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Top 5 New Business Laws in California for 2023

Writer's picture: Garrett A. HeckmanGarrett A. Heckman

Updated: Oct 28, 2024

California has a number of new laws going into effect in 2023. This is my ranking of the top new business laws going into effect in 2023. As always, my criteria are: what I thought was interesting, what will impact my clients the most, and how broad the change will be in general. Once again, many of California's changes involve labor law. Unless otherwise stated, these laws went into effect on January 1, 2023.


And I have done the same for Texas here.


5. Contractor's Worker's Compensation Requirements (SB 216)


Current law mandates that roofing contractors (C-9) have to maintain workers' compensation with or without employees. But beginning July 1, 2023, California contractors with C-8 (concrete), C-20 (HVAC), C-22 (asbestos abatement), and D-49 (tree service) licenses will have to obtain and maintain workers’ compensation insurance even if that contractor has no employees. Cal. Bus. & Prof. Code section 7125.


And it doesn't end there. The same is true for California contractors with any license will have to do the same beginning on January 1, 2026. See SB 216, section 2. If you are licensed by the CSLB with one of the license classifications listed above, start talking to your insurance agent as soon as possible. If you have any other license classification, you have a little time to prepare.


4. No Adverse Action during Emergency Conditions (SB 1044)


California law now prohibits employers from taking adverse action against most employees (excluding many first responders) who refuse to report to, or leaving, work during an "emergency condition," or from accessing their mobile devices during such emergency condition. Cal. Lab. Code section 1139. "Emergency condition" is defined as conditions of disaster or peril caused by "natural forces" or "criminal act." Section 1139(a)(1)(A). The definition excludes health pandemics. Section 1139(a)(1)(B). The employee must provide notice to the employer when doing so is feasible. Section 1139(c).


The new law holds the employee to a "reasonable person" standard. Section 1139(b). This means that such person must have a "reasonable belief that the workplace or worksite is unsafe," and specifically that "a reasonable person, under the circumstances known to the employee at the time, would conclude there is a real danger of death or serious injury if that person enters or remains on the premises." Section 1139(b).


3. Affordable Housing and High Road Jobs Act of 2022 (AB 2011)


This one is rather involved, and probably deserves its own post. In short, Gov. Code section 65400 now allows for a streamlined process for multifamily development in commercial areas. For a development to qualify, it must be zoned commercial (with all units being below market rate) or be in a "commercial corridor" (with 15% of units being below market rate).


There are numerous other requirements related to prevailing wages paid to contractors for the development and percentage of units for "very low" and "extremely low" income households. The good news is that there is now a streamlined process, and it will encourage multifamily development. Unfortunately, it's unclear whether the added requirements related to income and prevailing wage rates will result in developers choosing this route for development.


It should be noted that several contractors' organizations opposed AB 2011 until SB 6 (related to skilled workforce requirements) was put forward as well.


2. Salary Ranges in Job Postings (SB 1162)


SB 1162 imposes disclosure requirements on employers regarding compensation. Employers with 15 or more employees must now provide the pay scale for a position in any job posting, and shall provide that pay scale to any third party responsible for the posting. Lab. Code section 432.3.


All employers (regardless of the number of employees) must now: (1) on request provide the pay scale for a position to an applicant applying for employment, (2) on request provide the pay scale for the position in which the employee is currently employed, and (3) maintain payment and job history for each employee for up to three years. Lab. Code section 432.3.


1. Minimum Wage Increase (SB 3, 2015-16 legislative session)


This year, the minimum wage in California increased to $15.50 per hour for all employees, regardless of the size of the business. Cal. Lab. Code section 1182.12.


The change is mandated by SB 3, which went into law in 2016, amending Lab. Code section 1182.12. In short, beginning this year, all employers (no matter how many employees) have to pay $15.50 per hour, and that hourly rate is now tied to inflation.


Conclusion


These are (in my opinion) the highlights. There are a number of others statutes, case law, and regulations affecting businesses in 2023 in California, and they are often industry-specific. It’s a good idea to check in with your business attorney to see if any other changes may affect your business.

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