This month’s newsletter highlights several important legal and regulatory developments that HR leaders, executives, and compliance teams need to watch closely.
First, a recent California Court of Appeal decision in Hirdman v. Charter Communications provided clarity on how employers may calculate paid sick leave for commissioned outside sales employees. The court confirmed that employers can use base hourly pay — excluding commissions — so long as the same method is applied to other forms of paid leave. This ruling offers employers much-needed consistency in managing leave benefits for commission-based staff. Read the full story.
Another major update is California’s announcement that the statewide minimum wage will increase to $16.90 per hour beginning Jan. 1. This change, driven by the state’s annual inflation-based adjustment process, will apply to all employers regardless of size. This increase reflects rising consumer prices and will impact payroll planning, especially for businesses with large hourly workforces.
Artificial intelligence also took center stage in June, when the California Civil Rights Council approved new rules extending the Fair Employment and Housing Act (FEHA) to cover AI-driven employment practices. Beginning in October, employers using automated decision systems (ADS) or AI-powered tools in hiring and other employment decisions will face heightened compliance obligations. These regulations are expected not only to influence California businesses but also to pave the way for similar protections in other states and at the federal level.
Compliance challenges were underscored in July when the California State Auditor’s Office released a report detailing significant deficiencies within the California Division of Occupational Safety and Health. The audit revealed weaknesses in enforcement processes and staffing, raising concerns about the agency’s ability to safeguard the nearly 20 million workers under its jurisdiction. Employers should anticipate increased scrutiny and potential reforms aimed at strengthening workplace safety enforcement.
Finally, the University of California faced legal challenges to its policy prohibiting the employment of undocumented students lacking federal work authorization. Petitioners argued that the policy violated FEHA and related regulations, which classify it as an “unlawful practice” to reject candidates based on immigration status absent clear federal requirements. The case serves as a reminder that even well-intentioned risk-avoidance policies can trigger state anti-discrimination claims if they disproportionately impact protected groups.
Together, these developments illustrate the rapidly evolving landscape of California employment law. Organizations must stay proactive in their compliance efforts to navigate the changing terrain.
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