New Year, New Workplace Laws: What Employers Need to Know in 2025
As 2025 begins, California employers face a number of significant legal updates affecting wage and hour rules, hiring practices, leaves of absence, workplace safety, and more. Below is a summary of key legislative and regulatory changes that require immediate attention and potential policy revisions.
Wage and Hour Updates
Minimum Wage: The California minimum wage increases to $16.50 per hour for all employers. However, local ordinances in over 40 cities and counties set higher rates (e.g., San Francisco at $18.67, San Jose at $17.95).
Exempt Employees: The new minimum annual salary for exempt employees is $68,640. Special minimums apply for computer professionals ($118,657.43/year) and physicians ($103.75/hour).
PAGA Reform: The Private Attorneys General Act has been significantly amended. Employees must have experienced the alleged violation to bring a claim, and employers may now “cure” certain violations to avoid litigation. Penalties may be reduced for employers who take “reasonable steps” to comply, such as conducting payroll audits or providing employee training.
Hiring Practices
Driver’s License Restrictions: Job postings may not require a driver’s license unless driving is a necessary job function, and alternative transportation is not feasible.
AI in Hiring: Employers using AI-based hiring tools should ensure compliance with federal and state anti-discrimination laws. Vendors should be transparent about algorithmic criteria and conduct regular audits.
Independent Contractors (SB 988): Written contracts are required for covered independent contractor relationships and must specify services, payment terms, and due dates. Failure to provide a written agreement may result in civil penalties.
Workplace Requirements
Workplace Violence Prevention: Effective July 1, 2024, most California employers must implement and train employees on a written Workplace Violence Prevention Plan. The plan must be accessible and include reporting procedures, hazard assessments, and post-incident protocols.
Indoor Heat Illness Prevention: Employers must adopt written plans for worksites where indoor temperatures reach 82°F or higher, provide cool-down areas, and monitor for symptoms of heat-related illness.
Leaves of Absence
Paid Family Leave (AB 2123): Employers may no longer require employees to use accrued vacation before accessing Paid Family Leave benefits.
Crime Victim Leave (AB 2499): Expands job-protected unpaid leave for employees and family members who are victims of qualifying acts of violence. Employers must provide written notice of rights beginning July 1, 2025.
Agricultural Worker Leave (SB 1105): Permits the use of paid sick leave during local or state emergencies due to smoke, heat, or flooding.
Harassment, Discrimination, and Retaliation Prevention
Intersectional Discrimination (SB 1137): Clarifies that California’s civil rights laws prohibit discrimination based on any combination of protected characteristics.
Captive Audience Ban (SB 399): Employers may not require employees to attend meetings that express views on religion, politics, or unionization. The law is currently being challenged in federal court.
Pregnant Workers Fairness Act: A new federal law expands employer obligations to accommodate pregnancy-related conditions, even if temporary or minor.
Posting Requirements
Updated notices are required in the following areas:
- Minimum wage increases
- Workers’ compensation rights (AB 1870)
- Whistleblower protections (AB 2299)
- Crime victim leave (AB 2499) – model notice available July 1, 2025
- I-9 Compliance
COVID-era flexibility has ended. All I-9 documents must be physically inspected within three business days of hire. Employers must retain forms securely, separate from personnel files, and comply with California’s unique pre- and post-inspection notice requirements.
We recommend employers conduct internal audits of their wage practices, employee classifications, handbook policies, and posting compliance to reduce risk. For questions or to schedule a compliance consultation, please contact our office.
U.S. Supreme Court Overturns Chevron Doctrine’s Deference to Federal Agencies
For over 40 years, the “Chevron Doctrine” governed the interpretation of ambiguous statutes or regulations in areas of the law where Congress had empowered federal agencies to undertake rulemaking. (Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984) 468 U.S. 837 (“Chevron”).) Under this long-standing framework, courts were required to defer to federal agencies’ “reasonable” interpretations of ambiguous statues and regulations, thereby precluding judges from substituting their own interpretation of a regulation or statute, even when the court’s interpretation differed from that of the federal agency.
However, in June 2024, the United States Supreme Court overturned Chevron, instead holding that courts must exercise independent judgment in deciding whether an agency has acted within its statutory authority, and that courts cannot defer to an agency’s interpretation of the law merely because a statute is ambiguous. (Loper-Bright Enterprises v. Raimondo (2024) 603 U.S. ____, 35 (“Loper-Bright”).)
For clients dealing with federal agencies, Loper-Bright will likely change the legal landscape, as the Supreme Court’s decision may increase the likelihood of success of challenges to agencies’ interpretations of certain statutes and regulations. However, agency deference is unlikely to disappear entirely because the Supreme Court left intact other relevant case law. As a result, many courts are likely to fall back on the pre-Chevron “Skidmore deference,” which establishes that agency interpretations may be “entitled to respect” to the extent the agency has the “power to persuade” by virtue of its body of expertise, consistency, and thoroughness of judgment, or by virtue of other compelling case characteristics. (Skidmore v. Swift & Co. (1944) 323 U.S. 134, 323 (“Skidmore”).) This allows courts to apply agency deference on a case-by-case basis to the extent such deference may be appropriate based on the facts.
For clients dealing with California state agencies, Loper-Bright is unlikely to have any immediate, direct effect on the courts. California has its own body of case law governing agency deference that technically remains unaffected by the U.S. Supreme Court’s decision in Loper-Bright. California’s seminal agency deference case, Yamaha Corp. of America v. State Bd. of Equalization, established two broad categories of factors relevant to a court’s assessment of the weight to give an agency’s interpretation: those “indicating that the agency has a comparative interpretive advantage over the courts,” (i.e., whether an agency is specially situated to interpret the laws at issue, such as those involving highly technical or scientific regulations) and those “indicating that the interpretation in question is probably correct” (which considers factors such as how consistent and rigorously-considered the agency’s interpretation has been over time). In crafting this test, the Court relied on Skidmore, not Chevron, finding that agencies’ interpretations are entitled to “great weight and respect,” though the degree of deference afforded is “fundamentally situational.”
The reasoning of Loper-Bright could potentially trickle down to the state level, which may result in an increased number of challenges to California’s less-deferential approach to agency interpretation. If so, those challenges may ultimately change California law with respect to agency interpretation. Time will tell.