As we approach the midyear point, we wanted to review some of the new employment laws that went into effect this year which impact most California employers. This is not intended to be an exhaustive list. Should you have any specific questions about any of these laws as it pertains to your organization, please let me know. We are here to help!
Minimum Wage and Salary Thresholds
- On January 1, 2025, statewide minimum wage increased to $16.50/hour for all employers regardless of size. Local cities and counties may adopt higher minimum wages which takes precedence over the state minimum wage.
o City of Novato has established different minimum wages based on the size of the employer:
§ For very large employers (100+ employees), minimum wage is $17.27/hour
§ For large employers (26-99 employees), minimum wage is $17.00/hour
§ For small businesses (1-25 employees), minimum wage is $16.42/hour
o San Francisco’s minimum wage is currently $18.67/hour and will increase to $19.18/hour on July 1, 2025.
o Emeryville’s minimum wage is $19.36/hour and will increase to $19.90/hour on July 1, 2025.
o Oakland’s minimum wage is $16.89/hour
o San Jose’s minimum wage is $17.95/hour
o Other exceptions: Certain fast food workers must be paid a minimum of $20.00/hour. Certain healthcare employees must be paid a minimum of $23.00/hour through June 30, 2025, which will then increase to $24.00/hour thereafter. On July 1, 2026, the healthcare minimum wage will increase to $25.00/hour.
- In order for exempt employees to maintain their exempt status (and avoid wage and hour requirements such as overtime pay), exempt employees must be paid a minimum salary of at least $68,640.00 / year in addition to meeting the exempt duties test.
o Minimum salary requirements for exempt employees are higher in cities where the minimum wage is higher. For example, beginning on July 1, 2025, exempt employees in San Francisco must be paid a minimum salary of at least $ 79,788.80 / year.
Changes to Leave Benefits
- Paid Family Leave: California employers can no longer require employees to use up to 2 weeks of accrued PTO or vacation time before they start receiving Paid Family Leave benefits from the EDD. (AB 2123)
- Domestic Violence/Crime Victims Leave: Employees may use Paid Sick Leave if employee or employee’s family member is a victim of an act of violence. Employers must allow leave under FEHA for this purpose and requires employers to provide reasonable accommodations for such employees, such as implementation of safety measures.
Protection for Independent Contractors and Freelancers
- Creates the Freelance Worker Protection Act and establishes minimum requirements for freelance contracts (SB988), such as having a written contract that includes:
o Each party’s name and mailing address,
o An itemized list of services that the freelancer will provide, including the value of the services and the method of compensation,
o The date by which the hiring party must pay the freelancer for services rendered, or if no specific date, the mechanism by which the date will be determined, and
o The date by which the freelance worker must submit a list of the services rendered under the contract to the hiring party to ensure timely payment.
o Companies must retain copies of contractors for a minimum of 4 years.
o Full payment must be made by the date specified in the contract, or within 30 days after work completion if no date is specified. A hiring party may not require a freelance worker to accept lower compensation than agreed upon in the contract as a condition of timely payment.
Discrimination
- Fair Employment Housing Act (FEHA) prohibits employers from discriminating 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. FEHA was amended to make it illegal to discriminate based on a combination of two or more protected characteristics.
- FEHA was amended to make it illegal for employers to require job applicants to have a driver’s license (certain exceptions apply if driving is one of a position’s job functions)
Workplace Restraining Orders
- Employers may now seek a temporary restraining order against an individual who has harassed their employees. This includes not only violence and threats of violence, but also harassment. This 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.”
Captive Audience Meetings
- Employers are now prohibited from holding mandatory meetings during working hours to discuss political or religious matters, including union organizing.