’Tis the Season for California’s 2025 Legislative Update: Employer Considerations

While employees are decorating, mulling over their New Year’s resolutions, and hunting for the best sales, California employers are turning their sights to the potential challenges awaiting them in the New Year. As new laws take effect, employers should consider updating their policies and practices to remain in compliance. This GT Alert summarizes some notable changes coming in 2025.1

Victims’ Time Off (AB 2499)

With this new law, jury, court, and victim time-off protections (originally found within the California Labor Code) will fall under the Fair Employment and Housing Act (FEHA). This change will allow employees to bring civil actions in court for violations of these provisions, rather than before the California Department of Labor Standards Enforcement. In addition, victim time-off protections will encompass new protections for “qualifying acts of violence” (replacing the slightly narrower protections for victims of “crime or abuse” and “domestic violence, sexual assault or stalking”). Under the new law, “qualifying acts of violence” include domestic violence, sexual assault, stalking, or any act, conduct, or pattern of conduct that includes (i) bodily injury or death to another; (ii) brandishing, exhibiting, or drawing a firearm or other dangerous weapon; or (iii) a perceived or actual threat to use force against another to cause physical injury or death. The law also prohibits discrimination and retaliation against any employee who participates in the legal process, including to take time off for jury service, to appear in court as a witness, and where they are a victim and take time off to obtain relief for their own or their child’s health, safety, and/or welfare.

For employers with at least 25 employees, these protections further expand to protect employees with a family member who is the victim of a qualifying act of violence and who takes time off for purposes related to that act, including:

• obtaining or attempting to obtain relief, such as a restraining order or other injunctive relief;
• seeking or obtaining medical attention for or to recover from injuries;
• seeking or obtaining services from a domestic violence shelter or similar victim-services organization;
• seeking or obtaining psychological counseling or other mental health services;
• participating in safety planning;
• relocating or engaging in the process of securing a new residence, including temporary or permanent housing or enrolling children in a new school;
• caring for a family member who is recovering from injuries;
• seeking or obtaining civil or criminal legal services;
• preparing for, participating in, or attending any civil, administrative, or criminal legal proceeding; or
• seeking, obtaining, or providing childcare or care to a care-dependent adult if necessary to ensure their safety.

While some of these purposes are already provided for under existing law, others will take effect Jan. 1 with this new law. Employers can limit the total leave time taken, and the amount depends on whether the victim is the employee (in which case leave may be limited to 12 weeks) or the employee’s family member (in which case leave may generally be limited to 10 days unless the victim is deceased as a result of the qualifying act of violence). As is the case with existing law, reasonable accommodations may also be required under the new law.

In addition, employers must permit employees to use available paid sick leave for matters relating to qualifying acts of violence, jury service, and to appear in court as a witness in response to a subpoena or other court order.

The California Civil Rights Department (CRD) will publish a new model notice regarding employees’ protections under AB 2499 by July 1, 2025. Once the CRD publishes that notice, employers must notify employees of their rights under this law. While employers are not required to use the CRD’s form notice, they must at least provide a notice substantially similar in content and clarity. Employers will be required to inform employees of their rights in writing at time of hire and upon request.

Employers should consider updating their policies to comply with these new requirements.

Driver’s License Requirement Prohibited in Job Postings (SB 1100)

SB 1100 amends the FEHA to prohibit statements in job advertisements, postings, applications, and other employment materials that an applicant must have a driver’s license, unless (1) the employer reasonably expects driving to be one of the job functions for the position, and (2) the employer reasonably believes that satisfying the job function using an alternative form of transportation would not be comparable in travel time or cost to the employer. “Alternative form of transportation” includes, but is not limited to, all of the following: (A) using a ride hailing service; (B) using a taxi; (C) carpooling; (D) bicycling; and (E) walking.

Covered employers should review their employment documents and job postings to ensure they do not reference a driver’s license requirement unless the requirement fits into the above exception.

Definition of ‘Race’ Expanded (AB 1815)

This new law removes the term “historically” from the definitions of race and expands the definition within the FEHA to include traits associated with race, including but not limited to, hair texture and protective hairstyles. “Protective hairstyles” includes, but is not limited to, hairstyles such as braids, locs, and twists.

Protections for Intersectionality (SB 1137)

The Unruh Civil Rights Act, the Education Code, and the FEHA will prohibit discrimination and harassment not only on the basis of individual protected traits but also on the basis of the intersectionality (e.g., a combination) of two or more protected traits. While not necessarily a change to existing law, this law codifies a Ninth Circuit court decision, Lam v. University of Hawai’i, 40 F.3d 1551 (9th Cir. 1994), holding that when an individual claims multiple bases for discrimination or harassment, it may be necessary to establish whether the discrimination or harassment occurred based on a combination of these factors, not just one protected characteristic. 

Increased Protections for Independent Contractors/Freelance Workers (SB 988)

This new law imposes minimum requirements relating to contracts entered into or renewed on or after Jan. 1, 2025, between a hiring party and a freelance worker, and provides new protections for freelance workers against retaliation. Under the law, a “freelance worker” refers to a person or organization composed of no more than one person, whether or not incorporated or employing a trade name, that is hired or retained as a bona fide independent contractor by a hiring party to provide “professional services” (as defined in California Labor Code Section 2778(b)(2)) in exchange for an amount equal to or greater than $250, either by itself or when aggregated with all contracts for services between the same hiring party and independent contractor during the immediately preceding 120 days. Notably, the definition excludes any “individual hiring services for the personal benefit of themselves, their family members, or their homestead.”

Specifically, any agreement between a hiring party and freelance worker must be in writing and include (1) names and addresses of both parties; (2) an itemized list of services, their value, and the compensation method; (3) payment due dates or mechanisms for determining them; and (4) due dates for the freelance worker to submit a list of services rendered under the contract to meet the hiring party’s internal processing deadlines for timely payment.

An aggrieved freelance worker can bring a civil action to enforce the Act, and a prevailing plaintiff will be entitled to reasonable attorneys’ fees and costs, injunctive relief, and damages as follows:

• If the freelance worker requests a written contract prior to commencing work and the hiring party refuses, the freelance worker shall be awarded an additional $1,000.
• If the hiring party fails to pay the freelance worker the contracted compensation on or before the date the contract specifies, or, if the contract does not specify a date, within 30 days of job completion, the freelance worker shall be awarded damages up to twice the remaining unpaid amount. If the freelance worker requests a written contract before commencing work and the hiring party refuses, the amount unpaid shall be determined by the rate the freelance worker reasonably understood to apply to the work.
• If the hiring party violates any other provision of the law, the freelance worker may be awarded damages equal to the value of the contract or the work performed, whichever is greater.

There are also new record retention requirements, as hiring parties must retain contracts for no less than four years.

Protections Regarding ‘Digital Replicas’ in the Entertainment Industry (AB 2602)

AB 2602 aims to protect performers, especially in the entertainment industry, from AI replicating their likeness or voice without their consent. Starting Jan. 1, 2025, contract clauses allowing AI-generated replicas of a performer will be unenforceable if all the following conditions are met:

• The AI replica is used instead of the performer’s actual in-person work.
• The contract does not clearly describe how the AI replica will be used. 2
• The performer did not have proper representation when agreeing to the use of their digital replica. This means either

– they did not have a lawyer negotiate the terms, which must be clearly stated in a contract signed or initialed by the individual, or

– they were not represented by a union with a collective bargaining agreement that specifically covers the use of digital replicas.

This law seeks to ensure performers have a say in how the industry creates and uses AI versions of them, preventing unauthorized digital replications of their work.

As used in this law, “digital replica” refers to a computer-generated, highly realistic electronic representation readily identifiable as the voice or visual likeness of an individual embodied in a sound recording, image, audiovisual work, or transmission in which the actual individual either did not actually perform or appear, or the actual individual did perform or appear, but the fundamental character of the performance or appearance has been materially altered. “Digital replica” does not include the electronic reproduction, use of a sample of one sound recording or audiovisual work into another, remixing, mastering, or digital remastering of a sound recording or audiovisual work the copyright-holder authorized.

Protections Regarding ‘Digital Replicas’ of Deceased Performers (AB 2602)

AB 1836 amends the Civil Code relating to intellectual property and generally prohibits commercial use of digital replicas of deceased performers in film, TV shows, video games, audiobooks, and sound recordings, etc., without first obtaining those performers’ estates’ consent. Violators will be liable to the injured party or estate in an amount equal to the greater of $10,000 or the actual damages the rightsholder suffered.

The bill exempts certain specified uses generally protected under the First Amendment, including using digital replicas (i) in connection with news reports, (ii) for purposes of comment, criticism or parody, (iii) in a fleeting or incidental manner, and (iv) for historical or biographical purposes (so long as the use does not falsely imply that the replica is an authentic recording of the personality).

Employee Rights and Responsibilities Poster Requirement (AB 2299)

This new law requires all California employers to post a notice outlining employee rights and responsibilities under existing whistleblower laws. That notice must be in a font larger than 14 point and contain the whistleblower hotline number for the California State Attorney General’s office. The California Labor Commissioner has developed a model notice and employers displaying this notice will be deemed compliant with state posting requirements.

Under existing law, employers must post general workplace notices about whistleblower protections, but no specific notice from the Labor Commissioner is mandated. AB 2299 codifies the requirement for the Labor Commissioner to create a compliant model notice to eliminate uncertainty and ensure consistency in how whistleblower rights are communicated in the workplace.

Changes to Workers’ Compensation Notices (AB 1870)

Under existing law, employers must display a workers’ compensation informational poster in a conspicuous location that employees frequent. They are also required to provide new hires with a workers’ compensation pamphlet outlining their rights and benefits at hire or by the end of the first pay period. Under this new law, California employers are required to update their workers’ compensation notices to inform employees of their right to consult a licensed attorney about their workers’ compensation rights. The notice must also state that attorney’s fees may be paid from the employee’s recovery if they pursue a claim pursuant to their workers’ compensation rights. The California Department of Industrial Relations has updated the Notice and Time of Hire Pamphlet provided to employees.

Notably, AB 1870’s provisions do not apply to certain employee categories defined under Labor Code Section 3351(d), including domestic workers employed by households, family members working for family-owned businesses, individuals in certain work training or rehabilitation programs, and certain volunteers.

Paid Sick Leave for Agricultural Employees (SB 1105)

California’s existing paid sick leave law will expand to allow agricultural employees who work outside to use their currently entitled paid sick leave to avoid smoke, heat, or flooding conditions created by a local or state emergency, including but not limited to when the employee’s worksite is closed due to the smoke, heat, or flooding conditions. According to the new law, there are “smoke, heat, or flood conditions created by a local or state emergency” if the governor proclaims a state of emergency pursuant to California Government Code section 8625, or a local emergency is proclaimed pursuant to Government Code section 8630 due to smoke, heat, or flooding conditions that prevent agricultural employees from working.

Vacation and Paid Family Leave Benefits (AB 2123)

Employers may no longer require employees to take up to two weeks of earned and unused vacation before the employee’s initial receipt of paid family leave benefits during any 12-month period in which employees are eligible for these benefits.

Ban on Captive Audience Meetings (SB 399)

For a dedicated discussion, please see our team’s Nov. 6 blog post.

PAGA Exemption for Construction Industry Workers (AB 1034)

AB 1034 extends the exemption from the California Private Attorneys General Act (PAGA) for certain construction industry employees until Jan. 1, 2038. This extension applies to employees covered by a collective bargaining agreement (CBA) in effect before Jan. 1, 2025, provided the CBA meets specific criteria.

To qualify, the CBA must define wages, hours of work, and working conditions; provide premium pay for overtime; and ensure an hourly wage at least 30% above the state minimum wage. It must also bar California Labor Code violations that are redressable under PAGA, provide a grievance and binding arbitration process for resolving those disputes, include a clear and explicit waiver of PAGA’s requirements, and authorize arbitrators to award any remedies available under the California Labor Code, except for penalties payable to the Labor Workforce Development Agency.

PAGA Reform (SB 92 and AB 2288)

On July 1, 2024, AB 2288 and SB 92 were signed into law as urgency statutes, taking effect immediately. However, the new amendments apply only to civil actions where the required PAGA notice was filed on or after June 19, 2024.

These reforms change California’s PAGA landscape, reshaping how claims are brought and defended. Plaintiffs must now personally experience the Labor Code violations they seek to enforce, with a one-year statute of limitations applying to establish standing. Additionally, courts have codified authority to limit evidence or narrow the scope of claims to ensure trial manageability and promote more efficient and focused litigation.

Earlier this year, our colleagues charted the text of AB 2288 and SB 92. For further details on the specific changes to PAGA, see our June 2024 blog post.

CAL/OSHA Indoor Heat Rule

On July 23, 2024, Cal/OSHA’s Indoor Heat Illness Prevention Standard took effect. See July 1 blog post. The rule applies to most California workplaces where indoor temperatures reach 82°F or higher, requiring employers to take specific measures to protect workers from heat illness.

Covered workplaces include restaurants, warehouses, and manufacturing facilities where indoor temperatures frequently rise. However, the standard does not apply to prisons, local detention and juvenile facilities, telework locations outside employer control, or emergency operations protecting life or property.

Covered employers must implement several key measures to comply. These requirements include, but are not limited to:

• Heat Illness Prevention Plan: Establish and maintain a written plan detailing procedures for providing water, cool-down areas, training, and emergency aid.
• Cool-Down Areas: Provide easily accessible, open-air, or ventilated areas shielded from heat sources.
• Drinking Water: Ensure employees always have access to potable drinking water.
• Health Monitoring: Observe employees for signs of heat illness, especially during acclimatization. Employees showing symptoms cannot be ordered back to work until at least five minutes have passed since the last observed symptom.
• Supervisor Training: Train supervisors on recognizing and responding to heat illness symptoms, including activating emergency procedures.
• Reporting Time Pay: Pay nonexempt employees at least half of their scheduled work hours if excessive heat suspends operations.

The standard includes several exceptions. It does not apply where employees experience incidental heat exposure between 82°F and 95°F for less than 15 minutes in any 60-minute period, excluding vehicles without functional air conditioning. Teleworking employees outside employer-controlled environments and those engaged in emergency operations directly protecting life or property are also exempt.

While many requirements mirror Cal/OSHA’s outdoor heat illness standard, the indoor rule introduces additional temperature monitoring obligations. Employers must measure and record the greater of the temperature or heat index when temperatures reach 87°F, or 82°F in high-radiant-heat or restrictive-clothing work environments.

Non-compliance with Cal/OSHA's indoor heat illness regulations may result in significant penalties. Regulatory or general violations carry fines of up to $15,873 per violation. Willful or repeat violations may cost employers up to $158,727 per violation. Serious violations may result in fines up to $25,000 per violation, depending on specific circumstances. Additionally, failure to provide a required cool-down rest period will result in one hour of premium pay at the employee’s regular rate for each missed recovery period, as mandated by California Labor Code Section 226.7.

Employers should review their workplace heat illness protocols to enhance compliance and avoid costly penalties.

OSHA Certification Requirements for Live Entertainment Events (AB 2738)

Vendors involved in live entertainment event set-ups, operations, and teardowns must meet strict training and certification standards:

• Employee Training: Employees must complete Cal/OSHA-10, OSHA-10/General Entertainment Safety, or industry-specific OSHA-10 training.
• Department Heads or Vendor Certification: Department heads must complete Cal/OSHA-30, OSHA-30/General Entertainment Safety, or equivalent training, or vendors must certify in writing that all employees and subcontractors are fully trained.

Contracts between vendors and event venues must also (1) specify the names of employees and subcontractors involved; and (2) provide details of completed training and certifications.

Violations are enforced through citations and civil penalties under Labor Code Section 6317, with appeal rights available under Section 6319. Penalties apply to vendors, venues, and contracting entities, though individual employees are exempt from liability. Alternatively, prosecutors may pursue enforcement by seeking injunctive relief and imposing fines of up to $500 per violation, bypassing the standard enforcement and appeals process. Courts may award reasonable attorney’s fees to prevailing plaintiffs.

The law remains in effect until Jan. 1, 2029, with ongoing applicability for any actions filed before the repeal date.

AB 5 Exemption Extension for Newspaper Distributors and Carriers (AB 224)

AB 224 extends the exemption from California’s “ABC” test for classifying workers as employees under AB 5 for newspaper distributors and carriers until Jan. 1, 2030. During this period, these workers may continue to be classified as independent contractors if the more flexible multi-factor Borello test is satisfied.

The bill also extends annual reporting requirements for newspaper publishers and distributors that hire or contract with newspaper carriers. From 2025 through 2029, they must report payroll taxes, wage rates, and wage claims to the Labor and Workforce Development Agency (LWDA), continuing the reporting obligations previously required for 2022, 2023, and 2024.

‘ABC’ Exemption Sunsets for Certain Workers

The exemptions from California’s “ABC” test for classifying workers as employees under AB 5 will expire for workers in licensed manicurist roles and certain subcontractors providing construction trucking services. Employers should evaluate worker classifications to comply with California labor laws.

Labor Contracting Law for Port Drayage Motor Carriers (AB 2754)

AB 2754 amends Sections 2810 and 2810.4 of the California Labor Code to extend labor contracting compliance requirements to port drayage motor carriers.3 Previously, these rules applied only to the construction, farm labor, garment, janitorial, security guard, and warehouse industries. The amendment includes port drayage motor carriers, except for contracts involving 30 days or fewer of cumulative labor or services within a one-year period.

The law prohibits contracts in covered industries from lacking sufficient funds to comply with labor laws. A rebuttable presumption that no violation has occurred exists if contracts meet specific criteria, such as being in a single document and listing all relevant local, state, and federal contractor license identification numbers required by law. Port drayage motor carriers must now adhere to these standards or face shared civil liability for driver misclassification and other labor law violations.

Transparency Requirements for Social Compliance Audits (AB 3234)

Employers that voluntarily undergo a social compliance audit to determine whether child labor is involved in their operations will now be required to post a link to the audit’s findings on their company website. A social compliance audit is defined as a voluntary, nongovernmental inspection or assessment of an employer’s operations and practices to verify compliance with labor laws, including child labor regulations.

The posted compliance report must include

• the date, time, and shift (day or night) when the audit was conducted.
• whether the employer engages in or supports child labor.
• copies of the employer’s written policies and procedures on employing minors.
• any hazardous or unsafe workplace conditions affecting children’s health and development.
• whether children work outside regular school hours or during night shifts.
• a disclaimer stating that the auditing company is not a government agency and lacks legal authority to verify compliance with labor laws.

The new law does not require employers to conduct a social compliance audit relating to child labor, but if they choose to do so, employers must comply with the requirements summarized above.

Minimum Wage Increases

Proposition 32 did not pass in California, meaning that effective Jan. 1, 2025, the state minimum wage will increase to $16.50 per hour for both small and large California employers. This also means that the new state salary basis threshold for most California exemptions will increase to $68,640 per year ($5,720/month).

In addition, the minimum annual salary for computer professionals paid on a salary basis increases from $115,763.35 to $118,657.43; the new minimum hourly rate of pay for licensed physicians and surgeons paid an hourly rate increases from $101.22 to $103.75; and the new minimum wage rate to qualify for the collective bargaining exemption rises to $21.45 per hour.

Healthcare and fast-food employers should keep in mind, however, that their employees may be subject to a higher minimum wage under broad new laws that took effect April 1, 2024, (for fast-food workers) and Oct. 16, 2024, (for healthcare workers), and discussed in our December 2023 GT Alert. The Department of Industrial Relations has released guidance for employers: see health care minimum wage FAQ and fast food minimum wage FAQ, and supplemental minimum wage notices are required to be posted in the workplace next to the statewide minimum wage notice.

1 Unless otherwise noted, the new laws will take effect Jan. 1, 2025.

2 However, the failure to include a reasonably specific description of the intended uses of a digital replica does not render the provision unenforceable if the uses are consistent with the terms of the contract for the performance of personal or professional services and the fundamental character of the photography or soundtrack as recorded or performed.

3 Port drayage motor carrier: (A) An individual or entity that hires or engages commercial drivers in the port drayage industry; (B) a registered owner, lessee, licensee, or bailee of a commercial motor vehicle, as defined in subdivision (b) of Section 15210 of the Vehicle Code, that operates or directs the operation of a commercial motor vehicle by a commercial driver on a for-hire or not-for-hire basis to perform port drayage services in the port drayage industry; or (C) an entity or individual who succeeds in the interest and operation of a predecessor port drayage motor carrier consistent with the provisions of Section 2684.