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.