With the results of the November 2024 election now in, we know what laws will be going into effect next year impacting employers and employees in California. Below is a summary of some of the most important new employment laws going into effect as of January 1, 2025, some of which will require handbook and other policy updates for businesses to remain in compliance. Please note that this is not a comprehensive account of all significant legal developments, but rather a summary of those laws that will impact many of our clients. If you have any questions about employment laws impacting your business or place of employment, please contact us.
Increased Statewide Minimum Wage
Because it is currently looking like Proposition 32 did not pass, which would have increased the state minimum wage beyond levels already approved by the government, effective January 1, 2025, the state minimum wage is projected to increase to $16.50/hr for all employers regardless of size. As we shared with you earlier this year, a number of California cities, including LA, Santa Monica, and West Hollywood, have local minimum wages that are higher than the state minimum wage. Employers need to comply with whichever law affords employees the highest minimum wage.
Increases in the state minimum wage impact not only minimum wage workers but also those employees who have been classified as exempt salaried workers because exempt salaried workers generally must be paid a base salary that is at least twice the state minimum wage for full-time employment (40 hours per week). Therefore, as of January 1, 2025, most exempt salaried workers must be paid no less than $68,640 annually to retain exempt status. Employees who have been misclassified as exempt, including because their salaries are below this threshold, can seek damages and penalties for unpaid overtime, missed meal and rest breaks, interest, and attorney’s fees.
Expanded Protections for Crime Victims
AB 2499 significantly expands the rights of crime victims, including victims of domestic violence, sexual assault, stalking, and other qualifying acts of violence, to take time off work to attend judicial proceedings related to the crime as well as to obtain reasonable accommodations to protect their safety in the workplace. For employers with 25 or more employees, the law extends additional protections to employees whose family members are victims.
Expanded Protections Against Driver’s License Discrimination
In 2025, it will be illegal for an employer to include a statement in their job ads, applications, and other related materials that the applicant must have a driver’s license unless both of the following conditions are satisfied:
(A) The employer reasonably expects driving to be one of the job functions for the position.
(B) The employer reasonably believes that satisfying those job functions using an alternative form of transportation (e.g., ride-sharing, carpooling, walking, biking, etc.) would not be comparable in travel time or cost to the employer.
Written Contracts Required for Certain Freelance Workers
The new Freelance Worker Protection Act will require there to be a written contract between a “hiring party” and a “freelance worker” when the worker is expected to provide “professional services” totaling $250 or more.
A “hiring party” is defined as any person or organization in CA that retains a freelance worker to provide professional services. The term “professional services” is broadly defined to include dozens of professional services as outlined in Labor Code 2778(b)(2). The law does not apply to individuals who are hiring services for the personal benefit of themselves, their family members, or their homestead.
The law includes specific requirements for the contents of the contract and will require the hiring party to pay the freelance worker on or before the date compensation is due pursuant to the contract. If the contract is silent, payment will be due no later than 30 days after completion of the worker’s services under the contract.
Once the worker has started performing the services under the contract, the hiring party cannot require as a condition of timely payment that the worker either accept less than the amount of compensation specified by the contract or provide more goods or services or grant more intellectual property rights than agreed to in the contract. We expect this provision in particular to be the subject of future litigation. In the meantime, this provision underscores that it will be critical to have a clearly and comprehensively drafted agreement in place.
The new law will prohibit the hiring party from discriminating against or taking adverse action against freelance workers for exercising their rights pursuant to the law.
Freelance workers will be allowed to enforce their rights under this statute in court and can be awarded attorney’s fees and costs if they are successful.
The law will apply to contracts entered into or renewed on or after January 1, 2025.
Prohibition on Mandatory Attendance at Employer-Sponsored Meetings Involving Political and Religious Matters
Pursuant to the new CA Worker Freedom from Employer Intimidation Act, employers will be prohibited from requiring employees to attend employer-sponsored meetings where the purpose of the meeting is for the employer to communicate their opinion on religious or political matters. The law contains a number of exclusions, including when the employer is communicating information that is necessary for employees to perform their jobs, and when the employer is a religious or political organization.
Workplace Violence Prevention Plan
As a reminder, consistent with SB 553, which was signed into law last year, the vast majority of CA employers were required to have developed a written workplace violence prevention program by July 1, 2024. The program needs to include a written plan along with employee training on the subjects below, among others:
- Procedures that involve employees in developing and implementing the plan, including through identifying, evaluating, and correcting workplace violence hazards, designing and implementing training, and reporting and investigating workplace violence incidents
- Procedures to accept and respond to reports of workplace violence, and to prohibit retaliation against reporters of workplace violence
- Procedures to communicate with employees regarding workplace violence matters and to alert employees of workplace violence emergencies
- Procedures to identify and evaluate workplace violence hazards and concerns
Employers are also required to keep records of workplace violence incidents.
Certain employers are exempt from some of these obligations, including some health care facilities, as well as places of employment where there are less than 10 employees working at the place at any given time and that are not accessible to the public. If you would like our assistance to prepare the required plan for your place of business, please contact us.
Mandatory Beneficial Ownership Information Filing Deadline – January 1, 2025
The vast majority of US companies are required to report information about their businesses to the US Treasury Financial Crimes Enforcement Network by no later than January 1, 2025. More information is available here.
New Compliance Obligations re Criminal Background Checks in LA County
Under existing CA law, most employers with 5 or more employees are prohibited from asking about or conducting a criminal background check until after a conditionaloffer of employment has already been made. Several cities and counties in CA have expanded upon this limitation, including the City of LA, which also requires most employers with 10 or more employees to affirmatively state in all job advertisements that the employer will consider qualified applicants with criminal histories in a manner consistent with applicable law.
The County of LA has recently issued its own Fair Chance Ordinance, which applies to most employers who are located in the unincorporated areas of LA County (ie, areas that don’t have their own city hall) and that have 5 or more employees. The ordinance imposes the following new obligations and prohibitions, among others:
- Covered employers will not be allowed to ask an applicant who has been offered a job about their criminal history until after the applicant receives a copy of their criminal history background check report
- Covered employers will be required to affirmatively state in job ads that the employer will consider qualified applicants with criminal histories in a manner consistent with the Los Angeles County Fair Chance Ordinance for Employers and the California Fair Chance Act
- Covered employers who will be running background checks must include in all job ads a list of all material duties of the job which the employer reasonably believes will be directly and adversely impacted by a criminal history and that would potentially result in withdrawing the conditional offer of employment
- Additional required language in conditional offer letters, including a statement that the employer has good cause to review criminal history information along with supporting justification for that good cause
- Covered employers will be required to conduct individualized assessments of the candidate’s criminal history and the sought-after position before rescinding a job offer, must provide their individualized assessment to the candidate in writing, and give the candidate an opportunity to respond
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Given the many legal changes going into effect next year, all California employers should update their handbooks and personnel policies to bring them into compliance for 2025. If you have any questions about these new laws or would like us to review or revise your handbooks, employment-related agreements, or other employment-related documentation to bring it up to date in light of the new legislation, please contact us. The new year is a good time to roll out handbook updates and implement other changes to your personnel practices.
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The above summary has been prepared for general informational purposes only and is not intended as legal advice.
Bernstein & Friedland, P.C. is a boutique employment law firm in Los Angeles specializing in wrongful termination, discrimination, harassment, retaliation, and unpaid wage and overtime matters. Please visit our website at www.laemploymentcounsel.com to learn more about us. We are here to support you if you have questions about any of the above or any other employment-related matters.
