. Assembly Bill 1003 increases the potential punishment to a felony of grand theft if the employer intentional failed to pay wages in an amount greater than $950 to one employee or $2,350 total to two or more employees within a 12-month period. An employer is deemed to have acted “intentionally” when it deprives and employees of any wages with knowledge that the wages are due. Note that the Bill also defines contractors as employees and late payments to contractors as failure to pay wages.

California Family Rights Act (CFRA)

Starting last year, businesses with 5 or more employees are subject to the leave requirements of CFRA, which allows employees to take leave to care for an ill or injured family member. For 2022, the list of eligible family members includes parents-in-law. This change should be reflected in the CFRA policy within the employee handbook, as well as the protocol for leaves.

We also suggest that employers include leave of absence training for supervisory staff since failing to provide timely information or apply the correct leave type can create liability for non-compliance.

Changes to COVID-19 & Vaccine Requirements

Local public health departments and Cal/OSHA have followed the Center for Disease Control’s lead on changing the number of days an employee may be excluded from the workplace after either testing positive for COVID-19 or being exposed as a close contact to someone with COVID-19.

Exclusion periods are based on symptoms and whether the employee is vaccinated or not. One way to help you keep up with this requirement is to know your employees’ vaccination status. If you haven’t done so already, ask your employees about their vaccination status and keep a private record of their information.

Employers are also still required to create, post and update a COVID Prevention Plan (CPP), defined by Cal/OSHA. Employers with 10 or more employees are subject to posting requirements for the OSHA 300 form and must also include COVID-19 absences. Employers should update their CPPs to account for new exclusion periods and new notification requirements.

Employers with at least 100 employees are no longer required to ensure their employees are vaccinated against COVID-19 or undergo weekly testing. However, employers may still implement such a requirement, at their discretion. If you chose to do so, ensure that you have a comprehensive vaccination policy in place.

Policies and Agreements

There are more updates for 2022, including changes for arbitration and settlement agreements, document retention requirements, and expense reimbursements for remote workers.  California is now enforcement the requirement that arbitration agreements, signed after January 2021, be entered into voluntarily by employees. Such agreements can no longer be a condition of employment. Employers should also existing arbitration agreements to remove any phrasing indicating that is a condition of employment. A review of internal practices for paying arbitration fees is also warranted as there are new penalties and ramification for employers that fail to pay arbitration fees timely.

Arbitration Agreements

On September 15, 2021, the Ninth Circuit Court of Appeals issued a ruling regarding AB 51, the 2019 California law prohibiting employers from requiring employees or applicants to sign arbitration agreements forgoing their right to sue under state employment laws as a condition of employment.

Under AB 51, employees can voluntarily consent to submit employment disputes to arbitration, but the voluntary nature of the option and the fact that employees are free to reject it must be stated clearly. If you have an arbitration agreement with your current employees that states that it is mandatory as a term of employment, it is now null and void.

You can still have arbitration agreements with employees but, the agreement must be optional and cannot be a term of employment.

Settlement Agreements

Settlement agreements cannot include non-disclosure Agreements (NDAs) that cover claims of sexual harassment or discrimination. Senate Bill 331 extends this prohibition to any type of harassment, discrimination or retaliation. It also does not allow for non-disparagement agreements, required as a condition of employment, and severance agreement provisions that prevent employees from disclosing information about unlawful acts in the workplace.

Record Retention

As part of your annual review, it’s important to also review your record retention practices. Senate Bill 807, effective January 1, 2022, extends the current requirement for retaining employee personnel records from two years to four years.

If you need more help, schedule a free 60-minute consultation to discuss how Small Business HR Services can help you navigate these changes and answer your other HR questions.