In this article, we introduce some of the new California laws for 2024 that we believe will have the most significant impact on businesses in California. While certainly not an exhaustive guide to all the new laws in California in 2024, These laws have significant implications for businesses operating within the State of California.

We start with a new federal law requiring the reporting of beneficial ownership information for most businesses. While this is a federal and not California law, we include it in this list because it is a major, new compliance requirement with both significant civil and criminal penalties for non-compliance.

There are also a range of new California employment laws for California employers that include new requirements for a workplace violence prevention plan, changes to paid sick leave, and alterations to the existing law for minimum wage in some industries.

Read on for more specifics about these laws, how they impact different business sectors, and what they mean for your business.

Beneficial Ownership Information Reporting Starting January 1, 2024

The new beneficial ownership Information Reporting law, a part of the Corporate Transparency Act and Bank Secrecy Act, comes into effect in 2024. This new law requires most businesses with a presence in the United States to provide comprehensive information about their beneficial owners to the United States Department of Treasury, Financial Crimes Enforcement Network. We have written extensively on this new requirement, so see the links below for more detailed information.

Who is a Beneficial Owner?

A beneficial owner is an individual who directly or indirectly holds substantial control over a company or owns 25% or more of the ownership interest of a company. This also includes individuals such as the board of directors, officers such as CEOs, CFOs, and other top-level executives, as well as any individual who otherwise has significant control over the operations of the company. For more information about beneficial owners, see this linked article titled, “What is Beneficial Ownership Information Reporting” here.

What are the Filing Requirements?

The specific information that must be required can be found in this linked article titled, “What Specific Information Does a Company Need to Report for FinCEN Beneficial Ownership Information Reporting?” here. Filing deadlines are discussed below.

Companies Formed Before January 1, 2024

Companies that were formed before January 1, 2024, are required to submit a report to the Financial Crimes Enforcement Network detailing their beneficial owners which must include specific information about each beneficial owner such as their full legal name, date of birth, current residential or business street address, and an identification number from an acceptable identification document, like a passport or driver’s license.

Companies Formed on or after January 1, 2024

Companies that were formed on or after between January 1, 2024, and December 31, 2024, must comply by not only providing specific information about each beneficial owner such as their full legal name, date of birth, current residential or business street address, and an identification number from an acceptable identification document, like a passport or driver’s license, but also specific information about their company applicants. Company applicants are those persons who assist with the formation of the business, such as the experienced attorneys at San Diego Corporate Law.

When Must Companies Comply with the Filing Requirements?

Companies Formed Before January 1, 2024

Companies that were formed before January 1, 2024, they must comply with the new beneficial ownership information reporting requirements before January 1, 2025.

Companies Formed between January 1, 2024 and December 31, 2024

Companies that were formed between January 1, 2024, and December 31, 2024, must comply with the new beneficial ownership information reporting requirements within ninety (90) days of formation.

Companies Formed on or after January 1, 2025

Companies formed on or after January 1, 2025, must comply with the new beneficial ownership information reporting requirements within thirty (30) days of formation.

Exemptions from Beneficial Ownership Information Reporting

There are twenty-three (23) exemptions from beneficial ownership information reporting, which you can read about in this linked article titled, “Exemptions from Beneficial Ownership Information Reporting” here.

Where are the Required Filings Submitted?

The beneficial ownership information report must be filed with the Financial Crimes Enforcement Network (FinCEN). This report should be submitted through the FinCEN Report E-Filing System. The e-filing system is a free, secure, and convenient method for the submission of reports. FinCEN provides an E-Filing Support Center for businesses experiencing issues during the filing process. For more details on the filing requirements, read this article titled, “How to File Beneficial Ownership Information Report” here.

Why is Beneficial Ownership Information Reporting Important?

What is the Federal Purpose of Beneficial Ownership Information Reporting?

The Corporate Transparency Act and Bank Secrecy Act are intended to increase transparency and combat money laundering, terrorist financing, and other criminal activities that may occur through anonymous ownership of companies.

By requiring businesses to report their beneficial ownership information, these laws are designed to enhance transparency in business operations, curbing (or mildly disrupting) illegal activities such as money laundering, tax evasion, and illicit finance.

Why is this Important for Businesses in California?

While this law imposes an additional reporting burden on businesses, it also offers an opportunity for businesses to review and streamline their internal processes for tracking and documenting ownership information. Companies may need to invest in enhanced systems or seek legal assistance to ensure they comply with the new requirements and avoid potential penalties.

Non-compliance with the beneficial ownership information reporting requirements can result in both civil and criminal penalties.

Civil Penalties

For civil penalties, a company and/or its responsible parties can be fined up to $500 per day for non-compliance with beneficial ownership information reporting requirements.

Criminal Penalties

Non-compliance can also result in criminal penalties. Responsible parties can be fined up to $10,000 and two (2) years imprisonment for failure to comply with beneficial ownership information reporting requirements.

These potential penalties underscore the importance for companies to comply fully with the new reporting requirements. It is critical for businesses to understand these requirements and to establish effective compliance procedures to avoid such civil and criminal penalties.

How to Fix Inaccuracies or Make Changes to a Beneficial Ownership Information Report

If there are any changes to a company’s beneficial ownership information, such as an update in the list of beneficial owners or their information, a new report must be submitted within thirty (30) days of the change. This can be done through the FinCEN Report E-Filing System.

In case of any inaccuracies in the initial report, corrections can also be made using the same system. However, if the error is discovered after the 30-day window, a new report must be submitted with an explanation of the correction.

For more information, see the linked article titled, “How to Fix Inaccuracies or Make Changes to a Beneficial Ownership Information Report” here.

New Employment Laws in 2024 for California Employers

In accordance with a law enacted in 2016, the California minimum wage will increase starting January 1, 2024. This increase, a direct result of the legislation that links minimum wage adjustments to inflation, will raise the California minimum wage to $16 per hour for California employees.

In addition to the new general minimum wage, the following are additional new employment laws for California employers in 2024 in the California Labor Code and other applicable laws.

California SB 525 Minimum Wage Increase for Healthcare Workers by June 1, 2024

The California Senate Bill 525 (SB 525), set to be enacted by June 1, 2024, brings forth a significant increase in the minimum wage for healthcare workers employed at covered healthcare facilities such as hospitals, licensed skilled nursing facilities, and other covered healthcare facilities.

The immediate raise is to $23 per hour, and this increase applies to a wide range of healthcare roles, including nursing assistants, medical technicians, and janitorial workers. With an additional increase of $1 per hour over the following two years, the base wage for these workers is projected to reach $25 per hour.

California SB 476 Food Handler Cards Costs to be Borne by Employers

Starting January 1, 2024, California Senate Bill 476 (SB 476) mandates that employers are required to cover all costs related to obtaining a food handler card for their employees.

Prior to this bill, all expenses connected with the state-mandated certification, including training and testing, were the responsibility of the employee. This new legislation signifies a shift in the burden of costs, aiming to ensure that employees in the food service industry are not financially burdened by the requirements of their occupation.

California SB 616 Changes to Minimum Paid Sick Leave Starting January 1, 2024

California Senate Bill 616 (SB 616) introduces changes to sick time benefits effective from January 1, 2024. Recognizing the need for workers to have adequate leave for health-related concerns, this legislation increases the minimum sick time benefits for all full and part-time workers in California. Previously, employees were entitled to three days of paid sick leave per year. However, under the provisions of SB 616, this has been increased to a minimum of up to five days of paid sick time per year. Importantly, this legislation applies to both hourly and salaried employees, ensuring that all workers can benefit from this enhancement in sick time benefits.

California SB 699 and AB 1076 Prohibition of Non-Compete Contracts Starting January 1, 2024

Starting on January 1, 2024, California Senate Bill 699 (SB 699) intensifies the prohibition of non-compete contracts within the state by declaring them unenforceable in an employment context by the employer, irrespective of whether these non-competition provisions of employment agreements were signed within or outside the state. This new law functionally renders any non-compete clause in an employment contract null and void.

Similarly, Assembly Bill 1076 (AB 1076) which started January 1, 2022, requires employers to inform employees who were hired after January 1, 2022, that any non-compete clauses in their contracts are invalid.

California SB 848 Reproductive Loss Leave Starting January 1, 2024

California Senate Bill 848 (SB 848), effective from January 1, 2024, introduces a new kind of leave aimed at supporting employees who suffer a reproductive loss event. This can include instances such as a failed adoption, miscarriage, stillbirth, or unsuccessful embryo transfer, artificial insemination, or other unsuccessful assisted reproduction. Recognizing the emotional and physical toll these experiences can create, SB 848 mandates employers to provide five days of leave to those affected. This provision applies to all employers, aiming to ensure that individuals have adequate time to cope with their loss without the additional stress of work-related obligations.

California AB 2188 and SB 700: Cannabis Use and Employment Protections Starting January 1, 2024

California Assembly Bill 2188 (AB 2188) and Senate Bill 700 (SB 700), both set to take effect on January 1, 2024, introduce crucial protections for job applicants and employees who use cannabis off the job and away from the workplace.

AB 2188 makes it illegal for an employer to discriminate or penalize an employee based on their use of cannabis during their personal time. This legislation recognizes the increasing acceptance of legal cannabis use while ensuring the rights of employees who choose to partake off the clock are not infringed upon.

Similarly, SB 700 prohibits employers from inquiring about a prospective employee’s cannabis use during the hiring process. This law aims to prevent employment discrimination based on cannabis use, fostering fairness in the recruitment process and making the job market more accessible for cannabis users.

California SB 497 Protection Against Wage Complaint Retaliation Starting January 1, 2024

The California Senate Bill 497 (SB 497), effective from January 1, 2024, introduces critical protections for workers against retaliation by employers. This legislation prohibits employers from retaliating against employees who raise complaints about their wages, discuss wages with their colleagues, or inquire about another worker’s wages. This bill aims to foster a transparent and fair work environment where employees can freely discuss and address wage-related concerns without the fear of retaliation.

California AB 783 Single-User Restroom Signage Requirement Starting January 1, 2024

California Assembly Bill 783 (AB 783) mandates businesses to modify signage on single-user restrooms indicating that these facilities are available for use by all genders. This legislation, effective from January 1, 2024, aims to promote an environment of equality, ensuring that individuals are not restricted to using facilities based on their gender identity. Businesses should review their existing restroom signage and update them as per the guidelines provided in AB 783 to comply with this new requirement.

California AB 1136 Retirement Fund for Mixed-Martial Arts Fighters Starting January 1, 2024

California Assembly Bill 1136 (AB 1136) establishes a retirement fund dedicated to mixed-martial arts fighters, a significant step towards ensuring these athletes’ financial security in their later years. Effective from January 1, 2024, this legislation stipulates that any MMA fighters who have participated in at least 39 rounds in California will be eligible for retirement benefits starting at the age of 50.

California AB 1740 Human Trafficking Awareness Requirement for Child Care Facilities Starting January 1, 2024

California Assembly Bill 1740 (AB 1740) introduces a mandate for childcare facilities and other businesses involved in pediatric care to prominently display information about human trafficking and slavery. Effective starting January 1, 2024, this new legislation seeks to raise awareness and provide critical resources to those who may be coerced into labor. The required information must include resources such as help hotlines, support services, and legal aid available to individuals who have been forced into work.

California SB 553 Workplace Violence Prevention Plan Requirement Starting July 1, 2024

California Senate Bill 553 (SB 553) is a new legislation that requires employers to develop and implement a comprehensive Workplace Violence Prevention Plan. This law, set to take effect starting July 1, 2024, requires employers to develop a plan for workplace violence hazard identification to identify potential risks of workplace violence, outlines strategies for preventing workplace violence incidents, and provides clear protocols for responding to workplace violence when it occurs.

Workplace violence prevention plans plan must be created with input from employees and must be reviewed and updated annually. This legislation aims to promote workplace safety and prevent any potential harm to employees.

In addition to requiring employers to adopt workplace violence prevention plans, California employers must also provide their employees with an education and training program on the prevention of workplace violence as well as ensure that every incident, post-incident response, and workplace violation injury investigation is documented in a violence incident log following the guidelines outlined in the workplace violence prevention plan..

Implementations of the California Consumer Privacy Act Starting January 1, 2024

The California Consumer Privacy Act (CCPA) was enacted on January 1, 2020, and introduced comprehensive data privacy regulations for businesses operating within the State of California.

Starting January 1, 2024, further amendments to the CCPA will take effect, enhancing consumer rights and business obligations under the law.

Proposition 24 California Consumer Privacy Act Effective March 2024

Originally approved in 2020, the California Consumer Privacy Act (CCPA), also known as Proposition 24, will finally take effect in March of 2024. This significant piece of legislation provides Californians with unprecedented control over their personal data that businesses collect.

Under the provisions of CCPA, consumers have the right to know about the personal information that businesses collect about them, the purpose of its collection, and who it is being shared with.

Additionally, consumers can request the deletion of their personal information, opt out of the sale of their personal information, and not be discriminated against for exercising these rights.

California SB 362 The “California Delete Act” Starting January 1, 2024

California Senate Bill 362 (SB 362), also known as “California Delete Act,” provides consumers with enhanced control over their private data. From the beginning of January, this law mandates all data brokers to register with the California Privacy Protection Agency (CPPA). This legislation represents a significant stride towards data privacy, creating a safer digital environment for consumers. By 2026, the CPPA will establish a consumer-accessible mechanism, enabling individuals to instruct all data brokers to delete their personal information. This initiative ensures greater transparency and protection in data handling, safeguarding the consumers’ right to digital privacy.

Navigate New Laws with Ease: San Diego Corporate Law is Here to Guide California Businesses

Navigating new legislation can be a complex process, but you do not have to do it alone. San Diego Corporate Law is here to guide your business through these changes with ease. Our team of experienced lawyers is updated with the latest laws and can help you understand their impacts on your operations.

Whether it is adhering to new restroom signage requirements, implementing a comprehensive Workplace Violence Prevention Plan or complying with data privacy regulations, we are here to ensure your business stays ahead. Contact us today for a consultation and make the transition as smooth as possible. Your legal clarity is our priority.