January 1, 2025
by Admin

2025 Employment Law Update – Spreading Holiday Cheer and Employment Law Updates to All

As we enter 2025, California employers face a landscape of evolving employment laws that will significantly impact how businesses operate. This year’s updates focus on increased worker protections and compliance requirements, making it essential for employers to stay informed and proactive. Here is a summary of the key changes that employers should be aware of.

California Minimum Wage

The results of Proposition 32 are finally in and it has failed, marking the first time in recent history that California voters have rejected a statewide minimum wage increase. Instead of the proposed $18 per hour under Proposition 32, on January 1, 2025 the statewide minimum wage will increase from $16.00 to $16.50 per hour. As a result, the salary threshold for exempt employees will rise from $66,560 per year to $68,640. Employers should also check local ordinances for city and county minimum wage rates.

AB 2123 – Paid Family Leave

Effective January 1, 2025, Employers will be prohibited from requiring employees to use accrued vacation leave before accessing California’s Paid Family Leave Program (“PFL”). Previously, employers could require employees to take up to two weeks of accrued vacation before employees could access PFL benefits.

AB 2499 and SB 2499 – Jury, Court, Victim Time Off Provisions

AB 2499 expanded the list of crimes for which employees can take time off and allows employees to take protected time off to assist family members who are victims of specified crimes.

Effective January 1, 2025, the definition of “victims” will include a victim of a “qualifying act of violence,” which means any of the following, regardless of whether anyone is arrested for, prosecuted for, or convicting of committing any crime:

  • Domestic violence
  • Sexual assault
  • Stalking
  • An act, conduct, or pattern of conduct that includes:
    • An individual causes bodily injury or death to another;
    • An individual exhibits, draws, brandishes, or uses a firearm or other dangerous weapon, with respect to another; or
    • An individual uses or makes a reasonably perceived or actual threat of use of force against another to cause physical injury or death.

Moreover, AB 2499 permits employees to use vacation, personal leave, paid sick leave, or compensatory time off that is available unless otherwise provided in a collective bargaining agreement.

The new law also requires employers to provide written notice of their rights established under this bill to new hires, to all employees annually, at any time upon request, and any time the employer becomes newly aware that an employee or an employee’s family member is a victim.

SB 2499 prohibits employers with 25 or more employees from discharging or otherwise retaliating against an employee who is a victim, or has a family member who is a victim, for taking time off for various specified purposes related to a qualifying act of violence.

SB 1137 and AB 1815 – Anti-Discrimination Laws

Effective January 1, 2025, SB 1137 amends, among others, the California Fair Employment and Housing Act to prohibit discrimination not just because of one protected trait, but also because of the combination of 2 or more protected bases.

AB 1815 amends the definition of “race” in, among other laws, the California Fair Employment and Housing Act (“FEHA”). Existing law makes it unlawful to engage in specified discriminatory employment practices based on certain protected characteristics, including race, unless based on a bona fide occupational qualification or applicable security regulations, and prohibits housing discrimination based on specified personal characteristics, including race. Existing law also prohibits discrimination because of a perception that a person has one of those protected characteristics or is associated with a person who has, or is perceived to have, any of those characteristics. FEHA defines the term race for purposes of those provisions to include traits historically associated with race, including, but not limited to, hair texture and protective hairstyles, as defined. AB 1815 removes the term “historically” from the definitions of race, thus defining race to include traits associated with race, including, but not limited to, hair texture and protective hairstyles.

SB 1100 – Driver’s License Requirements in Job Postings

In California, driver’s licenses have increasingly become a condition of employment. Effective January 1, 2025, SB 1100 makes it unlawful to include statements about the need for a driver’s license in job advertisements, postings, applications, and similar employment materials unless the employer reasonably expects the duties of the position to require driving and the employer reasonably believes that satisfying that job function using an alternative form of transportation would not be comparable in travel time or cost to the employer.

An “alternative form of transportation” can include, but is not limited to:

  • Ride-hailing services
  • Taxis
  • Carpooling
  • Bicycling
  • Walking

SB 399 – Mandatory Meetings During Union Organizing

Effective January 1, 2025, the California Worker Freedom from Employer Intimidation Act will take effect. The new California law attempts to prohibit mandatory employer meetings regarding labor organizations known as captive audience meetings. Specifically, an employer is prohibited from subjecting, or threatening to subject, an employee to discharge, discrimination, retaliation, or any other adverse action because the employee declines to attend an employer-sponsored meeting or refuses to listen to any communications with the employer or its agents where the purpose is to communicate the employer’s opinion about religious or political matters which includes labor organizations. An employer who violates this section shall be subject to a civil penalty of five hundred dollars ($500) per employee for each violation.

SB 988 – Freelance Worker Protection Act

SB 988 establishes the Freelance Worker Protection Act (“FWPA”) to impose minimum requirements on contracts between a hiring party and a freelance worker. Under the new law, “freelance worker” is defined as:

  1. A person or organization composed of no more than one person, whether or not incorporated or employing a trade name;
  2. That is hired or retained as a bona fide independent contractor by the hiring party to provide “professional services” (as defined under the California Labor Code);
  3. In exchange for an amount equal to or greater than $250.

Under the new law, an agreement between a hiring party and a freelance worker must be in writing and include the following:

  • Names and addresses of both parties;
  • An itemized list of services, their value, and the compensation method;
  • Payment due dates or mechanisms for determining them; and
  • Due dates the freelance worker to report completed services for processing timely payment.

A hiring party must pay a freelance worker on or before the date compensation is due pursuant to the contract and, if the contract does not specify, no later than 30 days after the completion of the contracted work. Additionally, once a freelance contractor has started performing services under the contract, the hiring party cannot require the freelance worker to accept less compensation or provide more services than agreed upon in the contract.

The FWPA sets forth prohibitions against retaliatory actions by hiring entities for a freelance worker taking any of the following actions:

  • Opposing any practice prohibited by the Act
  • Participating in proceedings related to the enforcement of the Act
  • Seeking to enforce rights under the Act

The Act applies to contracts entered into or renewed on or after January 1, 2025.

PAGA Reform

After much anticipation, the Private Attorney General Act (“PAGA”) was reformed in June. The reform attempted to add some employer protections to PAGA. One of the biggest changes is that smaller Employers may cure more alleged Labor Code violations to prevent a civil penalty. Alleged failures to pay wages, break premiums, and expense reimbursements are now curable violations, pursuant to a set “cure” procedure with designated amounts. Companies with less than 100 employees in the year prior to the PAGA notice may avail themselves to the cure procedures by first submitting a notice to the LWDA with a confidential proposal to cure, and then working with the agency to ensure the violations have been cured.

One of the biggest changes is that employers are incentivized to take active steps toward ensuring Labor Code compliance. An employer that demonstrates it “has taken all reasonable steps to be in compliance” before receiving the plaintiff’s request for employment records or PAGA notice might have the maximum civil penalty award capped at 15% of what would otherwise be the maximum potential award. An employer that demonstrates it took “all reasonable steps to be in compliance” with the alleged Labor Code violations in a PAGA notice within 60 days after the employer received the notice might have the maximum civil penalty award capped at 30% of what would otherwise be the maximum potential award. The new law provides that reasonable steps include:

  • Conducting periodic payroll audits and taking action in response to the results of the audit;
  • Disseminating lawful written policies;
  • Training supervisors on applicable Labor Code and wage order compliance; or
  • Taking appropriate corrective action with regard to supervisors.

Additional changes include the following:

  • Employers have a right to an automatic stay of the case and early neutral evaluation of the claims.
  • PAGA plaintiffs represented by private law firms can only pursue civil penalties based on alleged Labor Code violations they personally experienced. BUT, this does not apply to PAGA plaintiffs represented by non-profit legal aid organizations.
  • PAGA claims must be predicated on alleged violations that occur within the one-year statute of limitations period.
  • Courts have the authority to limit both the scope of claims and evidence presented at trial.
  • There is now a reduction of civil penalties for certain wage statement violations and for certain isolated errors. Civil penalties for innocuous wage statement violations are limited to $25 per violation and the $250/$1,000 civil penalty established by Labor Code 226.3 does not apply to allegedly deficient wage statements.
  • “Stacking” civil penalties based on certain derivative violations is eliminated, and any civil penalties for alleged violations of Labor Code sections 201-204, and 226, which are predicated on – or purely derivative of – a separate Labor Code violation are prohibited.

As always, staying informed and compliant is essential for success in California’s demanding employment landscape. Your BMJ employment attorneys are here to answer any questions or get more detail on any of these new laws.

We wish you a very happy holiday season and a successful 2025!

Questions about what to expect in 2025?

As always, we advise you to consult with your favorite employment law attorney should you have any questions or to get a more detailed briefing on any new laws. The BMJ Employment Law Department is happy to help.

Diane CodernizBaker Manock & Jensen’s Employment Law Practice Group facilitated by partner Diane Coderniz who has extensive experience representing employers, in both the public and private sector, in a broad range of employment matters, including counseling employers on day-to-day issues, and litigating cases throughout the State of California.

Disclaimer
This Legal Update / Bulletin is for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. This update should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.