As you plan your to-dos for the year ahead, our “2025 Top 10” will guide you through the material employment law changes ahead in the Golden State. While we have not included all new California employment laws effective 2025, we’ve highlighted the major changes our clients need to know.
| Key California Change | Employer To-Dos | |
| (1) | Minimum Wage Increase | As of Jan. 1, 2025, the state minimum wage increased to $16.50 per hour for all employers, regardless of employee headcount. Also as of Jan. 1, exempt employees in California must be paid a minimum annual salary of $68,640. | Confirm with HR, payroll, and accounting that all necessary changes have been made. Provide updated Wage Theft Prevention Act notices to any employees impacted by the increased minimum wage. Post the updated Minimum Wage Order and the Wage Order applicable to your workplace. (Posters can be downloaded from the Department of Industrial Relations’ website here.) Be sure to check for higher minimum wages required by state law (e.g., fast food workers and certain health care workers must be paid higher minimum wages) and local ordinances (e.g. in Menlo Park, the minimum wage is now $17.10 and in Mountain View, the minimum wage is now $19.20). As a practical matter, most employees outside of rural areas will be entitled to a higher minimum wage than provided by state law. (See here for a list of City and County minimum wage requirements maintained by UC Berkeley.) |
| (2) | New Posting Requirements Whistleblower Rights Posting: Under AB 2299, and beginning Jan. 1, 2025, employers must “prominently display” a specific notice of a comprehensive list of employee rights and responsibilities under existing whistleblower laws. The notice, provided by the Division of Labor Standards Enforcement (and linked here) must be posted in 14 point or larger type (printing instructions are provided on the notice to meet that requirement). Workers’ Compensation Legal Advice Notice: Beginning Jan. 1, 2025, AB 1870 requires employers to include in workplace notices related to workers’ compensation rights and benefits that (i) an injured employee has the right to consult an attorney, and (ii) in most instances, attorneys’ fees will be paid from the injured worker’s award. | Ensure you are posting the specific “rights and protections” drafted by the Labor Commissioner. Revise any workplace notices related to workers’ compensation rights and benefits to meet AB 1870’s requirements, and take the opportunity to check-in on other workplace notices to ensure they are up-to-date and compliant. |
| (3) | No Longer Allowed to Require Employees to Use Vacation Before Receiving State PFL Benefits | Under AB 2123, and beginning Jan. 1, 2025, employers can no longer require employees to use up to two weeks of accrued vacation before receiving PFL insurance benefits paid by the state. | Update leave and PTO policies (including in the employee handbook) to reflect this change. Train HR, managers and supervisors on the change. |
| (4) | No Longer Allowed to Require a Driver’s License (For Most Positions) | Effective Jan. 1, 2025, SB 1100 prohibits employers from discriminating against individuals without a driver’s license. Employers are prohibited from advertising a position of employment that requires a driver’s license unless there is a reasonable expectation that driving is a function of the position, and the employer reasonably believes an alternative form of transportation would not be comparable in travel time or costs to the employer. An “alternative form of transportation” includes, but is not limited to, using a ride hailing service, using a taxi, carpooling, bicycling, or walking. | Review current job advertisements, postings, applications and other pre-employment documentation to comply with SB 1100. Limit requirements for a driver’s license to positions where driving is a core function of the role. If it is not, consider whether alternative forms of transportation are viable options. If requiring a driver’s license for a position, explain the rationale for the requirement in the job posting to provide transparency. |
| (5) | Expanded Protections for Victims (or Family Members) of Certain Crimes | Beginning Jan. 1, 2025, AB 2499 expands rights for employees who are victims of crime or who have family members who are victims of crime. Among other things, the new law: Broadens the definition of crime victim to include a victim of a “qualifying act of violence”-which includes domestic violence, sexual assault, stalking, and other violent acts; Expands the definition of a “family member” who is a victim of crime-and employees may now choose a “designated person”; Makes both employees who are victims and those who have family members who are victims eligible for reasonable accommodations at work; Adds new prescribed purposes for taking time off, including to participate in safety planning and to relocate; Expands paid sick leave under California’s Healthy Workplace Healthy Families Act to allow employees to use such leave when an employee or an employee’s family member is a victim. Employers can limit leave to 12 weeks for victims, 10 days for employees who have family members who are victims, and 5 days for relocation related to family members who are victims. Employers can require the leave to run concurrently with Family and Medical Leave Act and California Family Rights Act leave, if the employee is eligible for that leave. And employers with 25 or more employees cannot retaliate or take other adverse actions against employees taking time off for prescribed reasons. In addition, the new law recasts existing crime victim protections as unlawful employment practices within the Fair Employment and Housing Act and, thus, within the enforcement authority of the California Civil Rights Department. | Update written policies and handbooks to address the expanded rights for employees who are victims of crime or have family members who are victims of crime. Train HR, managers and supervisors on the change in the law-including providing reasonable accommodations and expanded leave options for affected employees, such as allowing time off for safety planning, relocation, and other prescribed purposes, and ensuring that paid sick leave can be used when an employee or their family member is a victim. |
| (6) | Workplace Violence Restraining Order Law Expanded to Include Harassment | Effective Jan. 1, 2025, SB 428 expands California’s existing workplace violence restraining order law to let employers seek temporary restraining orders on behalf of employees who have suffered harassment (in addition to workplace violence or threats of violence, which are bases for a temporary restraining order under existing law). Under the law, “harassment” is defined as a course of conduct directed at a specific person that serves no legitimate purpose and “seriously alarms, annoys, or harasses the person[.]” The course of conduct must be conduct which would cause a reasonable person to suffer substantial emotional distress, and must actually cause substantial emotional distress. | Update anti-harassment training and policies to ensure employees understand the law’s definition of “harassment,” can recognize behaviors that meet the law’s criteria, know how to report any such behaviors, and understand the importance of reporting. Make sure managers, EROs and HR understand that in the event of a complaint of harassment, the company can explore whether a workplace violence restraining order is an appropriate remedy to address the complaint. |
| (7) | Minimum Requirements Relating to Contracts with a Freelance Worker | Under the “Freelance Worker Protection Act” (SB 988), starting January 1, 2025, employers must heed additional guardrails when using independent contractors: Written contract: A written contract is required when freelancers (independent contractors) perform over $250 of freelance work (as specified in California Labor Code Section 2778(b)(2)) for a hiring entity within a four-month period. The contract must outline the scope of work expected, the rate of pay, and the method of payment. Pay requirements: Hiring entities must pay freelancers by the date specified in the contract, or within 30 days after the completion of services if no date is specified. Hiring entities cannot require independent contractors to accept less than the contract stipulates in exchange for faster payment. Damages: If freelancers are not paid as required, they are entitled to damages equal to double the payment originally specified in their contract, plus costs and attorney’s fees-and the Act provides for a private right of action as well as action by public prosecutors. | Review the freelance-style services contained in Labor Code Section 2778(b)(2) to determine if SB 988 is relevant to the company. If it is, train HR, hiring managers and procurement on SB 988’s obligations. |
| (8) | Combinations of Protected Characteristics | California is the first state to explicitly recognize intersectionality. Effective Jan. 1, 2025, SB 1137 amends anti-discrimination laws pertaining to employment, housing, public accommodations and education to clarify that those laws also prohibit discrimination based on the intersection, or combination, of two or more protected characteristics. Under the new law, when a party claims multiple bases for discrimination or harassment, it may be necessary to determine whether the alleged discrimination or harassment could have occurred due to a combination of factors, or just a single protected characteristic. | Update anti-discrimination and anti-bias training to ensure HR, managers and supervisors understand that the Unruh Civil Rights Act and the FEHA prohibit discrimination on the basis not just of individual protected traits, but also on the basis of the intersectionality (combination) of two or more protected traits. Keep watch on how courts handle claims of intersectional discrimination, and consult with counsel when faced with these (or any discrimination) claims by employees. |
| (9) | Ban on “Captive Audience” Meetings | California is the 10th state to ban so-called captive audience meetings. Effective Jan. 1, 2025, SB 399 prohibits employers from requiring workers to attend meetings on religious or political matters, including anti-unionization meetings. California employers will face a $500-per-employee fine if they make workers sit through these meetings. Employers may continue to hold such meetings — a popular tool to discourage union organizing — as long as attendance is voluntary. | Ensure any meetings on religious or political matters (including anti-unionization meetings) are voluntary, and clearly communicate to employees the right to opt out of such meetings without repercussion. Train HR, managers and supervisors on SB 399’s requirements, noting that the law broadly defines “political matters.” Keep an eye on this trend. On November 13, 2024, the National Labor Relations Board banned captive audience meetings (though we’ll see whether this holds under the new administration), and several other states also passed similar laws banning captive audience meetings (e.g. Hawaii, Illinois, Vermont and Washington). |
| (10) | Social Compliance Audits & Child Labor | Effective Jan. 1, 2025, under AB 3234, any employer that voluntarily subjects its business to a “social compliance audit”-whether the audit is conducted in whole or in part to determine if child labor is involved in the employer’s operations or practices-must post a link on the employer’s website to a report detailing the findings of the audit regarding child labor. Though “social compliance audit” is broadly defined to also include an audit of an employer’s wage and hour and health and safety regulations, only employers who conduct audits to determine if child labor is involved in the employer’s operations or practices are required to post a link to the report of its findings. | Employers who believe they may be required to comply by posting a link to a report should first consult with counsel to walk through several considerations, including (i) whether the audit was “voluntary” by the law’s definition, (ii) whether the audit is privileged (and therefore should not be disclosed), and (iii) how the law interacts with other applicable ESG laws. Keep an eye out for regulatory guidance on AB 3234. |
On the cutting room floor
There were a handful of notable legislative defeats in 2024, including:
- The California minimum wage hike ballot measure (Proposition 32), which would have gradually increased the state minimum wage to $18 by 2026, was voted down (but it was a close vote, with a 50.2% of voters voting “no” and 49.2% voting “yes”).
- AB 2930 would have regulated the use of automated decision tools in employment but the bill died in the Senate. We expect there’s more to come on this topic and we’re keeping a close watch on legislative developments impacting how employers use AI.
- SB 1022 would have brought changes to FEHA administrative timelines, including changes to tolling rules, and would have extended the deadline for the Civil Rights Department Director to file a group or class complaint to seven years from the date of the alleged violation. Governor Newsom vetoed the bill, citing the limitations period, which would have been “significantly longer than the limitations period for similar civil matters, including class action litigation on behalf of employees” as the reason.
- SB 1116, which would have made employees eligible for unemployment benefits after two weeks of absence due to a trade dispute or strike, failed to make it out of committee.
For advice and counsel on implementing changes to comply with any of your new California obligations, please contact your Baker McKenzie employment lawyer.
