Focused On Business Law

Attorneys Sara Bradley, Marinda Neumann and Lindsay Nakagawa.

New California business laws taking effect in 2023

On Behalf of | Nov 23, 2022 | Business Law

With the new year approaching, California businesses should be aware of a bevy of new laws taking effect starting on Jan. 1, 2023. We have addressed a few of these in previous articles, but here are brief descriptions of key business-related rules according to the impacted areas.

Pay transparency and equity

Under Senate Bill 1162, businesses with at least 15 employees must include pay ranges in job listings and provide the data to current employees when requested. Businesses must also report their workers’ race, ethnicity, sex, salary, number of hours worked and job category. Companies that fail to comply face penalties of up to $10,000 per violation. Additionally, companies with 100 or more workers must report pay levels for several job categories annually beginning next May. We featured this law in an earlier article you can access here.

Employee privacy

Amendments added to the California Privacy Rights Act (CPRA), impose certain responsibilities upon employers when employers collect personal information about their workers starting Jan. 1, 2023. California voters approved the CPRA in 2020, amending the California Consumer Privacy Act. The amendments strengthened state privacy laws such that companies may only collect and share consumers’ personal in conformance with CPRA. Access our previous article here.

Employee absences

Three new laws will impact employers over time-off requests by workers. Assembly Bill 1041 expands California’s paid sick leave law as well as the Family Rights Act (CFRA), adding the category “designated person” to those permitted to take leave to care for a family member or loved one. Those currently eligible include spouses, registered domestic partners, children, siblings, parents, parents-in-law, grandparents and grandchildren. The CFRA defines a “designated person” as someone related by blood or a person considered as family. The Healthy Workplaces, Healthy Families Act defines a designated person as someone the employee selects when requesting sick leave. Under the law, employers may limit employees to one instance of being a designated person per year.

Under Assembly Bill 1949, companies cannot retaliate or discriminate against workers who take bereavement leave. However, employers can demand that employees provide “proof of death” before granting leave. The law affects all companies with five or more workers as well as public entities. Workers are eligible as long as they have worked at least 30 days for their employer. While most businesses have bereavement policies in place, now is an opportune time to review whether the new rules could affect operations.

Senate Bill 951 grants a one-year extension to a paid family leave plan scheduled to end on Dec. 31, 2023. Also, the law increases wage-replacement rates for state disability and family leave programs from 70% of a worker’s regular wages to 90%, depending on earning levels. That increase takes effect in 2025. Many California businesses can currently access a grant program to help offset costs when a worker is on paid family leave. Eligible businesses can get up to $2,000 under the grant to help pay for temporary or new workers or cross-train existing staffers. The grant program is scheduled to end on May 31, 2024, or whenever the funds are depleted.


Two new laws protect workers over personal and health decisions. Assembly Bill 2188 prohibits discrimination against job applicants or employees who use cannabis away from work. Employers can still conduct drug testing for prospective workers and refuse to hire candidates who test positive for THC – the psychoactive form of cannabis. Many exceptions exist, including federal contractors or those whose workers need security clearance, as marijuana remains illegal at the federal level.

Senate Bill 523, known as the Contraceptive Equity Act of 2022, makes it illegal for companies to target workers based on reproductive health decisions relating to drugs, products, medical services or devices.

Worker safety

Employers are prevented under Senate Bill 1044 from taking disciplinary action or threatening discipline for employees who refuse to show up at a workplace or leave early when they “reasonably’ fear for their safety. Under the law, employers cannot prevent workers from seeking help, such as by taking away their mobile phones. Employees must notify employers when leaving or refusing to show up. Emergencies are defined as criminal actions or natural conditions that put their safety at risk. It also includes any evacuation order at a workplace, employee’s home or their child’s school. First responders, health care workers and disaster-response workers are excluded from the law.

COVID-19 reporting

Assembly Bill 2693 updates and extends a 2020 rule requiring companies to notify workers and others of possible COVID-19 exposure. Previously, the notification had to be in writing within one day of known exposure. Employers were also mandated to report cases to their local health department. That provision will no longer be required when the amended law takes effect. Under the new rules, employers can post notices in the workplace instead of directly notifying workers. The postings must stay up for at least 15 days.

Employee retirement plan

Senate Bill 1126 amends CalSavers, the state’s retirement program for private-sector workers whose employers do not offer retirement benefits. The law directs private businesses with one to four employees and no current retirement plan to install a payroll-deposit retirement savings plan by Dec. 31, 2025. Previously, small businesses with fewer than five employees were exempt. Not affected are self-employed individuals, sole proprietorships and others without employees.

Now is the time to prepare

While we have supplied the basic details on these new laws, it’s crucial to understand everything involved, so your business is in compliance. It’s advisable to consult an experienced attorney to review and adapt your policies and procedures for implementing these rules.