California has a long history of trendsetting and experimentation when it comes to its laws. Some may complain about over-regulation, but the state is often ahead of the curve. For example, when California first legalized marijuana for medical use in 1996, it was considered a drastic move; now cannabis is legal in some form in 36 states and the District of Columbia.
Though there were actually fewer laws passed last year than normal, due largely to the pandemic, there are still several important California laws going into effect in 2021. Here are a few of them.
Minimum Wage Increase
Though the federal minimum wage is still stuck at $7.25 per hour, California is going ahead with its planned increase. Starting January 1, 2021, employers with 26 or more employees must pay at least $14 per hour, while employers with 25 or fewer employees must pay at least $13 per hour. At the start of 2022, the rate will increase to $15 and $14 per hour, respectively, and by 2023 even the smaller employers must pay their California employees at least $15 per hour.
Diversity for Boards of Directors
For publicly held corporations whose principal executive office is located in California, existing state law already requires them to have at least one female director on their board (and possibly more, depending on the size of the board). By the end of 2021, these corporations also must have at least one director from an underrepresented community, meaning an “individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.” Larger boards will be required to include more such directors by the end of 2022.
Extension of Unpaid Parental Leave
California law already mandated 12 weeks of annual unpaid leave to bond with a new child or care for a family member, if an employee who worked at least 1250 hours in the last 12 months for an employer with at least 50 employees. Effective January 2021, this mandate applies to employers with 5 or more employees, greatly extending the right. Unpaid leave means employers must guarantee the same or a comparable position when the employee returns.
Property Tax Transfers
Californians are no strangers to high property taxes as property values have soared over the years. Normally, a home’s assessed value may only increase by 2% annually until there is a change in ownership, at which point the full property value is reassessed (likely at a much higher figure). There are exemptions for property transfers to close family members, which will not trigger a reassessment of the property’s value.
Proposition 19, narrowly passed in November 2020, limits that exemption for family members. Starting in February 2021, the exemption only applies when a family home is transferred to a child or grandchild and the child or grandchild continues to use it as a family home.
If you think these or other new California laws might affect you, contact Hoffman & Forde today for a consultation.