With a new year comes new laws and updates to existing laws. At Kalia Law, we help our clients stay abreast of changes to California employment law. Here’s what you need to know for 2025.
Updates for Minimum Wage, Salary Basis Threshold, and IRS Mileage Reimbursement Rates in 2025
As of January 1, 2025, several key updates will take place regarding minimum wage, salary requirements for exempt employees, and mileage reimbursement rates in California.
Increased Minimum Wage Requirements
California’s statewide minimum wage for all employers will increase to $16.50 per hour. However, many cities and counties in California have local minimum wage requirements that exceed the state minimum. While most local increases occur in July, several jurisdictions will see increases effective January 1, 2025. Notable examples include:
- Burlingame: $17.43
- Los Altos: $18.20
- Menlo Park: $17.10
- Oakland: $16.98
- Palo Alto: $18.20
- Redwood City: $18.20
- City of San Diego: $17.25
- City of San Mateo: $17.95
- County of San Mateo (unincorporated areas): $17.46
- City of Sonoma (for employers with less than 26 employees): $16.96
- South San Francisco: $17.70
- West Hollywood: $19.65
Remember that employees must be paid the highest applicable minimum wage for the jurisdiction where they work. This is particularly relevant for remote workers whose local minimum wage may differ from their employer’s primary location.
Salary Basis Threshold for Exempt Employees
For employees to be classified as exempt in California (and therefore ineligible for overtime), their salary must equal at least two times the state minimum wage for full-time work. With the 2025 minimum wage increase, the annual salary threshold for exempt employees will rise to $68,640. Employers must also ensure exempt employees meet all other legal criteria for exemption, which should be evaluated with legal counsel.
Mileage Reimbursement Rate
The IRS has set the 2025 business mileage reimbursement rate at 70 cents per mile, reflecting an adjustment for current economic conditions.
Updates to California Discrimination Laws
California employers should take note of three significant updates to the state’s discrimination laws:
Recognition of Intersectionality in Discrimination Claims
California has become the first jurisdiction to explicitly incorporate the concept of intersectionality into its discrimination laws. This approach acknowledges that discrimination can occur based on a combination of protected characteristics rather than each characteristic being considered in isolation. The law highlights the unique “interlocking forms of discrimination and harassment” experienced by individuals, particularly Black women, compared to Black men or White women. While the law applies broadly to all combinations of protected characteristics, it is a step toward addressing systemic inequalities in the workplace.
Expanded Protection for Traits Associated with Race
In 2020, California took a progressive step by prohibiting discrimination based on “traits historically associated with race,” such as hair texture and protective hairstyles. This year, the law has been updated to eliminate the word “historically,” expanding the scope of protection to include additional traits associated with race (not just hairstyles), further ensuring that employees are safeguarded from race-based discrimination.
Driver’s License Requirement Prohibited for Certain Job Applications
Employers in California can no longer require job applicants to provide a driver’s license unless driving is an essential function of the position and no other forms of transportation are feasible. This change aims to eliminate unnecessary barriers for applicants and ensure hiring practices are fair and inclusive.
Employers should review their policies and practices to ensure compliance with these updated anti-discrimination laws.
Expanded Protections for Crime Victims and Sick Leave in California
Governor Newsom recently signed a bill enhancing workplace protections for employees who are victims of crime or abuse. The law redefines eligibility, expands reasons for protected time off, and shifts enforcement authority to the Civil Rights Department.
Under the law, employers must provide time off for victims of “qualifying acts of violence” (QAV), which include:
- Domestic violence
- Sexual assault
- Stalking
- Acts involving bodily harm, weapon use, or threats of physical injury
Employers are also prohibited from retaliating or discriminating against employees for:
- Serving on a jury with advance notice to the employer
- Appearing in court as a witness under subpoena
- Seeking restraining orders or legal protections to ensure safety for themselves or their children
Additionally, California’s paid sick leave law has been updated to allow employees to use sick leave to assist family members who are victims of violent incidents or threats. Employers will need to review policies to comply with these expanded protections.
Captive Meetings Ban Pending Lawsuit
The California Worker Freedom from Employer Intimidation Act prohibits employers from retaliating against, discriminating against, or threatening employees who refuse to attend employer-sponsored meetings related to religious or political matters or union-related decisions. This law was set to take effect on January 1, 2025.
However, a lawsuit filed on December 31, 2024, by the California Chamber of Commerce and the California Restaurant Association challenges the law, arguing that it violates companies’ rights to free speech and equal protection under the 1st and 14th Amendments. The lawsuit seeks to block the law from being enforced. Employers planning such meetings should consult legal counsel to stay informed about the law’s current status.
Expansion of the Freelance Worker Protection Act
Starting this year, the statewide Freelance Worker Protection Act expands protections for independent contractors across California. Hiring parties must now provide a signed written contract (physical or electronic) to freelancers containing the following:
- Names and addresses of both parties
- An itemized list of services, including their value, rate, and payment method
- Payment terms or deadlines
- Deadlines for freelancers to submit service lists to meet payment schedules
Contracts must be retained for at least four years. Employers who hire freelancers should review their practices to ensure compliance with this law.
New Background Check Laws
Two new jurisdictions, unincorporated Los Angeles County and San Diego County, have introduced fair chance background check laws. Employers in these areas should review the specific regulations to ensure compliance.
CalSavers Retirement Program Deadline
California’s CalSavers program requires all employers without workplace retirement plans to register by December 31, 2025. Employers must either facilitate employee participation in CalSavers or certify exemption if they provide their own retirement plan. Noncompliance may result in penalties.
Questions About New or Updated California Employment Laws? Contact Kalia Law Today
If you have questions or concerns about how these laws or updates impact your business, contact our office today at (650) 701-7617 or online. We can help ensure your business is compliant and work through any necessary policy changes with you.
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