New Law in 2024 on Retaliation of Employees

New Law in 2024 on Retaliation of Employees

Under the current law, a retaliation claim has three stages of a shifting burden of proof:

  1. The employee must demonstrate a prima facie case of retaliation;
  2. The employer must state a legitimate, non-retaliatory reason for their act(s); and
  3. The employee must show that the employer’s non-retaliatory reason was a pretext for retaliation.

Now, Senate Bill 497, called the Equal Pay and Anti-Retaliation Protection Act, amends California Labor Code Sections 98.6, 1102.5, and 1197.5 to make it easier for employees to establish a prima facie case of retaliation. The bill was signed by Governor Newsom in early October and is effective January 1, 2024.

SB 497 reinforces existing laws prohibiting employers from discriminating or taking adverse actions against workers engaging in protected conduct, which includes things such as filing complaints, participating in investigations, or exercising their rights under state and federal labor laws.

In addition, the bill increases penalties for employers who retaliate against employees for disclosing information to government agencies or testifying in investigations. Rather than a general civil penalty, employers may now be liable for up to $10,000 per employee for each violation. The penalty will be given to the retaliated employee.

Finally, the new law bolsters the principle of equal pay for substantially similar work regardless of gender or race/ethnicity. It also protects employees from being retaliated against for disclosing their wages, discussing wages with colleagues, or inquiring about another employee's wages.

What is a Rebuttable Presumption?

SB 497 introduces a provision that if an employer takes adverse action against an employee within 90 days of the employee engaging in protected activity, there is a presumption of retaliation. As such, this presumption makes it easier for an employee to establish a prima facie case of retaliation. To establish a prima facie case of retaliation, an employee must demonstrate:

  • The employee engaged in protected activity;
  • The employer engaged in an adverse action against the employee; and
  • There was a causal nexus (connection) between the protected activity and the alleged adverse action.

Adverse employment actions typically include demotion, suspension, or discharge from employment.

Prior to the enactment of the Equal Pay and Anti-Retaliation Act, the law favored employers because employees had more difficulty establishing retaliation, even in the most obvious cases absent direct access to the employer’s records. The law will allow employers to rebut the presumption by providing evidence that their action wasn’t retaliatory.

This rebuttable presumption is found in many parts of California’s labor-related statutes, such as immigration-related retaliation and sick leave-related retaliation; however, it had been missing in the areas of wage-and-hour violations, health and safety, and equal pay.

What Should Employers Do to be Proactive?

Comprehensive Documentation. Employers should update their record-keeping practices to comply with the new requirements. It is critical that employers document employee performance and disciplinary actions.

HR Training. HR departments should conduct training to stress the significance of comprehensive documentation and to effectively communicate the employer's non-retaliation position.

Supervisor Education. Employers should make sure that front-line supervisors appreciate the importance of adhering to company policies and promoting a respectful and compliant work environment.

Compliance with Workplace Laws and Regulations. It’s essential for California employers to proactively comply with labor and employment laws. Moreover, they should make certain that they well document any disciplinary actions and ensure that these actions are based on legitimate reasons. A proactive approach can help lower the potential impact of the new legislation's rebuttable presumption.


To reiterate, SB 497 makes it easier for employees to establish a prima facie case of retaliation. As a result, California employers should review their procedures for employee discipline. This should include an emphasis on documenting employee performance issues, retraining human resources departments, and making certain that managers understand the critical aspects of such documentation.

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