As we approach 2025, California employers face a fresh wave of employment law changes that will impact business operations and employee management. While the number of new statutes this year is lower than in years past, the changes are nonetheless significant, requiring immediate attention and proactive measures. At PPRCLaw, we’ve outlined the most critical updates to help you navigate these changes effectively.
Minimum Wage Increases: Staying Ahead of the Curve
Starting January 1, 2025, California’s state minimum wage will increase from $16 to $16.50 per hour, tied to the Consumer Price Index (CPI). This fifty-cent hike will also impact the minimum salary threshold for exempt employees in administrative, executive, and professional roles, raising it to $68,640 annually (or $5,720 monthly). Employers must ensure all exempt employees meet this salary requirement or risk losing their exempt status.
Unionized employers, particularly those relying on collective bargaining agreement (CBA) exemptions, should also take note. Employees covered under applicable CBAs must now earn at least 1.3 times the state minimum wage—$21.45 per hour—to qualify for exemptions from overtime, sick leave, and other wage and hour laws. Failing to meet this threshold could void these exemptions, exposing employers to legal liability.
Additionally, certain industries face unique requirements:
- Fast-Food Workers: State law mandates a $20 minimum hourly wage for fast-food employees, with potential increases from the California Fast Food Council in 2025.
- Healthcare Workers: The minimum wage for healthcare employees, now $23 per hour, will rise to $24 in mid-2025 and $25 in mid-2026.
Local minimum wage ordinances often exceed state requirements and are frequently adjusted for inflation. Employers should review their payroll systems to ensure compliance at both the state and local levels.
Paid Family Leave: Enhanced Employee Protections
Effective January 1, 2025, AB 2123 removes employers' ability to require employees to use up to two weeks of accrued vacation before accessing Paid Family Leave benefits. Employers should revise their leave policies to align with this change and communicate the update clearly to employees.
Expanded Sick Leave: Supporting Broader Family Needs
AB 2123 also expands the scope of sick leave use. Employees may now use accrued sick leave to assist any family member affected by specific violent incidents or threats of violence. This update broadens the protections previously limited to victims of domestic violence, sexual assault, and stalking. Employers must update sick leave policies and ensure that HR and management staff are trained to implement these changes appropriately.
Ban on Captive Audience Meetings
Under AB 399, California employers are prohibited from requiring employees to attend meetings on religious, political, or labor organization matters. Effective January 1, 2025, the California Worker Freedom from Employer Intimidation Act also bars employers from retaliating against employees who refuse to attend such meetings. This law underscores employees’ rights to autonomy in these sensitive areas, and employers should revise their policies and practices to avoid potential violations.
Driver’s License Requirements in Job Postings Restricted
SB 1100 places new limitations on requiring a valid driver’s license in job postings and applications. Unless driving is a job-specific function and alternative transportation methods are not feasible, employers can no longer mandate a valid driver’s license as a condition of employment. This change is designed to reduce unnecessary hiring barriers and promote inclusivity in recruitment practices.
What Employers Should Do Next
The legal landscape for California employers is evolving rapidly, and 2025 brings a host of compliance challenges. To prepare:
- Audit Payroll: Verify that all employees meet the new minimum wage and salary thresholds.
- Update Policies: Revise handbooks to reflect changes to Paid Family Leave, sick leave, and other employment policies.
- Train Staff: Provide training for HR and management on implementing these legal updates effectively.
- Review Recruitment Practices: Ensure job advertisements and application materials comply with new restrictions.
- Consult Legal Counsel: Stay ahead of compliance risks by working with an experienced employment attorney.
At PPRCLaw, we specialize in navigating the complexities of California employment law. For personalized guidance on these updates and their practical implications, contact us today at 888.356.4937 or info@pprclaw.com to schedule a legal consultation and ensure your business is fully prepared for 2025.
Disclaimer: The information provided in this alert serves as general education and awareness for our readers and should not be solely relied upon for legal analysis or resolution. Legal advice should be sought based on specific factual assessments. Laws vary by jurisdiction and may change frequently, so this information may not always be current. Receipt of this alert does not establish an attorney-client relationship. For personalized guidance on individual situations, please consult the authors of this article, your designated PPRCLaw representative, or other qualified legal professionals.