New 2023 Employment Laws & How Businesses Can Protect Themselves

• Published date: 22 December 2022
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Privacy, Employee Benefits & Compensation, Employee Rights/ Labour Relations, Privacy Protection, Arbitration & Dispute Resolution
• Law Firm: Dykema
• Author: Ms Laura P. Worsinger, Charlotte Garry Carne and Jasmina Aragon

The COVID-19 pandemic changed the workplace as we once knew it. Extensive legislation was enacted placing greater responsibility on employers to deal with the impact of spreading illness in the workplace. Even with the pandemic receding, laws continued to be enacted or extended focused on employee leave and health and safety in the workplace in 2022.

Expansion of the California Family Rights Act, mandatory Paid Sick Leave for COVID-related illness, extended workplace safety protections, and Workers' Compensation coverage for employees based on the rebuttable presumption they contracted COVID-19 in the workplace were just some of the laws enacted to expand and enhance employee benefits. These laws are set to take effect in the coming year.

Also front and center are bills that will expand pay data reporting and pay scale disclosure. Important court decisions also have been issued that are already having a significant impact on employee arbitration and meal and rest periods.

This article is not an exhaustive list of all the new laws and regulations to take effect in 2023, but it does summarize key new laws. Please reach out to any of Dykema's Labor and Employment attorneys to discuss the impact of the new laws on your business and to assess the best approach for complying with these new developments.

Minimum Wage Increase

On January 1, 2023, the minimum wage in California will increase to $15.50 per hour for all employers, regardless of the number of workers employed. Many cities and local governments have also enacted minimum wage ordinances exceeding the state minimum wage.

The salary to qualify for the administrative, executive, and professional exemptions from California's overtime laws will increase to $64,480 on January 1, 2023, for all-sized employers. Local minimum wage requirements do not affect this salary threshold.

The salary to qualify for the computer professional exemption will increase to $112,065.20 annually and $53.80 per hour.

For licensed physicians and surgeons, including dentists, the statutorily specified rate to be deemed exempt from overtime regulations effective January 1, 2023, will be $97.99 per hour. The current hourly rate is $91.07.

Take Away: Every employer's minimum wage rate for non-exempt employees and annual salaries for exempt employees need to be verified periodically to ensure compliance with current federal, state, and local laws. An employer's failure to comply with either minimum wage requirements or salary floors can result in significant liability for back pay as well as statutory penalties to the improperly paid employees. A review of current compensation levels accompanied by targeted increases as necessary is important to avoid that liability.

The Importance of Meal and Rest Break Compliance Continues

This California Supreme Court clarified that meal and rest period premiums must be reported on the employee's wage statement and paid within the statutory deadline for all wages due upon separation of employment in Naranjo v. Spectrum Security Services, Inc. (2022) 13 Cal.5th 93. This case increases exposure for meal period and rest break violations, as the derivative penalties can result in penalties significantly higher than the violations particularly in currently pending and future class actions and PAGA claims.

Take Away: Employers must be even more vigilant about compliance with California's meal period and rest break requirements, as well as ensure accurate wage statements include any meal period and rest break penalty information. Failure to pay employees properly during their employment necessarily results in inaccurate wage statements and a failure to pay all wages when due. Simple, accurate bookkeeping allows employers to avoid these potentially significant statutory penalties.

Mandatory Bereavement Leave Policies

AB 1949, effective January 1...