New Year, New Employment Laws for 2025

Below is a summary of new laws taking effect in 2025. Employment policies should be reviewed and updated to reflect these changes.

Minimum Wage

Effective January 1, 2025, the new California state minimum wage will increase to $16.50 an hour (up from $16 an hour). The new minimum wage applies to all employers, regardless of size.

Given the increase, the minimum salary required for exempt employees will increase to $68,640 per year, or $5,720 monthly. All exempt employees must be paid this minimum salary (in addition to fulfilling the pertinent duties test applicable to the exemption).

Also note that industry specific minimum wages may apply. For example, the minimum wage for certain fast-food workers is currently $20 per hour. The minimum wage for certain healthcare workers is currently $23 per hour. Also note that local regulations may apply to certain employees working within certain localities, thus also making the applicable minimum wage higher than the general California state minimum wage. UC Berkeley maintains a list of these ordinances here: https://laborcenter.berkeley.edu/inventory-of-us-city-and-county-minimum-wage-ordinances/#s-2

Anti-Discrimination Laws (AB 1815 and SB 1137)

AB 1815 clarifies that “race,” as a protected category under the Unruh Civil Rights Act, the California Fair Employment and Housing Act (FEHA), and the Education Code, includes traits associated with race, such as hair texture and protective hairstyles, as defined.

SB 1137 amends the FEHA to specify that “protected characteristics” include a combination of two or more protected traits (“intersectionality”).

Paid Family Leave (AB 2123)

Effective January 1, 2025, California employers can no longer require that employees exhaust two weeks of accrued vacation time before they start receiving Paid Family Leave benefits under the EDD’s paid family leave program.

Sick Leave Expansion (AB 1105 and 2499)

Employees in California will be permitted to use sick leave to assist any family member who is a victim of certain types of violent incidents or threats of violence.

Captive Audience Meetings (AB 399)

The California Worker Freedom from Employer Intimidation Act will ban mandatory captive audience meetings effective January 1, 2025. Pursuant to this new law, employers cannot discharge, discriminate, or retaliate against, or threaten to carry out such actions if an employee refuses to attend any employer-sponsored meeting relating to religious matters, political matters, or matters related to the decision to support or not support a labor organization or union. 

Restrictions Regarding Drivers’ Licenses (SB 1100)

Effective January 1, 2025, California employers are prohibited from including statements in job advertisements, job applications, or other employment materials that an applicant must possess a valid driver’s license unless it is a bona fide occupational qualification. This means that the employer reasonably expects driving to be one of the position’s job functions and reasonably believes that using an alternative form of transportation would not be comparable in travel time or cost to the employer.

Jury, Court, Victim Time Off Provisions (AB 2499)

This law amends provisions for time off related to jury duty, court appearances, and victim-related activities by expanding protections for employees, requiring employers to provide clear notice of these rights, and clarifying that employees may use vacation or paid sick leave when on such leave.

Freelance Worker Protection Act (SB 988)

The Freelance Worker Protection Act imposes minimum requirements on contracts between a hiring party and a freelance worker. Under the new law, “freelance worker” is defined as: A person or organization composed of no more than one person, whether or not incorporated or employing a trade name that is hired or retained as a bona fide independent contractor by the hiring party to provide “professional services” in exchange for an amount equal to or greater than $250. Among other things, the law requires a hiring entity to provide a written contract to the freelance worker, pay a freelance worker the compensation specified by such contract, as provided, and also authorizes an aggrieved freelance worker or a public prosecutor to bring a civil action to enforce these provisions.

Contact us regarding your new 2025 handbook.