Are You Ready? California Updates for 2017

A few months ago, we at DecisionHR posted a blog post, Don’t Get Burned by the California Sun.  The article discussed an array of regulatory and legislative changes in the employee and compensation management industries.

Since that time, a lot of activity and changes have occurred. California has enacted new laws that affect employers and businesses in different ways. We need to keep pace with changes that include higher minimum wages and legalized recreational marijuana.

Below are some new laws that take effect this year or that have recently taken effect, as well as a few initiatives that might see a revival in 2017 due to the Democrats’ supermajority status in the state Senate and Assembly. A supermajority enables Democrats to override a veto by Democratic Governor Jerry Brown and to pass tax measures without Republican support.

Minimum Wage

By 2022, California’s mandatory minimum hourly wage will be $15 for businesses with more than 25 employees. Starting January 1, 2017, minimum hourly pay rose from $10 to $10.50, an extra $20 per week for full-time employees.

There’s no state-mandated increase in hourly wages in 2017 for businesses that employ 25 or fewer workers. In 2018, however, they must pay workers $10.50 per hour.

Additionally, some municipalities have taken this matter into their own hands. San Diego’s minimum wage jumped to $11.50 per hour, effective January 1. On October 1, 2016 Berkeley’s rate became $12.53 per hour and will rise to $13.75 an hour on October 1, 2017. Los Angeles set a minimum hourly rate of $10.50 last July 1. It will become $12 per hour on July 1, 2017.

Marijuana Legalization

In November, Golden State voters overwhelmingly approved Proposition 64, which legalizes the recreational use of small amounts of marijuana. The California Marijuana Legalization Initiative permits residents to grow up to six plants for personal use and allows people over age 21 to possess up to one ounce of marijuana. Voters in 2009 approved the legalization of medical marijuana.

The possession and use of marijuana became legal November 9, 2016, when the ballot measure passed. Sales, however, are barred until at least January 1, 2018. Smoking in public or in a vehicle, even if the user is a passenger, is forbidden. Reminding workers that although California has legalized marijuana possession and use, neither is permitted on the job or on company property.

Parental Leave

Gov. Brown in September vetoed legislation that would have granted six weeks of unpaid leave to new parents at companies with more than 20 employees. California law provides up to 12 weeks of protected leave only for workers at businesses with at least 50 workers.

Extra Hours for Part-Time Employees

San Jose voters in November approved Measure E, which takes effect March 8, 2017. It will require businesses with at least 36 employees to offer more hours to their part-time employees before hiring additional workers, provided the extra hours wouldn’t trigger overtime pay.

That initiative inspired the Opportunity to Work Act (A.B. 5), introduced December, 5 as the 2017 legislative session began. The act contains language similar to San Jose’s measure but sets the bar for employers at a minimum of 10 employees.

It also bans retaliation against workers who exercise their rights under the would-be law by filing a complaint with the state or filing a lawsuit. Retaliation includes “reporting or threatening to report the actual or suspected citizenship or immigration status of an employee, former employee or family member” to any government agency.

We pride ourselves on staying in the forefront, continuously monitoring and regulating industry changes and their possible impact on your business.

Contact your HR Business Partner for information on these changes or any questions you may have.

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