California Greets 2017 with New Labor and Employment Laws

State legislature now has a Democratic supermajority

By June Bell January 3, 2017
California Greets 2017 with New Labor and Employment Laws

2017 will bring the United States a new president and, in California, new laws that affect employers and businesses. HR professionals who advise businesses based in California or operating there need to keep pace with changes that include higher minimum wages and legalized recreational marijuana.

Below are some new laws that take effect in the new 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 Gov. Jerry Brown and to pass tax measures without Republican support.

A supermajority can be powerful, said Chris Cobey, an attorney with Littler in San Jose, Calif.

However, all the Democrats in the Senate and almost all of the Democrats in the Assembly (where there is a two-thirds-plus-one majority) would have to be aligned.

"Don't assume all Democrats think the same way, and don't discount internal fissures and splits. The power is more illusory than actual," Cobey added.

Minimum Wage: By 2022, California's mandatory minimum hourly wage will be $15 for businesses with more than 25 employees. Starting Jan. 1, 2017, minimum hourly pay will rise 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.

Some municipalities have taken this matter into their own hands. San Diego's minimum wage will jump to $11.50 per hour, effective Jan. 1. On Oct. 1, Berkeley's rate became $12.53 per hour and will rise to $13.75 an hour on Oct. 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.

[SHRM members-only toolkit: Complying with California Overtime Payment Law]

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 Nov. 9, when the ballot measure passed. Sales, however, are barred until at least Jan. 1, 2018. Smoking in public or in a vehicle, even if the user is a passenger, is forbidden.

HR professionals should review their employee handbooks and policies to make sure the language covers the use of recreational marijuana, said Michael Kalt, a partner at Wilson Turner Kosmo in San Diego and the government affairs director for the California State Council of the Society for Human Resource Management. Companies can also issue what Kalt calls a "statement of reaffirmation," reminding workers that although California has legalized marijuana possession and use, neither is permitted on the job or on company property.

Kalt said he doesn't envision a surge in use-related problems at work but advised companies to consider how they'll handle post-accident testing for marijuana use. If, shortly after an accident, an employee tests positive for alcohol, it's likely he was under its influence. But because traces of marijuana can linger in the body far longer, there's greater potential for false positives, he said.

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.

The bill passed both houses by sizeable margins, a sign that it's likely to be revived in the coming year. "Because Democrats can now get more enacted [due to their supermajority status], there's sometimes a tendency to reach for more," Kalt said, adding that the parental leave bill "is definitely coming back."

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 Dec. 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.

"The Legislature is hypervigilant of any effort by the Trump administration—and I haven't seen any [effort] yet—to roll back any protections for immigrants," Cobey said. He anticipates that the upcoming legislative session, which resumes Jan. 4 after a holiday break, will include several measures to safeguard the state's 2.4 million undocumented residents.

June D. Bell, a regular contributor to SHRM, covers legal issues for a variety of publications. Contact her at


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