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New Laws to Impact California Businesses in 2021

Now that we’re almost at the end of what has turned out to be quite a tumultuous year, California business owners should be aware of changes that will take effect after January 1, 2021. Many of these are business-centered bills that were signed by Governor Gavin Newsom, who recently issued a strict lockdown across the Golden State, while others are revisions or addenda that strengthen old laws.

Read on for the full list.

Declaration of positive test results

The effects of COVID-19 are expected to continue well into next year. Considering this, AB 685 requires companies to inform all employees within 24 hours should a co-worker test positive. Failure to do so results in a fine of $10,000.

This law also allows the California Department of Public Health to shut down a business if an outbreak occurs. As an added precaution, it requires companies to establish disinfecting and sterilization guidelines within the workplace.

Increase in minimum wage

The wage progression law signed in 2015 has an effect every year, beginning on January 1, 2017. The wage currently stands at $13.00 per hour and will increase by $0.50 in 2021. However, the Department of Industrial Relations recommends a floor price of $14.00 per hour for employees in California.

Changes to employee leaves

There are three laws related to this. SB 1383 extends family leave to up to 12 weeks and will cover smaller companies with five or more employees.

AB 2017 gives employees the autonomy to decide whether caring for a family member counts as “sick leave.”

Finally, AB 2992 states that workers who are victims of crimes should be allowed to take time off without repercussions to accomplish the necessary judicial processes. They are to be granted at most 12 weeks to resolve legal disputes.

Provision of legal representation to workers

SB 1384 grants the labor commissioner the power to provide workers legal representation. This is given that the worker cannot afford to pay legal fees.

Extension of filing of complaints

AB 1947 extends the timeframe in which employees may file complaints – from six months to 12 months.

Employer Information Report requirement

Note that this law takes effect on March 31, 2021. SB 973 requires companies with more than a 100 employees to file what’s known as an Employer Information Report. This document should contain the pay data of all employees, as it was passed to determine whether minorities are being discriminated against in terms of salary. In the report, California Globe details that employers must break down pay data by race, ethnicity, and sex across different job categories — from service workers and operatives, all the way up to executive or senior level managers.

These laws seem to be a step forward in pushing for employees’ rights. However, they’ve also received backlash as they fail to consider smaller companies and how these laws will affect their businesses.Still, these changes are unlikely to deter new entrepreneurs from doing business in the Golden State, as it comes with many benefits. For example, there are numerous upsides to operating an LLC in California. It’s easy to build and maintain despite these new laws. Plus, owners have better tax options. Lastly, with the state providing more employee support, job-searchers are likely to flock there for a better work environment, providing more opportunities to hire.

Check out the top headlines at The Storify News Times to learn more about the latest business news.


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