In August, CalChamber hosted a members-only webinar discussing employment law updates and trends that have occurred since January 1. During this webinar, employers had many burning questions, providing insights into the compliance topics that continue to trouble employers. Some of the most common questions involved minimum wage and exempt salary thresholds, annual workplace violence prevention requirements, Form I-9 questions and a rare midyear IRS adjustment.
Minimum Wages Take Center Stage
Every mid-year update comes with substantial changes to local minimum wage ordinances as well as the more recently enacted statewide healthcare worker minimum wage. Both see increases on July 1 each year. One of the most popular questions is whether these minimum wage increases impact the exempt salary threshold.
Under California law, most exempt employees must meet a specific job duties test and be paid at least a minimum salary. Generally, this salary must be at least two times the applicable statewide minimum wage. So, although an exempt employee may work in a jurisdiction that has a local minimum wage ordinance, that ordinance will not impact the salary threshold for exempt employees.
However, the healthcare worker minimum wage ordinance does impact the exempt salary threshold as exempt healthcare workers covered by the law must be paid at least two times the statewide minimum wage or one-and-a-half times the applicable healthcare workers minimum wage, whichever is greater.
This leads to another common question about which healthcare workers are even covered by the healthcare worker minimum wage law. This answer is based on the type of facility the employee works at rather than the type of work they’re performing. This is because the law is very broad and defines healthcare workers to include workers who don’t provide patient care at a facility including maintenance workers, landscapers and even gift shop workers. The Department of Labor Standards Enforcement’s frequently asked questions about this law set forth what kind of facilities are covered.
Workplace Violence Prevention Requires Ongoing Attention
Effective July 1, 2024, California’s workplace violence prevention standards set forth a significant new compliance challenge for employers. These standards require employers to create a detailed written workplace violence prevention plan, provide unique training based on that plan and respond appropriately to workplace violence incidents.
But employers often overlook that the standards also require annually reviewing the written plan and annually training employees on the plan. The mid-year update generates a lot of questions for employers on these workplace violence prevention standards including some very common practical questions.
For example, many employers have multiple worksites that either they control or employees are directed to go to work at, and these impact how the plan needs to be crafted. Because these standards require employers to evaluate all potential workplace violence hazards workers may encounter, an employer needs to evaluate each worksite separately for the existence of workplace violence hazards and include those details along with mitigation strategies in its plan.
Another common question centers on what types of incidents fall within “workplace violence” that triggers a mandatory employer response. For example, would friendly horseplay that results in an injury be “workplace violence”? Or would physical conduct that is being investigated under workplace harassment rules also end up being “workplace violence”?
Under the workplace violence prevention standards, “workplace violence” includes, but is not limited to:
- The threat or use of physical force against an employee that results in, or has a high likelihood or resulting in, injury, psychological trauma, or stress, regardless of whether the employee sustains an injury
- An incident involving a threat or use of a firearm or other dangerous weapon, including the use of common objects as weapons, regardless of whether the employee sustains an injury.
This definition is broad and focuses largely on the aggressor’s conduct — not whether an actual injury occurred. In many circumstances, under these standards, incidents that aren’t intended to be “violent” could fall within the definition of “workplace violence.”
Tightening the I-9 Process
Form I-9 compliance remains a key priority for employers, especially after the federal government updated its enforcement priority earlier this year that increases penalty risks for employers. As a result, many formerly curable violations, such as missing birthdates or hire dates on the Form I-9, are no longer curable.
This means that employers need to review and tighten their Form I-9 onboarding process to be as accurate as possible. Common questions included how employers can properly review their process and what to do when errors are discovered.
Periodic Form I-9 audits can be part of an employer’s best practices for Form I-9 compliance. Employers have some discretion with how they perform the audit. For example, while auditing an entire workforce isn’t necessarily required, an audit must be performed in a neutral fashion that doesn’t unfairly discriminate against certain workers based on their immigration status. Examples of potentially discriminatory audits may include only auditing Forms I-9 of workers who have a particular work authorization like a permanent resident card or visa.
If errors are discovered during the audit process, such as missing records or incomplete forms, employers need to correct them immediately no matter how long the employee has worked for the employer. When correcting the errors, the employer should not back-date the correction to when it should have occurred but instead date it based on when the correction actually occurred.
A Rare IRS Update Complicates Expense Reimbursements
California law requires employers to reimburse employees for all necessary expenditures or losses the employee incurs in the performance of their job duties. One of the most common expense reimbursements is for an employee’s use of their personal vehicle. The usual way employers handle this reimbursement is through the IRS-established mileage rate for the deductible costs of operating a motor vehicle.
Usually, this rate is set to take effect starting on January 1 for the year. However, recent increases in fuel prices contributed to the IRS making a mid-year adjustment to the 2026 rate. Previously, the 2026 rate was 72.5 cents per mile, but effective July 1, 2026, it was increased to 76 cents per mile. This means that employers that use the IRS mileage rate for personal vehicle reimbursement need to make a mid-year change to its practices.
The biggest question from this change is whether California employers need to use this rate at all to meet their expense reimbursement obligations under the law. While the law doesn’t require the use of the IRS mileage rate for this purpose, the courts have endorsed this method as an easy-to-use approach.
If an employer chooses not to use this method, it must devise another method to reimburse its employee accounting for more than just the gas used. Vehicle reimbursements must also include considerations for all costs associated with operating a vehicle including depreciation of the value, insurance, repairs, tire wear, other maintenance issues, gas and oil.
CalChamber’s mid-year update was full of information employers need to use to audit and revise processes before waiting for the new year. As summer winds down, employers should continue to keep an eye on this space as the legislative session ends and new laws are enacted.
Matthew J. Roberts, Associate General Counsel, Labor and Employment
CalChamber members can read the 2026 Midyear Employment Law Update white paper. Not a member? Learn how to power your business with a CalChamber membership.
