California Employers, Get Ready! Wide Range of Employment-Related Laws Will Take Effect January 1, 2025 + 4 Essential California Employee Handbook Updates for 2025

New California employment laws are scheduled to take effect on January 1, 2025. These laws address a variety of issues, including the state minimum wage, discrimination protections, paid time off, and employers’ messages about unionization.
 
Quick Hits

• California’s minimum wage will increase from $16.00 to $16.50 per hour.
• New legislation clarifies that employers may not discriminate against workers because they have a combination of protected characteristics or do not have a driver’s license.
• California employers will no longer be allowed to hold captive-audience meetings to discuss union organizing.

Minimum Wage
On January 1, 2025, California’s minimum wage will rise from $16.00 to $16.50 per hour for all employers, regardless of size. Some California cities have set a higher minimum wage rate with which employers must comply. The annual minimum salary for exempt employees will jump from $66,560 to $68,640 per year across the state.

Fast-food workers will continue to have their own minimum wage rate of $20.00 per hour for nonexempt employees and $83,200 annually for exempt employees.

Discrimination Law
Under California law, employers cannot discriminate on the basis of sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status. Starting January 1, 2025, it will also be illegal to discriminate based on a combination of two or more of those protected characteristics. For example, employers may not discriminate against a worker because she is Hispanic and female.

Lawmakers amended the California Fair Employment and Housing Act (FEHA) to make it illegal for an employer to require job applicants to have a driver’s license. Job ads may be exempt from this provision if the employer reasonably expects driving to be one of the position’s job functions.
Meanwhile, new legislation permits California cities and counties to enforce state and local laws prohibiting employment discrimination against any of the protected classes established by state law. Previously, only the state’s Civil Rights Division could enforce the FEHA and the Unruh Civil Rights Act.

Leaves of Absence
A new California law will prohibit employers from discriminating or retaliating against an employee for taking time off from work for jury duty or to comply with a subpoena or other court order as a witness in court.

This law also bars employers from discriminating or retaliating against a worker who takes time off because the worker or a family member experienced an act of violence, such as domestic violence, sexual assault, or stalking. The law entitles these employees to time off to obtain a restraining order, receive services from a domestic violence shelter, or seek medical attention, safety protections, or psychological counseling.

California lawmakers passed another bill to prevent employers from requiring workers to take accrued vacation leave before they use the state’s paid family leave program. Previously, employers could mandate that employees take up to two weeks of accrued vacation before they access the state’s paid family leave benefits.

Captive Audience Meetings
Starting January 1, 2025, California law will prohibit employers from holding mandatory meetings during working hours to discuss political or religious matters, including union organizing. An employer that violates this law could be subject to a $500 penalty per employee per violation.

Protection for Freelance Workers
Meanwhile, the new Freelance Worker Protection Act (FWPA) will require California employers to pay freelance workers on or before the date specified by the contract, or within thirty days after completion of the work, if the contract does not specify a date. The act requires employers to provide a written contract to freelance workers and retain the contract for at least four years. An aggrieved freelance worker may bring a civil lawsuit to enforce the FWPA and may recover attorneys’ fees, injunctive relief, and any other remedies deemed appropriate by the court.

Workplace Restraining Orders
A law addressing workplace violence restraining orders, which was enacted in 2023, will become effective on January 1, 2025. It allows employers to seek a temporary restraining order against an individual who has harassed their employees. It expands the law to include not only violence and threats of violence, but also harassment. The law defines harassment as “a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person, and that serves no legitimate purpose. The course of conduct must be that which would cause a reasonable person to suffer substantial emotional distress, and must actually cause substantial emotional distress.”

Social Compliance Audits
Another new law requires California employers to publish audit findings on their website when they voluntarily conduct a social compliance audit to determine whether child labor is involved in the employer’s operations or practices. The law defines a “social compliance audit” as a “voluntary, nongovernmental inspection or assessment of an employer’s operations or practices to evaluate whether the operations or practices are in compliance with state and federal labor laws.” The new law does not specify when or for how long an employer must post the link. Nor does it specify the penalty for noncompliance. The California Division of Labor Standards Enforcement likely will publish a list of frequently asked guidance (FAQs) and/or guidance about these new obligations in the future.

New Whistleblower Poster
The California labor commissioner will develop a model list of employees’ rights and responsibilities under state and federal whistleblower laws. Employers that post the model list will be deemed in compliance with the state’s requirement to prominently display a list of employees’ rights and responsibilities related to whistleblower laws.

Next Compliance Steps
Businesses may wish to plan ahead for higher labor costs with the new minimum wage rate. They also may wish to review exempt employees’ salaries to ensure that they meet the new salary basis test.

Employers may wish to update their antidiscrimination policies to forbid discrimination based on an intersection of protected characteristics. They also may wish to review their printed and online job advertisements, postings, and applications to ensure they do not require job applicants to have a driver’s license for positions that do not require driving.

4 Essential California Employee Handbook Updates for 2025

The new year provides an excellent opportunity for employers of all sizes to update their employee handbooks and policies to stay compliant with new laws and regulations. This is especially true in California, where legislation changes frequently. New laws effective in January 2025 may affect non-discrimination, leave, and vacation policies in important ways.
 
No. 1: Intersectionality discrimination
Existing California law protects employees from discrimination on the basis of many categories, including race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, age, sexual orientation, reproductive health decision making, or veteran or military status. Recent legislation, SB 1137, explicitly extends those protections to include the “intersection” or combination of two or more of those categories. For instance, the statute will deem it illegal for an employer to reject job applicants because they have a specific combination of race and veteran status, such as Latino veterans. 
Employers may wish to review their nondiscrimination policies and consider adding language to the effect that discrimination based on a combination or intersection of protected categories also violates the policy. 
 
No. 2: Hairstyle discrimination
In 2019, California became the first state to ban employers from discriminating on the basis of hairstyles when it passed the Crown Act. The 2019 version of the Act protected traits that were “historically” associated with race. This year, legislators updated the Act to say that “race” includes “traits associated with race, including, but not limited to, hair texture and protective hairstyles.”

Approximately half of the 50 states have passed their own versions of the Crown Act, so employers in California and these other states should review the language of their non-discrimination policies, as well as any applicable grooming and dress code policies, with their counsel to decide on the most appropriate language for their businesses. 
 
No. 3: Paid Family Leave and accrued vacation
The California Paid Family Leave law allowed employers to require employees to exhaust their accrued, unused vacation time before they could receive benefits under the law. Effective January 1, employers will no longer be able to do this.

Employers should review and update their California leave and vacation policies as needed.
 
No. 4: Expanded time for jury duty and court, and crime victims
Effective January 1, AB 2499 will broaden the protections available to employees when they take time off for jury duty or court appearances, or when they or their family members become victims of violence or a crime.
 
Employees will now be protected if they are victims of “qualifying acts of violence,” including domestic violence, sexual assault, stalking, threats of or acts causing bodily injury or death, or brandishing a firearm or other dangerous weapon. Employers must allow affected employees to use vacation, personal leave, paid sick leave, or other applicable compensatory time off for a wide range of activities associated with jury duty, to appear in court as a witness, or for activities associated with qualifying acts of violence, such as obtaining medical attention, obtaining services of a domestic violence shelter, or taking time off from work to obtain a restraining order. Similar to employees who may have qualifying disabilities, an employee who is the victim of violence may also request reasonable accommodations to help ensure their safety while at work. Employers will be required to engage in an interactive process with employees making these requests, and must do so in a timely manner and in good faith.

Employers must provide written notice of these rights to employees at the time of hire and once a year afterward. The written notice also much be provided upon the request of the employee, and whenever the employer becomes aware that an employee or member of the employee’s family may be a victim of violence or a crime.
 
No. 5 (BONUS): New California workplace posting requirements
Pursuant to AB 2299, the California Labor Commissioner will develop a “model list of employees' rights and responsibilities under the whistleblower laws,” and employers will be required to display the list in the workplace along with the telephone number for a state whistleblower hotline. Employers should ensure they update this and other applicable workplace posting requirements on a periodic basis.