California Labor Law Updates: What Employers Need to Know for 2025
California HR Changes for 2025
California labor laws are evolving rapidly, and staying compliant is more critical than ever for employers. From updated wage requirements to new leave policies, these changes can significantly impact your business. Here are the top 5 labor law updates for 2025 and actionable steps to keep your business ahead.
1. Minimum Wage Increase
Effective January 1, 2025, California's state minimum wage increases to $16.50 per hour for all employers, regardless of size. This change also raises the minimum salary threshold for exempt employees to $68,640 annually. Employers must ensure their payroll systems reflect this adjustment to avoid penalties.
Next Step:
Check California city-specific minimum wages for 2025 here
Review job descriptions to ensure they meet exempt classification definitions. Learn more here.
If January 1 falls mid-pay period, ensure compliance with one of these options:
Apply the new wage to all hours worked during the pay period.
Adjust the new wage only for hours worked after January 1.
If job descriptions don’t meet exempt requirements, consult legal counsel to explore options such as:
Changing employees from exempt to non-exempt in 2025.
Checking for role redundancy.
Updating job descriptions to reflect actual duties and revisiting exempt status definitions.
2. Paid Family Leave (PFL) Access
Employers can no longer require employees to use accrued vacation time before accessing California Paid Family Leave (PFL) benefits. This law ensures workers can immediately use PFL for family bonding, caregiving, or military family leave. (Reference: AB 2123, signed September 2024.)
Next Steps:
Update your employee handbook to reflect this requirement.
Inform your team about the process change.
Align your leave of absence administrator and payroll provider to ensure compliance.
Note: Vacation is not required, but sick time is mandatory. Review California’s FAQ on [Vacation Time Policies].
3. Expanded Protections for Crime Victims
Starting January 1, 2025, employees who are victims of certain crimes—or those assisting affected family members—are entitled to expanded unpaid leave. (Reference: AB 2499, signed September 2024.)
Next Steps:
Update your employee handbook with this requirement.
Train managers to handle sensitive leave requests appropriately.
Annually communicate to your team who they should approach with such requests (especially if you don’t have a dedicated HR team).
For more detailed insights, check out [Jackson Lewis' blog post on this topic].
4. Workplace Violence Prevention Plans
Employers must implement workplace violence prevention plans, including hazard identification, corrective measures, and employee training. Non-compliance can result in steep fines.
Next Steps:
Use free resources from CAL-OSHA [here].
Involve team members in creating procedures to foster a collaborative approach.
Regularly review and update your plan for continued compliance.
5. Pay Contractors On Time
California law now mandates that independent contractors (1099 workers + LLCs) are paid according to their contract terms. This ensures timely compensation and reduces the risk of disputes. (Reference: SB 988, signed September 2024.)
Next Steps:
Pay contractors promptly or negotiate new terms for 2025.
If immediate payment isn’t feasible, amend the contract to reflect realistic payment timelines.
Ensure adherence to the ABC test for worker classification.
Avoid penalties by maintaining timely payments and clear contracts.
Why These Changes Matter
Your compliance with these laws directly impacts the trust and engagement of your workforce. Proactively adapting to these changes demonstrates your commitment as a responsible and involved employer.
Remember: “I didn’t know” doesn’t excuse non-compliance in labor law—just like it doesn’t work for a speeding ticket.
Need Help Navigating These Changes?
Managing compliance can feel overwhelming. That’s where we come in. Our Policy and Procedure Maintenance 2025 program offers:
Tailored compliance solutions for your unique business needs.
Quarterly updates on city, state, and federal labor law changes.
A comprehensive Employee Handbook (PDF and Virtual Link), updated continuously for 12 months.
Plus:
Translation services (additional cost).
Triple policy checks through our partnerships with Jackson Lewis and BLR.
Let’s make 2025 your year we take compliance OFF your todo list!