A Slew of State Laws Take Effect in 2024 That Affect Businesses

Businesses will have to comply with a range of new state laws in 2024, among them more sick days for workers, new privacy protections for consumers, and new requirements for anyone advertising their products as “carbon neutral.”

California lawmakers had notable accomplishments in the past year, especially in the areas of minimum wage and carbon emissions. Meanwhile, various other states moved to protect the privacy rights of their residents and limit the reach of social media apps, despite facing legal challenges from the tech sector.

In the health-care sector, legislators in several states focused particularly on the regulation and affordability of prescription drugs.

Here are some of the significant state laws going into effect in 2024:

Minimum Wage

The minimum wage increased in more than 20 states on Jan. 1. More minimum wage increases are on the way throughout the year. Workers at fast-food chains in California will have to be paid at least $20 an hour April 1, a legislative win for the state’s powerful union movement.

New York’s minimum wage for workers in and near New York City are up to $16 per hour as of Jan. 1. Workers in the rest of the state will get a minimum of $15 per hour.

California is also raising the minimum wage at health-care facilities starting June 1. Large health-care systems and dialysis clinics will have to pay at least $23 an hour. The minimum wage will be set at a lower rate for other health-care facilities, but will still increase from the statewide minimum wage of $16. However, lawmakers may revisit the issue and delay or scale back the minimum wage increase for health care workers. Gov. Gavin Newsom has said changes are in the works as the state faces a substantial budget shortfall.

Leave

Workers in several states will be guaranteed more time off this year. A new California law effective Jan. 1 gives workers in the state five days off each year, instead of three, to recover from illness or care for a sick family member.

Workers in California are also on Jan. 1 allowed up to five days of leave—though not necessarily paid leave—after pregnancy loss, such as a miscarriage.

Minnesota requires employers provide six days of paid sick leave annually under a new program that took effect Jan. 1.

Illinois now requires employers to provide workers with five days of paid time off for any reason.

Non-Compete Agreements

Two new California laws extend the reach of the state’s ban on non-compete agreements in employment contracts. One law effective Jan. 1 extends the ban to employment contracts signed outside the state in response to the increasing national market for talent in many industries and the rise of remote work.

Another new law codifies a 2008 California Supreme Court decision that even narrow non-compete clauses violate the law, with some specific exemptions. While it may not significantly change the existing law, it requires employers to contact by Feb. 14 certain current and former employees hired after the start of 2022. Employers are required to notify employees hired under non-compete agreements that the agreement is void—unless that agreement fell under one of the law’s exemptions.

Pay Transparency

A national trend toward pay transparency continues in Hawaii. A new law that took effect Jan. 1 requires employers with more than 50 workers to include in job postings a salary range “reasonably reflecting the actual expected compensation.” But the law does not apply to internal postings and transfers.

California, Colorado, New York, and Washington have enacted similar laws.

Drug Tests

Washington is limiting the use of drug tests in hiring decisions. Under a new law effective Jan. 1, employers can’t refuse to hire a job candidate based on commonly used drug tests that detect cannabis metabolites, which can be detected for days or weeks after a person uses cannabis.

Employers in California are also now barred from asking job candidates about prior cannabis use or discriminating against employees for cannabis use when not working.

Criminal Records

New York will begin automatically sealing most criminal records under a new law for those who have served their sentences and have stayed out of trouble. Employers in certain industries like law enforcement and child care will still have access to some records while hiring staff. Murder and other serious offenses will not be eligible for sealing. It goes into effect Nov. 16, one year after Gov. Kathy Hochul signed it.

Privacy

Utah is the latest state to roll out consumer privacy protections. The Utah Consumer Privacy Act took effect Dec. 31, 2023, and gives consumers the right to know what personal data is being collected and ask it be deleted.

Florida, Oregon, Texas, and Montana will also implement new consumer privacy laws later in 2024.

Websites featuring adult content will have to start verifying the ages of users from Montana under a new law that took effect Jan. 1.

Social media companies will also have to start verifying the ages of users from Utah starting March 1, if lawsuits don’t stop the policy first.

Right to Repair

California’s new electronics “right to repair” law requires companies to give consumers an easier time to repair devices on their own or with independent repair shops. New York has enacted a similar law, but California’s measure, which goes into effect July 1, is likely to have a nationwide impact given notable device makers like Apple and Google are based in the state.

A right to repair law affecting agricultural equipment takes effect in Colorado Jan. 1.

Minnesota also passed a right to repair law that will go into effect July 1.

ESG

Companies using carbon offsets to market their products as “net zero” or “carbon neutral” will have to start showing their math also under a new California law effective Jan. 1. The measure will require such companies to publish disclosures online detailing their use of offsets. Companies marketing offsets will be required to publish information about their carbon offset projects, too.

A new Illinois law effective Jan. 1 requires investment managers working with public pensions to disclose how they integrate factors such as greenhouse gas emissions and labor practices into their decisions and analyses.

Reporting under California’s new emissions disclosure law won’t be required until 2026. Still, this is the year that companies required to report under the law are likely to get more clarity on how the law will work. The California Air Resources Board faces a Jan. 1, 2025, deadline to craft regulations implementing the law.

Pharmacies

California instituted tighter union-backed staffing rules for pharmacies on Jan. 1. Pharmacies are now required to always have a clerk or pharmacy technician available fully dedicated to pharmacy-related services, rather than assigned to other duties like stocking shelves.

Prescription Drugs

Pharmacy benefit managers operating in Florida faced a Jan. 1 deadline to be approved by the state as an insurance administrator or risk facing hefty fines under a comprehensive law seeking to improve accountability among the entities that manage prescription drug benefits.

Minnesota’s commissioner of commerce faced a Jan. 1 deadline to appoint nine experts to serve on the state’s new Prescription Drug Affordability Board, which will have the authority to set upper limits on what health plans pay for certain drugs.

Michigan’s repeal of a component of a decades-old product liability law will go into effect Feb. 13, removing a provision that Democrats have long argued gave pharmaceutical companies a near-total defense against claims of injuries associated with products approved by the Food and Drug Administration.

Baby Food

Baby-food manufacturers selling products in the California must also start conducting monthly tests measuring levels of lead, mercury, cadmium, and arsenic in their products to comply with a new state law that took effect Jan. 1.

Crypto Kiosks

Crypto kiosks in California are subject to new rules this month. The ATM-like machines, where customers can exchange cash for a digital currency, cannot dispense or accept more than $1,000 per day to customers and must provide receipts. Additional caps on fees are set to come a year later.

A kiosk operator must also begin in January to provide a list of all kiosk locations to the state Department of Financial Protection and Innovation, which has oversight. Consumer advocates say the new law will help prevent bad actors, while kiosk companies say it could substantially hurt their business models.