As California continues to lead the way in progressive employment legislation, businesses must stay informed of evolving requirements. In 2025, significant updates to employment laws have and will continue to impact industries across the state. This article provides an overview of the key legislative changes, their implications, and practical guidance for compliance.
1. Minimum Wage Increases
California’s minimum wage continues to rise in 2025, with a state minimum of $16.50 per hour, reflecting a 3.18% inflation adjustment. Local jurisdictions may mandate even higher rates. Provisions under SB 525 require higher minimum wages for healthcare workers, with rates reaching up to $25.00 per hour for large health systems by 2027. Employers must evaluate these increases and adjust exempt employee salaries to maintain compliance with overtime exemption thresholds.
2. Expanded Sick Leave and Family Leave Protections
AB 2123 eliminates the requirement for employees to exhaust vacation time before accessing Paid Family Leave (PFL) benefits.
AB 2011 expands reproductive loss leave under the California Family Rights Act (CFRA) mediation program. Employers must ensure updated policies reflect these changes and communicate them effectively to employees.
3. Anti-Discrimination and Harassment Protections
AB 1815 broadens race-based protections under the CROWN Act, emphasizing inclusivity in workplace policies. Amendment to the CROWN Act AB 1815: The definition of “race” has been updated to include traits historically associated with race, such as Hair texture, Protective hairstyles like braids, locs, and twists.
SB 1100 places limitations on License Requirements to prevent discrimination against individuals without driver’s licenses by restricting employers from including unnecessary license requirements in job postings. Under this law, employers may only require a valid driver’s license if: Driving is a legitimate and essential function of the position. The employer reasonably believes that using alternative forms of transportation, such as ride-hailing, taxis, carpooling, or walking, would not be comparable in travel time or cost.
SB 399 California Worker Freedom from Employer Intimidation Act prohibits employers from subjecting employees to “discharge, discrimination, retaliation, or any other adverse action” for declining to attend meetings regarding the employer’s view about religious or political views. Political matters” broadly relate to “elections for political office, political parties, legislation, regulation, and the decision to join or support any political party or labor organization.” This includes topic of union representation.
The Small Employer Family Leave Mediation Program, Effective January 1, 2025, created under the California Fair Employment and Housing Act (FEHA) will now include reproductive loss leave. This applies to disputes between employees and small employers (businesses with 5 to 19 employees) over violations of family care and medical leave laws. Under the previous law, mediated negotiations were only available for disputes involving family care leave, medical leave, and bereavement leave.
4. Workplace Protection, Safety and Notices
AB 1870 Updated Worker’s Comp. Notice Requirements effective January 1, 2025. Workers’ Compensation Notices Must Include: Information on employees’ rights to consult a licensed attorney for advice on workers’ compensation law. Statement that attorneys’ fees may be paid from the injured worker’s award.
AB 2299 Whistleblower Notice, effective January 1, 2025, Requires the state’s Labor Commissioner to develop a model list of employee rights and responsibilities under existing whistleblower laws. The notice must be written in a font larger than 14 point and contain the telephone number of the whistleblower hotline.
AB 2288 Changes to Private Attorney General Act (PAGA) AB 2288 June 19, 2024, introduces important updates for civil actions filed under PAGA after June 19, 2024: Plaintiffs must prove a violation occurred within one year. Penalties are reduced by half for employers with weekly pay schedules. A new penalty structure is established for labor code violations. Employees can file civil actions for labor code violations. Employers can request an early evaluation conference to resolve claims quickly. The definition of perjury is expanded to ensure employers provide truthful information.
SB 92 Changes to Private Attorney General Act improves the PAGA process by making it more efficient and fairer: Expands the definition of perjury to hold employers accountable. Gives courts more control over PAGA settlements. Caps attorney fees, which benefit employees by reducing legal costs. Requires mandatory mediation to encourage dispute resolution. Provides additional resources to the Labor and Workforce Development Agency (LWDA) to manage cases more effectively.
AB 2975 mandates hospitals to implement advanced security mechanisms at key entrances by March 2027, aiming to prevent workplace violence.
AB 1976 introduces requirements for naloxone hydrochloride in first-aid kits, reflecting the state’s commitment to addressing the opioid crisis.
5. The Freelance Worker Protection Act
SB 988 effective January 2025 introduced written contract requirements for freelance engagements exceeding $250. Employers must provide detailed contracts and ensure timely payments, promoting transparency and fairness in independent contractor arrangements.
6. Standardization of Disclosure Forms for Health Service Plans
AB 118, effective January 1, 2025, aims to ensure transparency and uphold integrity by mandating the utilization of standardized terms and definitions as set forth by the Department of Managed Health Care (DMHC) for disclosure forms and evidence coverage. Please visit the DMHC’s website for the official list of standardized terms and definitions.
7. Dental Benefit Plans
AB 1048, effective January 1, 2025, protects dental benefit plan members by prohibiting arbitrary waiting periods and claims denials based on preexisting conditions. The bill also tightens regulations surrounding dental plan premiums, seeking to promote affordability, accountability, and fairness.
Compliance Strategies for Employers
Given these changes, employers must:
- Update employment handbooks, wage posters, and training materials.
- Audit compensation structures and exemption classifications.
- Prepare for enhanced whistleblower protections and expanded leave rights.
- Seek legal counsel for drafting contracts and addressing specific compliance challenges.
Conclusion
California’s legislative landscape underscores the importance of proactive compliance strategies. Employers should navigate these changes carefully to ensure alignment with evolving employment standards. Consulting with an attorney can provide businesses with the tailored guidance needed to comply.
For more information or assistance on how to comply with employment laws, contact Thakur Law Firm, APC, at [email protected] or (714) 772-7400.