Five 2023 Legislative Proposals Negatively Impacting California Employers

In this episode of The Workplace podcast, CalChamber employment law expert Matthew Roberts and CalChamber Policy Advocate Ashley Hoffman discuss five troubling employment law legislative proposals being discussed in the California Legislature this year: SB 809, SB 616, SB 723, SB 627 and AB 1356.

Background Checks

Discussed in a previous podcastSB 809 (Smallwood-Cuevas; D-Los Angeles), which generally banned criminal history checks and created a new Fair Credit Reporting Act and California-equivalent notice requirements, was softened a little bit, Roberts says.

Hoffman explains that recent amendments reverted back to the existing framework, where an employer is able to conduct a background check after making a conditional offer. Nevertheless, the bill still contains several rules that concern the CalChamber.

For example, the penalties the bill imposes are pretty high, Hoffman says. In conjunction with the densely technical notice requirements, the CalChamber is concerned that employers will be exposed to steep penalties and maybe a class action lawsuit if an employer misses even one thing.

Another concern is that the bill allows an applicant to dispute a background check report and not have to submit any evidence to support their claim, and the employer cannot hold this lack of evidence against the applicant.

“All an applicant would have to do is say that the report is inaccurate. And then there’s really nothing we could do from there,” she says.

Paid Sick Leave

Under current law, employers must provide at least three paid sick leave days per year, Hoffman explains. SB 616 (Gonzalez; D-Long Beach) would increase these minimum days to seven, which is concerning not only for small businesses, but even for larger businesses as well. This is because even if an employer already offers more than three days of sick leave, under SB 616, employers will not be able to ask for documentation for those seven days.

Roberts adds that the issue of documentation is a concern shared by many employers, as employers often want a doctor’s note to be submitted to ensure that the leave is not being abused.

Right to Rehire

Generally, in California, outside of a collective bargaining context, employees are not entitled to be rehired if they are laid off, Roberts explains. During the COVID-19 pandemic, there was some change to this via SB 93, which required employers in the hospitality and airport industries to provide a rehire opportunity to those who lost their job because of lockdowns and closures. Now, two legislative proposals are aiming to impose more rules.

SB 723 (Durazo; D-Los Angeles) would extend the sunset date in SB 93 and would apply the right to be rehired to anyone in these industries who has been laid off for any non-disciplinary reason and does not have to be related to COVID-19, Hoffman says.

“The larger impact we see is this is actually chipping away at at-will employment by having really overly prescriptive hiring rules, only allowing us to consider seniority and not consider any other aspect of the person’s application,” she says.

Some of the employers that would be covered by SB 723 include hotels and businesses located at an airport, such as gift shops, restaurants, etc.

The second of these legislative proposals establishing a right to rehire is SB 627 (Smallwood-Cuevas; D-Los Angeles). This bill applies to any chain employer that has at least 100 establishments nationwide. If an employer has a location in California and has another location within 25 miles, that location must hire anyone from the closed location in order of seniority for a job they are qualified for, Hoffman explains.

So, if a store down the street closes, and a supervisory position opens at a nearby store, the nearby store must hire someone from the store that closed and won’t be able to promote anyone from their current store, Hoffman says.

“Again, we see this as chipping away at at-will employment, but then also really acting to the detriment of some of the employees in the store that didn’t close and barring them from promotional opportunities, potentially for an entire year,” she says.


The last of the legislative proposals discussed on the podcast is AB 1356 (Haney; D-San Francisco), which significantly expands the Worker Adjustment and Retraining Notification (WARN) Act. The WARN Act requires employers that conduct mass layoffs of 50 or more employees, or relocate or close an entire facility, to provide a 60-day notice to both employees and the California Employment Development Department (EDD).

Under AB 1356, employers will have to provide a 90-day notice and would extend WARN Act rules to employees of labor contractors, Hoffman says. Additionally, the bill changes the definition of “covered establishment” so that instead of applying to single locations with 75 or more employees, it now covers any business that employs 75 or more employees between all of their locations.

Roberts points out that if employers fail to provide notice, there are reinstatement remedies and backpay remedies.

“The damages for a WARN Act violation are huge, which is why the broadening expansion of this kind of bill is something that causes concern,” Roberts says.

The California Chamber of Commerce is the largest broad-based business advocate to government in California, working at the state and federal levels for policies to strengthen California. Not a member? Learn about the benefits of membership.

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