Blog - Month: January 2025

With 2025 now upon us, so is a slew of new laws and regulations that will affect California businesses.

Every year, laws passed by the state Legislature and signed into law by the governor take effect, and 2024 was a busy legislative session in Sacramento. The end result is another round of new legislation that California employers need to stay on top of.

This item is the first of two parts, highlighting the top 10 laws and regulations affecting California businesses in 2025.

 

1. ‘Captive audience’ meetings barred

Starting Jan. 1, California employers are prohibited from requiring employees to attend “captive audience” meetings where the employer shares its opinions on political or religious matters.

This includes topics such as unionization, legislation, elections or religious affiliations. Under the new law, SB 399, employees who choose not to attend must still be paid for their regular work time during these meetings.

Employers are also barred from retaliating, discriminating or taking any adverse action against employees who opt out.

The law applies broadly to most employers, but does include some exceptions, including religious organizations, political organizations and educational institutions providing relevant coursework. The law also allows for required communications or training mandated under laws related to workplace safety, civil rights or job performance.

Employers who violate SB 399 could face significant consequences, including a civil penalty of $500 per employee, per violation. Workers who believe their rights were violated can file a complaint with the Labor Commissioner, seek injunctive relief (a court order to stop the violation), and potentially claim additional damages through civil lawsuits.

 

2. ‘Egregious‘ offenders

Cal/OSHA is working on new rules that would crack down and step up enforcement and penalties against California employers that commit “egregious” and “enterprise-wide” workplace safety violations.

The forthcoming rules, expected to take effect this year, would impose substantial penalties on companies that have “shown a disregard towards California workplace safety regulations and the well-being of their employees.”

A business cited for an egregious violation could be fined up to $158,000 “per instance,” meaning it can be applied for each employee exposed to the violation and across multiple locations.

Violations that could be considered “egregious” include, but are not limited to, the following:

• The employer, intentionally, through conscious, voluntary action or inaction, made no reasonable effort to eliminate the known violation.
• The employer has a history of one or more serious, repeat or willful violations, or more than 20 general or regulatory violations per 100 employees.
• The employer intentionally disregarded its health and safety responsibilities, such as by failing to maintain an effective Injury and Illness Program or ignoring safety and health hazards.

 

3. Expanded paid sick leave

Two bills have expanded the use of paid sick leave.

The more far-reaching measure, AB 2499, expands current state law that allows employees who are victims of crime or abuse to take time off for court appearances, treatment and various other reasons.

The new measure also expands the use of paid sick leave to cover certain “safe time” absences for issues like:

• Domestic violence,
• Sexual assault,
• Stalking, or
• 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.
  • An individual uses or makes a reasonably perceived or actual threat of use of force against another to cause physical injury or death.

 

AB 2499 also permits workers to take time off to help family members who are victims of a crime.

The law protects workers from the threat of discrimination or retaliation for requesting or taking the time off. Under the new law, employees can use vacation, personal leave, paid sick leave, or compensatory time off that is available to them for safe-time absences. It applies to workplaces with 25 or more staff.

The second measure, SB 1105, allows agricultural workers to use accrued paid sick leave to avoid smoke, heat or flooding conditions created by a local or state emergency, like a heatwave, wildfire or flooding.

The measure states that this is a clarification that existing law allows workers to take sick days for preventive care.

 

4. Freelance Worker Protection Act

Starting this year, California’s Freelance Worker Protection Act imposes new requirements on businesses hiring freelance workers for professional services worth $250 or more.

The law requires employers to provide freelancers with a written contract outlining key details, including the services provided, payment amounts and deadlines for compensation. If no payment date is specified in the contract, freelancers must be paid no later than 30 days after completing their work.

Businesses cannot require freelancers to accept less pay than agreed upon or provide additional services after work has begun as a condition for timely payment.

Importantly, the law also prohibits retaliation against freelancers who assert their rights, such as raising complaints about violations or seeking enforcement of the law.

Noncompliance can lead to significant penalties. If a written contract is not provided, employers may face a $1,000 penalty.

Late payments can result in damages up to twice the amount owed, while other violations may require businesses to pay damages equal to the value of the contract or the work performed — whichever is greater. Freelancers can also file lawsuits to recover unpaid amounts and seek attorney’s fees.

 

5. Indoor heat illness

These new requirements actually took effect at the end of last summer, so 2025 is the first full year they’ve been in effect.

Cal/OSHA’s indoor heat illness prevention rules require employers to protect workers in indoor workplaces when temperatures reach 82 degrees Fahrenheit or higher. These regulations apply to most indoor settings, but will mainly affect restaurants, warehouses and manufacturing facilities.

At 82 degrees, employers must ensure workers have cool, potable water nearby and access to a cool-down area where temperatures remain below 82 degrees. Workers should be encouraged to take rest breaks to prevent heat-related illness, and monitored for symptoms during these breaks. If clothing restricts heat removal or radiant heat sources are present, these measures apply immediately.

At 87 degrees, employers must take additional steps, when feasible, such as cooling work areas, providing personal heat-protective equipment and implementing work-rest schedules.

Affected employers should evaluate options like installing air conditioning to maintain safe temperatures. While this is feasible for smaller spaces, larger facilities like warehouses may require alternative compliance strategies.

 

6. PAGA reform

In July 2024, Gov. Newsom signed into law two measures aimed at curbing rampant abuse of the Private Attorney General Act, which has become a costly thorn in the side of businesses in California.

PAGA allows workers who allege they have suffered labor violations, like unpaid overtime or being denied mandatory meal and rest breaks, to file suit against their employers rather than take the more typical route of filing a claim with the state Department of Labor Standards Enforcement.

The new laws aim to reward employers with reduced penalties if they address in good faith issues raised by an employee.

For example, the reforms cap the assessment at 15% of the available penalty for employers that take immediate and proactive steps to bring themselves into compliance with California Labor Code. Employers that take “reasonable” steps to address issues within 60 days of receiving a PAGA notice would face a maximum penalty of 30% of the available penalty under the law.

The new PAGA also requires a worker to personally experience violations alleged in a claim if they want to bring action. It also increases workers’ share of awards to 35%, from 25%. The rest of the funds go to the Labor & Workforce Development Agency.

However, legal pundits predict the changes won’t reduce the amount of PAGA lawsuits being filed in the state.

 

7. Family leave change

A new law, AB 2123, bars employers from requiring that workers who plan to take time off under the state’s Paid Family Leave Program first take up two weeks of accrued vacation time before benefits kick in.

 

8. Driver’s license queries

Starting in 2025, employers are barred from listing in help-wanted ads and job applications that having a driver license is a prerequisite for a job, unless the employer:

• Reasonably expects that driving will be part of the job, and
• Reasonably believes that allowing the employee to use alternative forms of transportation (including ride-sharing, taxi or bicycle) would take more time or require the business to incur higher costs.

 

9. Poster updates

Employers have to update two mandatory work posters this year.

The standard poster that informs employees about their rights under workers’ compensation laws, needs to be updated. The new poster must include language stating that employees may consult with an attorney for advice about workers’ comp law and that they may have to pay attorneys’ fees if they hire a lawyer as part of their claim.

Also, businesses are required to post an updated paid leave law notice to reflect the changes ushered in by AB 2499, the paid leave law for crime and abuse victims discussed above.

 

10. Minimum wage

California’s minimum wage increased to $16.50 an hour on Jan. 1. This rate is for all areas of the state, except for those jurisdictions that have implemented their own minimum wage to reflect the higher cost of living in their area.