Important Employment Law Updates - What’s New for 2025

As we step into 2025, it’s time for employers to stay ahead of the latest labor and employment law changes. Keeping up with new regulations is essential to maintaining compliance and avoiding potential risks. This year, California businesses will see several key updates that could impact their operations. Let’s break down the most important changes to be aware of in 2025.

Wage & Hour Updates

Wage and hour issues remain a top area for litigation in California, especially class action lawsuits, so if you haven’t done a comprehensive check of your pay practices lately, now is the time.

California Minimum Wage Increase

Effective in 2025, California’s minimum wage is scheduled to increase to $16.50 per hour to adjust for inflation. While the effective date may shift to July 1, 2025, we encourage employers to plan ahead for this wage bump as soon as the final date is confirmed.

Additionally, exempt employees’ minimum salary will rise to $68,640 per year (or $5,720 per month). Remember: not all salaried employees automatically qualify as exempt; they must meet specific duties tests under California law.

Local Minimum Wage Increases

Many city and county jurisdictions have their own minimum wage ordinances—some exceed the state rate. Double-check if any of your employees work in these areas. The rates listed below become effective in 2025:

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See the full list of minimum wage increases and effective dates on the Mitzel Group website.

Overtime-Exempt Computer Professionals & Physicians/Surgeons

Computer professionals and physicians/surgeons paid on a salary or hourly basis will see updated minimum pay thresholds due to annual inflation adjustments.

• Computer professionals’ minimum annual salary: $118,657.43
• Hourly rate for computer professionals: $56.97
• Hourly rate for physicians/surgeons: $103.75

If your organization employs people in these classifications, ensure compensation meets or exceeds these thresholds.

Fast Food Minimum Wage Adjustments

Pending certain legislative or referendum outcomes, a new Fast Food Council may increase the minimum wage for fast food workers by the lesser of 3.5% or the rate of inflation for urban wage earners (U.S. CPI-W). This could also include region-specific wage standards.

Expanded Protections

CA Prohibits Intersectional Discrimination (SB 1137)

California’s Fair Employment and Housing Act (FEHA) now explicitly prohibits discrimination or harassment based on a combination of two or more protected characteristics (e.g., race + gender or age + disability). Update your anti-discrimination policies and trainings to address these overlapping protections.

CA Amends Hairstyle Discrimination Law (AB 1815)

California continues to expand its protections against race-based hair discrimination by removing the word “historically” from the definition of race. Any trait associated with race, including hair texture and protective hairstyles, is now protected under the law—regardless of historical context. Make sure your dress code and grooming policies comply.

CA Restricts Driver’s License Requirements (SB 1100)

You cannot require a driver’s license for a job unless driving is an essential function and no other form of transportation would work comparably. Review your job postings and descriptions to ensure a driver’s license requirement is included only when necessary.

CA Whistleblower Posting (AB 2299)

All California employers must post a notice explaining employees’ whistleblower rights and responsibilities. Ensure you have the most up-to-date poster visibly displayed, and take care to avoid any policies that discourage employees from reporting concerns.

CA Employee Protections Against Captive Audience Meetings Take Effect (SB 399)

Employers may not penalize employees who refuse to attend mandatory employer-sponsored meetings on political or religious matters—this includes discussions about unionization. Train managers to avoid scheduling or pressuring employees to attend these “captive audience” meetings.

CA Amends Workplace Violence Restraining Order Law (SB 428)

Workplace Violence Restraining Orders (WVROs) now cover harassment in addition to violence or threats. Employers can seek a TRO for employees who experience harassment. Document and address any potential workplace violence risks promptly.

CA Anti-Preemption Law (SB 1340)

Local agencies now have expanded authority to enforce anti-discrimination laws if their protections are at least as strong as the state’s. This may lead to additional compliance demands at the city/county level. Stay informed on local anti-discrimination ordinances and update your policies and training accordingly.

Leaves Of Absence

CA Amends Paid Family Leave (AB 2123)

Employers cannot require employees to use their vacation or PTO before receiving CA Paid Family Leave benefits. You may still offer employees the choice to use paid time off to supplement PFL benefits. Confirm your leave policies and ensure you’re not mandating PTO usage prior to PFL.

CA Amends Protections For Crime Victims (AB 2499)

The state expands paid sick and safe leave for employees or their family members who are victims of certain violent acts. Larger employers (25+ employees) may be required to provide extended leave for medical or legal needs. Be sure to display updated notices on these rights and train management on how to handle leave requests related to victim status.

CA Paid Family Leave Benefits Increase (SB 951)

Effective in 2025, CA PFL wage replacements increase to 70%–90% of an employee’s average weekly earnings, depending on the employee’s income level. This change helps employees who take time off to care for family members or bond with a new child.

Employee Classifications

CA Sunsets Independent Contractor Exemptions For Certain Workers

Starting January 1, 2025, exempt roles for newspaper distributors, carriers, certain manicurists, and construction trucking subcontractors will end. These workers must meet the “ABC” test to remain independent contractors. Plan now to convert any affected roles to employees if they cannot satisfy all three prongs of the test.

Consumer Privacy

CA Amends Definition Of Sensitive Personal Information (SB 1223)

The California Consumer Privacy Act (CCPA) will now include “neural data” as sensitive personal information. If your business uses biometric devices or other neurotechnology, you must treat this data with the same protections required for other highly sensitive information.

CA Clarifies Personal Information Definition (AB 1008)

Any data—whether digital, physical, AI-generated, or encrypted—qualifies as “personal information” under the CCPA. Update your privacy and data handling policies to reflect this broader definition.

CA Expands Opt-Out Rights (AB 1824)

Successor businesses (e.g., post-merger/acquisition) must honor previous consumer opt-outs. Carefully track all opt-out requests during any business transaction to avoid privacy violations.

Miscellaneous New Laws

• Disclosure Of Voluntary Child Labor Audits (AB 3234): Must publicly report findings if you’ve participated in a voluntary audit on child labor.
• Digital Replica Usage In Employment Agreements (AB 2602): Prohibits clauses allowing the creation or use of digital replicas (AI-generated, etc.) of an individual’s voice or likeness in place of in-person work.
• Association Health Plans (AB 2434): Allows small employers in certain associations to access large-group health plans under specific ERISA conditions.

Laws Effective July 1, 2025

Health Insurance Coverage For Infertility (SB 729)

New or renewed group health plans must cover infertility diagnosis and treatment, including certain in vitro fertilization (IVF) procedures. Check with your plan administrator for required changes.

Health Care Worker Minimum Wage Increases

Covered facilities must pay healthcare employees a new, tiered minimum wage, with larger facilities/integrated systems at $24/hour and clinics/other facilities at $21/hour. A monthly salary alternative may apply at 150% of the hourly rate or 200% of the standard minimum wage, whichever is greater.

Note: Implementation recently shifted from June 1, 2025, to July 1, 2025.

Laws Effective December 31, 2025

CalSavers Registration For Employers With 1–4 Employees (SB 1126)

If you have one or more employees and do not offer a retirement plan, you must register for CalSavers by December 31, 2025. Plan ahead and familiarize yourself with the program requirements now to avoid a last-minute scramble.

PAGA Reform

As of July 1, 2024, the Private Attorneys General Act (PAGA) will undergo significant changes for claims filed on or after June 19, 2024. Key highlights include revised standing requirements, more opportunities to “cure” potential violations, and adjusted penalties. The most common violations relate to wage and hour issues:

• Employee classifications (exempt vs. non-exempt)
• Meal and rest periods
• Overtime and regular rates of pay
• Paystub accuracy

Proactively auditing your pay practices and maintaining compliant, written policies can help mitigate PAGA risks and potential lawsuits.

Next Steps

Staying on top of these legal updates is crucial for maintaining a compliant, productive workplace. We strongly recommend reviewing your policies, pay practices, and training programs to ensure you’re ready for these changes. If you have any questions about how these laws may affect your business, feel free to reach out to Premier Talent Partners or consult with trusted legal counsel like The Mitzel Group.

Disclaimer: This blog post is intended for general informational purposes only and does not constitute legal advice. Always consult with an attorney for guidance specific to your situation.