Recent Developments in California: New Laws Impacting Security Deposits and Workplace Safety

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New Security Deposit Law

As of July 1, 2024, California has introduced a significant legislative change affecting security deposits for rental properties. Assembly Bill 12 (AB 12), authored by Assemblyman Matt Haney and signed into law by Governor Gavin Newsom in October 2023, caps security deposits at one month’s rent for both furnished and unfurnished residential units. This is a notable departure from the previous regulations, which permitted landlords to charge up to two months' rent for unfurnished units and three months' rent for furnished units.

The rationale behind this new law is to alleviate the financial strain on tenants, particularly those in lower-income brackets or with limited savings. By limiting the upfront costs associated with securing rental housing, the law aims to make housing more accessible. This legislative shift aligns with broader efforts within the state to address housing affordability and tenant protection.

However, AB 12 does provide an exemption for small landlords. Property owners with no more than two residential rental properties, collectively comprising no more than four rental units, can still collect up to two months' rent as a security deposit. To qualify for this exemption, the property must be held by the owner as a natural person, a limited liability company with all members being natural persons, or a family trust. This exception does not apply when the tenant is a military service member, reflecting the law’s nuanced approach to different tenant circumstances.

Whitney Prout, executive vice president of legal affairs for the California Apartment Association, emphasized the importance of landlords understanding and complying with these updated regulations. To facilitate this, the California Apartment Association (CAA) has updated its background paper on security deposits and plans to host a webinar titled “Security Deposits Ins and Outs” to educate landlords about the new requirements.

Groundbreaking Workplace Safety Legislation

In another landmark move, California has established the first comprehensive workplace violence prevention safety standards applicable to various industries. Effective from July 1, 2024, this legislation mandates nearly all employers in the state to adopt rigorous measures to curb workplace violence. These new standards are an extension of the healthcare-specific measures introduced by Cal/OSHA in 2016, broadening their scope to ensure a safer working environment across all sectors.

Under the new law, employers are required to integrate a workplace violence prevention plan into their existing Injury and Illness Prevention Programs. This plan must include the appointment of individuals responsible for oversight, processes for employee engagement in the plan’s formulation and execution, coordination methods for integration with other employers, and protocols for reporting and responding to incidents of workplace violence. Employers must also establish communication strategies to inform employees about reporting procedures and available assistance, and develop post-incident response and investigation procedures. Regular review and updates of the plan, incorporating employee feedback, are mandatory, as is the provision of initial and annual training related to the plan.

This legislation represents a significant shift from the traditional regulatory approach managed by Cal/OSHA, reflecting an urgent response to growing concerns over workplace safety. The legislative route was chosen to expedite the implementation of protective measures, bypassing the slower, more consultative rulemaking process typical of regulatory bodies. This swift action underscores California’s proactive stance on workplace safety, setting a high standard for other states to emulate.

Furthermore, the new law amends the California Code of Civil Procedure section 527.8, expanding the scope for employers to seek restraining orders to include cases of harassment. This expansion, effective from January 1, 2025, alongside the empowerment of collective bargaining representatives to petition for restraining orders, marks a more inclusive approach to protecting employees from workplace violence.

Implications and Future Outlook

These legislative changes reflect California's ongoing commitment to addressing critical social issues, from housing affordability to workplace safety. By enacting AB 12, the state aims to reduce the financial barriers to renting, thereby making housing more accessible to a broader demographic. Meanwhile, the comprehensive workplace violence prevention standards demonstrate California’s leadership in ensuring safe and respectful working environments.

For landlords, compliance with the new security deposit regulations will require adjustments to leasing practices and financial planning. Small landlords, in particular, will need to familiarize themselves with the specific conditions that allow for exemptions. The upcoming CAA webinar and updated resources will be invaluable for landlords navigating these changes.

Employers, on the other hand, must undertake a thorough review and enhancement of their existing safety policies to comply with the new workplace violence prevention standards. This includes active collaboration with employees and representatives to develop and implement effective violence prevention plans. The legislative shift towards a more immediate and comprehensive approach to workplace safety sets a precedent that could influence future regulations nationwide.

Overall, these legislative developments signify a progressive step towards greater equity and safety within California, underscoring the state’s role as a pioneer in social policy and regulatory innovation. As these laws take effect, their impact will be closely watched, potentially serving as models for other states grappling with similar issues.