In 2025, we are seeing major changes for employment compliance. This blog post introduces small business owners and administrators to the legislation changes and potential solutions, so they may be prepared and compliant once the holidays are over, and 2025 Q1 rolls in.
Are we wrapping up 2024, already?!
For me, the year flew by. It feels like we were just enjoying the bright and mild days of Spring, and now we are moving through the Fall holidays. Naturally, for organizations this season means wrapping up the financials for the end of year, making payroll considerations to ensure accurate records, and managing employee benefits, compliance, and reporting.
Labor laws are also changing, which means it’s a good time for business owners and administrators to understand the legislation changes in California set to come into effect on January 1, 2025. Don’t be surprised when a new employment law, or two, or five, pop-up during the first quarter of 2025 or after, along with labor law poster updates.
The purpose of this post is to support business owners and administrators to gain the clarity to best support their businesses, forecasting and financial projections, and ultimately be prepared for the changes in business in 2025. To accomplish this purpose, this post outlines the incoming changes in compliance legislation, and gives employers the next steps to remain in compliance and do good business.
Here’s the list as we know it, as we bring November to a close:
1.) Statewide Minimum Wage Increase – Eff. 1/1/25
SB 3: California Minimum Wage – On January 1, 2025 California’s statewide minimum wage is increasing to $16.50/hour for all hourly non-exempt employees.
To meet the minimum salary increase, salaried exempt employee salaries will need to increase to $68,640/year. (This is calculated by taking two times the State minimum wage times 2080 hours in a year.). *Fast Food businesses with 60 or more locations need to continue to pay hourly workers $20.00 per hour or $83,200 for salaried employees.
Please note: Prop 32 did not pass which means increasing minimum wage to $18.00/hour in 2025 (for businesses with 26 or more employees), and to $17.00/hour in 2025 (for businesses with 25 or fewer employees).
What employers need to do:
- Budget to comply with new minimum wage (and minimum exempt salary) amounts for current and future employees
- Inform and support current employees through their applicable wage increase
- Prepare to update Wage Theft Notices for non-exempt employees as needed
- Expect updates to the required minimum wage workplace posting
2) Statewide Ban on Forced Work Meetings for Religion and Politics – Eff. 1/1/25
SB 399: Employer Speech Rights – This is legislation is also known as the California Worker Freedom from Employer Intimidation Act. This law prohibits public and private employers from discharging, retaliating, or taking adverse action against an employee (or threatening to do so), if an employee declines to attend or listen to an employer meeting/communication regarding the employer’s opinion on political or religious matters. Employees who refuse to attend would still have a right to be compensated for the meeting time. The law includes specified exceptions including for certain religious organizations, political organizations, and educational institutions.
“Political matters” means matters relating to elections for political office, political parties, legislation, regulation, and the decision to join or support any political party or political or labor organization.
“Religious matters” means matters relating to religious affiliation and practice and the decision to join or support any religious organization or association.
Violations may result in a $500 fine, civil action against the employer, and compliance enforcement by the Labor Commissioner.
What employers need to do:
- Ensure supervisors/managers are trained on employee rights and protections concerning politics and religion, and provide reminders of employee rights and protections, particularly near election cycles
- Ensure employee handbook/leave policies and forms are updated
3) Statewide Updated Protections Posting for Whistleblowers – Eff. 10/16/24
AB 2299: Poster Update – AB2299 mandates the Labor Commissioner to update its “Whistleblowers Are Protected” poster to ensure compliance with all current legal requirements. As of January 1, 2025, employers are required to prominently display the poster, showing the list of employees’ whistleblower rights and responsibilities to be deemed in compliance with the requirement.
What employers need to do:
- Widely post the updated whistleblower’s rights and responsibilities poster on organizational property once available
4) Statewide Time Off for Victims of Violence – Eff. 1/1/25
AB 2499: Crime Victims Leave Expansion – AB 2499 creates new reasonable accommodation requirements for employees who are victims (or have family members who are victims) of qualifying violent acts. Victim leave rights are expanded to employers with 25 or more employees. These organizations are required to offer victims (or employees who have family members who are victims) time off for a number of purposes, for up to 12 weeks total. Paid sick leave is also expanded to cover qualifying time off under AB 2499. The bill also includes a new employee notice requirement, which must be provided to employees at hire, annually, upon request, and upon qualifying circumstances.
What employers need to do:
- Ensure employee handbook/leave policies and forms are updated
- Comply with new notice requirements for applicable employees
5) Statewide Ban on Driver’s License Discrimination in Job Listings – Eff. 1/1/25
SB 1100: Job Listing and Driver’s Licenses – SB110 prevents employers from requiring an applicant to have a valid driver’s license in a job advertisement, posting, application, etc. unless: (1) the employer reasonably expects driving to be one of the job functions for the position, AND (2) the employer reasonably believes that satisfying the job function using an alternative form of transportation (walking, biking, taxi, etc.) would not be comparable in travel time or cost to the employer.
What employers need to do:
- Review your job advertisements, postings, etc. for compliance and make changes as necessary
6) Vacation Time not Required for Paid Family Leave – Eff. 1/1/25
AB 2123: Paid Family Leave Change – In the past, employers could require employees to take up to 2 weeks of accrued vacation before using California Paid Family Leave (PFL) benefits through the State. Now, employers may no longer require employees to use accrued vacation leave before using PFL.
What employers need to do now:
- Ensure employee handbook/leave policies and forms are updated
- Update your Paid Family leave policy accordingly and inform employees of the change
7) California Independent Contractor Protections Increased – Eff. 1/1/25
SB 988: Contracts for Independent Contractors – This legislationrequires the hiring entity to execute a written contract with an independent contractor if professional services are equal to or greater than $250. The contract must include specified terms, and the hiring entity must provide a copy to the independent contractor and retain the contract for 4 years, among other requirements.
What employers need to do:
- Review policies relating to the hiring and payment of independent contractors
- Revise document retention policies concerning independent contractors
- Ensure that independent contractors are properly classified as such under California law
- Consult legal counsel as needed