2022 California Legislative Update

At A Glance

• New! California Bereavement Leave
• Extension of California Supplemental Paid Leave
• Paid Leave and California Family Rights Act Amendment
• Extension of Wage Replacement Rates for SDI and PFL
• Changes to California Pay Data Reports
• New! California Pay Scale Requirements
• New! California FAST Act

Introduction

California Governor Gavin Newsom signed several legislative items into law, effective January 1, 2023, unless otherwise noted.

California Bereavement Leave

AB 1949 requires employers with 5 or more employees in California to provide eligible employees with up to 5 days of unpaid bereavement leave for the death of a parent, spouse, child, sibling, grandparent, grandchild, domestic partner, or parent-in-law. Eligible employees must be employed for 30 days prior to the start of leave. Employees can utilize their paid leave, such as accrued vacation days or sick days. The time off must be completed within three months of the date of death and does not need to be taken in consecutive days.

California Supplemental Paid Sick Leave Extension

Supplemental Paid Sick Leave (SPSL) has been extended from 9/30/2022 to 12/31/2022. Employers will not need to provide new or additional SPSL to employees who have already used their 2022 allotment between January 1, 2022 and September 30, 2022.

AB 152 establishes the California Small Business and Nonprofit COVID-19 Relief Grant Program within the Governor’s Office of Business and Economic Development, to assist eligible small businesses or nonprofits that are incurring costs for SPSL. This requirement of the bill will expire on January 1, 2024.

Paid Sick Leave and California Family Rights Act Amendment

AB 1041 allows California employees to use Paid Sick Leave or take leave under the California Family Rights Act (CFRA) to care for a “designated person.” A designated person is defined as any individual related by blood or whose association with the employee is equivalent to a family relationship. An employee can designate this person at the time they request leave. An employer can limit an employee to one person in a 12-month period as the employee’s designated person.

State Disability Insurance and Paid Family Leave Rate Extension

Senate Bill 951 extends increased wage replacement rates for State Disability Insurance (SDI) and Paid Family Leave (PFL) that were set to expire at the end of the year. The legislation extends the date from January 1, 2023 to January 1, 2025.

For claims beginning on or after January 1, 2025, the formulas for determining benefits under both programs are revised to provide an increased wage replacement rate ranging from 70 to 90% based on the individual’s wages earned.

The legislation also eliminates the limitation for the taxable wage ceiling to be four times the maximum weekly benefit amount multiplied by 13 and divided by 55%. This will become effective on January 1, 2024.

California SB 1162 – Salaries and Wages

California Senate Bill 1162 includes provisions that alter the current regulations for the annual California Pay Data Reporting, and a new regulation requiring certain employers to provide pay scale information on job applications.

Pay Data Reporting

California employers will have an extended deadline to file the pay data report.  The new deadline is the second Wednesday in May of each year.

Changes to the pay data reporting requirements:

• Employers cannot submit an EEO-1 in lieu of a Pay Data Report.
• Employes with multiple establishments are no longer required to file a consolidated report.
• Employers will be required to provide the median and mean hourly rate for each combination of race, ethnicity, and sex within each job category.
• This bill would also require a private employer that has 100 or more employees hired through labor contractors to also submit a separate pay data report for those workers to the California Civil Rights Department.
  • This will require employers utilizing a labor contractor retain data from the labor contractor about employee race, ethnicity, sex, job category, and pay information. Labor contractors are required to provide this information to the employers per the legislation.

Additional FAQ and changes to the user guide should be expected from the California Civil Rights Department in the coming months. Paylocity will provide our clients with updated information in our Paylocity Knowledge base.

Pay Scale Disclosure

The legislation amendments Section 432.3 of the California labor code to require that employers disclose pay scale information.

Employers are required to do the following:

• Upon reasonable request, provide the pay scale for a position to an applicant applying for employment.
• Upon request, provide an employee the pay scale for the position in which the employee is currently employed.
• An employer with 15 or more employees must include the pay scale for a position in any job posting.
• Employers must maintain records of a job title and wage rate history for each employee for the duration of the employment plus three years after the end of the employment.
• An employer with 15 or more employees that engages a third party to announce, post, publish, or otherwise make known a job posting shall provide the pay scale to the third party. The third party shall include the pay scale in the job posting.

Employers can update their job application in Paylocity’s Recruiting tool and should review their current compensation practices with Paylocity’s Compensation Management tool. Contact a Paylocity representative for assistance if needed.

California FAST Act

The Fast Food Accountability Recovery Act (FAST Recovery Act) AB 257, was signed by the Governor on September 5, 2022. The bill requires the California DIR to form a Fast Food Council including representatives of state agencies, fast food restaurant employees, fast food restaurant franchisors, and franchisees.

The purpose of the council would be to establish industry minimum standards on wages, working hours, and other working conditions related to the health, safety, and welfare of, and supplying the necessary cost of living to fast food restaurant workers, as well as effecting interagency coordination and prompt agency responses in this regard. Prior to the Fast Food Council issuing new rules or standards, 10,000 or more California fast food restaurant employees must sign a petition supporting its creation.

Employers should continue to monitor for further regulations and requirements specific to Fast Food Restaurants.

For more information on California's wage and payroll tax laws, check out our California Wage and Payroll Tax Facts page.

Next Steps

Additional resources, and any additional information made available, will be ready for Paylocity clients in the Paylocity Knowledge Base, PEAK.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.