As a business owner or entrepreneur in California, it is essential to stay up-to-date with the latest laws and regulations that may affect your operations. There have been several new laws passed in California in recent times that you need to know about to keep your business compliant with the state’s regulations.
Here is a comprehensive guide to the new California business laws you need to know:
1. The California Consumer Privacy Act (CCPA)
The CCPA, which was enacted in 2018 and became effective on January 1, 2020, regulates data privacy for California consumers. The CCPA applies to businesses that:
– Have an annual gross revenue of at least $25 million
– Buy, receive, or sell the personal data of 50,000 or more consumers, households, or devices
– Generate a majority of their annual revenue from selling consumers’ personal information
The law grants consumers the right to know what personal information businesses collect about them, the right to request that such information be deleted, and the right to opt-out of the sale of their personal information. Businesses must also provide consumers with a clear notice of their data collection practices, including what personal information they collect, how they collect it, and why they collect it.
2. Assembly Bill (AB) 5 – Worker Classification
Assembly Bill 5, which took effect on January 1, 2020, changed how workers are classified by businesses in California. Previously, many independent contractors were misclassified as independent contractors instead of employees. AB 5 codifies the “ABC test,” which presumes that workers are employees unless the hiring entity can prove otherwise. The law applies to all industries except for specific professions, such as licensed insurance agents, healthcare professionals, and licensed lawyers.
Businesses that hire independent contractors must now determine whether the workers are employees or independent contractors using a three-pronged test. The hiring entity must prove that:
– The worker is free from the control and direction of the hiring entity concerning the performance of the work.
– The worker performs work that is outside the usual course of the hiring entity’s business.
– The worker is customarily engaged in an independently established trade, occupation, or business.
3. Family and Medical Leave
The new California business law, Senate Bill 1383, expands the state’s Family Rights Act (CFRA) to apply to employers with five or more employees. The act previously applied only to employers with 50 or more employees. Under the CFRA, eligible employees can take up to 12 weeks of leave in a 12-month period for reasons such as the birth of a child, care for a seriously ill family member, and the employee’s medical condition.
4. Minimum Wage Increase
As of January 2021, California’s minimum wage increased to $14 per hour for businesses with 26 or more employees, while businesses with 25 or fewer employees must pay a minimum wage of $13 per hour. The state is set to increase the minimum wage incrementally to reach $15 per hour by 2023.
In conclusion, being aware of new California business laws is essential for entrepreneurs and business owners. The CCPA, AB 5, SB 1383, and the minimum wage increase are crucial new laws that affect businesses of all sizes. Keep these laws in mind when running your business to stay compliant with California regulations.
