Presented By: Marco Lucido & Bradley Levang
The start of 2025 brings a wave of changes to California labor and employment laws that every employer should be aware of. In addition to the statewide minimum wage increase, some industries and regions are seeing unique adjustments that may require immediate attention. Below is a concise overview to help you prepare for the year ahead. For a more detailed discussion, be sure to check out the PowerPoint presentation available on our website.
One of the headline changes this year is the new statewide minimum wage for non-exempt employees. Effective Jan. 1, 2025, all California employers are required to pay workers at least $16.50 per hour. However, local ordinances across nearly 40 different cities and counties impose higher minimums—San Francisco’s rate has climbed to $18.67, and Los Angeles is set at $17.28, to name just two. These variations can be especially tricky if your workforce operates in multiple locations, so it’s crucial to stay updated on the local rules that might apply to your business.
Exempt employees have also been impacted. To qualify for an administrative, executive, or professional exemption in 2025, the annual minimum salary has risen to $68,640. Several categories of workers, such as computer professionals and physicians, are subject to specialized pay thresholds above and beyond the regular exempt salary level, so it’s important to verify that these employees meet the specific requirements laid out by law. Meanwhile, the newly established Fast Food Council has the authority to raise the fast-food worker minimum wage beyond the current $20 per hour, and the ongoing increases for healthcare workers—some of which took effect in October 2024—will continue to roll out at different intervals depending on the facility type and county jurisdiction.
Another new year essential is posting the correct official notices. The 2025 Minimum Wage Poster, published by the Department of Industrial Relations, must be displayed in a location accessible to employees. Employers also need to notify workers in writing whenever a pay rate changes—compliance with Labor Code section 2810.5 includes providing the updated wage information using the DIR’s “Notice to Employee” form. Failing to do so can leave your business exposed to expensive enforcement actions or private lawsuits.
Speaking of lawsuits, the Private Attorneys General Act (PAGA) remains a hot topic. Under this law, a single employee can bring claims on behalf of all similarly affected employees for alleged Labor Code violations, without having to go through the traditional class action certification process. This year, reforms spearheaded by the Governor’s office aim to introduce limits on who can bring suit and how penalties are calculated. Employers may have a chance to “cure” certain violations (like meal and rest break violations or miscalculated wages) by fully compensating employees for unpaid amounts plus interest, liquidated damages, and any reasonable attorney’s fees. Although curing violations might help an employer avoid litigation, the financial burden can be significant—so it’s vital to weigh the costs and benefits of this option.
In light of these legal updates, wage and hour audits are more important than ever. Common employer missteps—misclassifying employees as exempt, failing to provide legally required meal and rest periods, or neglecting overtime obligations—can expose a business to serious liability. Additionally, the rising use of artificial intelligence in hiring has captured the attention of the Equal Employment Opportunity Commission (EEOC). A pending case, Mobley v. Workday, Inc., has highlighted the potential for algorithmic bias, reminding employers they remain responsible for ensuring hiring technologies do not result in discrimination.
These changes and considerations are just the start. Navigating California’s legal landscape requires vigilance and proactive planning. If you want to dive into more detail about any of these topics—whether it’s PAGA reform or the ins and outs of local minimum wage ordinances—please visit our website and explore the comprehensive PowerPoint presentation prepared by our team.
Disclaimer: This newsletter provides a general overview and does not constitute legal advice. For guidance on how these laws apply to your specific situation, consult legal counsel.