The new year brings a number of new legislative and regulatory issues that brokers need to be aware of in order to guide clients through compliance. On the national front, there are a number of questions around the Consolidated Appropriations Act, with some elements going into effect in 2023, while others have been postponed. The results of the midterm elections have the potential to change control of state and national legislatures, which will impact the types of bills that are introduced and passed.

While it’s important to stay on top of these national issues, there are also five pieces of California-specific workplace legislation that brokers and clients need to be aware of going into the new year.

SB 1162 increases pay transparency

Signed into law by Governor Gavin Newsom in September, SB 1162 goes into effect on Jan. 1, 2023. The legislation amends California’s Pay Transparency Law, expanding reporting requirements around pay scale and requiring employers to make salary ranges for positions available to both employees and applicants.

The goal of the enhanced reporting requirements, which include employee sex, race, and ethnicity, is to better identify pay disparities based on gender and race. By collecting and segmenting data at this level, it will be easier for employers to identify and address pay disparities between specific groups of employees.

For employers that already have a structured pay scale or set of steps to determine compensation for new positions, compliance will be less onerous. For those that do not have guidelines for setting compensation ranges, it’s time to get a process in place.

California Privacy Rights and Enforcement Act (CPRA)

The California Privacy Rights and Enforcement Act (CPRA) amends the California Consumer Privacy Act (CCPA) and will go into effect on Jan. 1, 2023. The CPRA removes some employer exemptions found in the CCPA and introduces new privacy requirements. Specifically, employers must:

  • Notify both applicants and workers (employees and contractors) about the types of personal information that the employer is currently collecting or may collect in the

future, as well as the purpose of collecting and disclosing that information. This includes explaining how the information is being shared and to whom.

  • Detail employees’ rights regarding accessing or restricting the disclosure of certain categories of personal
  • Provide employees a way to correct or delete collected

personal information, subject to statutory exemptions.

  • Allow individual employees to request any personal information that was collected on them during the preceding 12 months.

California Minimum Wage

Effective Jan. 1, 2023, the minimum wage in California increases to $15.50 per hour. This change is effective for all employers. Previously, minimum wage increases applied only to employers of a certain size. With this increase, there are no exceptions.

While this change sets the minimum wage for the state, some cities have their own minimum wage thresholds that are higher than the state’s.

AB 1949 and AB 1041 extend unpaid leave to cover more employee relationships

Under AB 1949, private employers with five or more employees, as well as all public employers, must provide up to five days of unpaid bereavement leave for the death of a family member. Family members are defined as spouses, children, parents, siblings, grandparents, grandchildren, domestic partners, and parents-in-law. Employers may require employees to provide documentation on the need for leave.

Additionally, the leave must be completed within three months from the family member’s death.

Additionally, AB 1041 modifies the California Family Rights Act, which allows employees to take up to 12 weeks of unpaid leave per year for family caregiving. Recognizing that the original Act was limited in its definition of relationships that constitute “family,” the new legislation allows employees to identify a designated person at the time they are requesting leave, without requiring the designated person to be an immediate family member. Employers may limit employees to one designated person in a 12-month period, but eligible relationships may now include aunts, uncles, cousins, friends, and non-dependent children.

AB 2188 Cannabis and Employment Discrimination

While AB 2188 does not go into effect until January 1, 2024, employers should be keeping an eye out for additional guidance throughout the year. AB 2188 makes it unlawful to discriminate against employees and applicants based on off- duty/off-premises cannabis use.

On-the-job and pre-employment drug screenings are still permitted, as long as they do not test for non-psychoactive cannabis metabolites. Additional guidance is needed to determine if and when impairment tests are permitted. Tests for tetrahydrocannabinol (THC), the psychoactive compound found in cannabis can indicate impairment and are still allowed under the law. Employers will need to review and update their current drug testing policies and procedures ahead of 2024.

It’s important to note that AB 2188 does not apply to certain trades or employers, employees, or applicants who are required by law to be tested. (This includes, but is not limited to, tests required by federal contracts, licensing boards, and security clearances.) Employers should carefully review the law and its exemptions to ensure proper compliance.

MISTY BAKER is director of compliance and government affairs, BenefitMall and serves as the 2022- 2023 Legislative Committee Chair, NAHU/NABIP. She is an Affordable Care Act Compliance, Agent and Industry Advocate. specializing in ACA, ERISA, FMLA, COBRA and legislative advocacy for more than 20 years. She is passionate about delivering real-world

and easy to understand solutions for clients, agents and broker concerns in this ever-changing health insurance market.

In 2015, Misty was recognized as one of the Most Influential Women in Employee Benefit Advising, by Employee Benefit Advisor. She served in the local, state and national leadership and advisory programs, and has been awarded with more than 10 awards for legislative efforts, agent advocacy and leadership.