As California rolls out a plethora of new employment laws for 2025, employers face both opportunities and challenges in the new year. These legislative developments will impact workplace management and compliance strategies. For employers, understanding the implications of these laws is critical to minimizing risks and maintaining efficient business operations.
AB 1034, AB 2288, SB 92: Amendments to Private Attorney General Act
The Labor Code Private Attorney General Act of 2004 (PAGA) allows an aggrieved employee to file a civil lawsuit on behalf of themselves and other employees for violations of the Labor Code, enforcing penalties that would typically be collected by the Labor and Workforce Development Agency (LWDA). AB 1034, AB 2288, and SB 92 significantly modify the PAGA landscape. While these revisions provide some relief to employers from a widely abused law, it remains to be seen how effective the changes will be. The changes include:
- Extending the PAGA exemption for construction industry employees working under a collective bargaining agreement until January 1, 2038.
- Entitling employers, who employed at least 100 employees during the period covered by the PAGA notice, to request an early neutral evaluation conference (ENE) and stay of the court proceedings upon being served with a PAGA complaint. The ENE provides the opportunity for early evaluation of the existence of any alleged violations, whether any violations were cured and/or a proposal for curing any violations, the basis and merits of the claim, and early settlement, among other things, with oversight by the neutral evaluator and court.
- Modifying PAGA’s standing requirements. Previously, an employee had standing to pursue recovery for any Labor Code violation in existence, whether they personally suffered such a violation or not. The new amendment materially alters that, restricting an employee to pursuit of alleged violations that only he or she has personally suffered.
- Expanding the range of Labor Code sections that an employer can cure in response to a pre-suit PAGA notice.
- Codifying that a court may limit the scope of claims presented at trial to ensure cases can be managed effectively.
- Capping civil penalties in various scenarios, introducing higher penalties for employers who violate labor laws with malicious, fraudulent, or oppressive intent, and increasing the portion of recovered penalties to go to employees from 25% to 35%.
SB 988: Enactment of Freelance Worker Protection Act
SB 988 imposes new minimum requirements for contracts between hiring parties and freelance workers. A freelance worker is defined as an independent contractor hired to provide professional services for compensation of $250 or more. The new law requires contracts between hiring parties and freelance workers to be in writing and hiring parties to retain these contracts for at least four years. It also requires compensation to be paid by the date specified in the contract, or if no date is provided, within 30 days of the service's completion. The bill prohibits hiring parties from discriminating or retaliating against freelance workers who enforce their rights under these provisions. Freelance workers or public prosecutors may bring civil actions to enforce these requirements.
AB 2299: Updates to Whistleblower Protections Notice
Existing law requires employers to display a notice of employee’s rights and responsibilities regarding whistleblower protections, compliant with the substance and formatting requirements set forth in the Labor Code. AB 2299 requires the Labor Commissioner to develop a model notice and deems an employer compliant with the posting mandate if the employer displays that model notice. The model posting is available on the Labor Commissioner’s website (here).
AB 1870: Updates to Workers’ Compensation Notice
Existing law requires employers to post workers’ compensation notice in the workplace. AB 1870 requires employers to now include in that notice that an injured employee may consult with a licensed attorney under workers’ compensation law and that, in most instances, attorney’s fees will be paid from an injured employee’s recovery. A model notice is available on the Department of Industrial Relations website in English and Spanish (here). The notice must be posted in both English and Spanish where there are Spanish-speaking employees.
AB 2123: Changes Impacting Paid Family Leave
Existing law authorizes an employer to require an employee to take up to 2 weeks of earned but unused vacation before, and as a condition of, the employee’s initial receipt of state disability insurance benefits for paid family leave during any 12-month period in which the employee is eligible for these benefits. AB 2123 amends the law to make that authorization inapplicable to any disability commencing on or after January 1, 2025.
AB 2499: Expansion of Employment Protections for Victims of Violence
AB 2499 revises and recasts existing jury, court, and victim time off provisions as part of the Fair Employment and Housing Act (FEHA), which brings this issue within the enforcement authority of the Civil Rights Department (CRD). It prohibits employers from firing, discriminating, or retaliating against employees for taking time off to serve on a jury, or against an employee who is a victim for taking time off to appear in court to as a witness or to obtain relief (such as a restraining order). It also prohibits employers with 25 or more employees from firing, discriminating, or retaliating against an employee who is a victim or has a family member who is a victim for taking time off work relating to obtaining relief, medical attention, or relevant services for a family member who is a victim, participating in safety planning, relocating, and other related activities.
The bill also broadens the definition "victim" to include those affected by “qualifying acts of violence” and defines “family member” in line with the California Family Rights Act (CFRA). Additionally, it expands paid sick leave under the Healthy Workplace Healthy Families Act of 2014 to cover an employee’s family member who is a victim.
Employers must inform employees of their rights under these provisions upon hire, annually, at any time upon request by employees, and when notified that an employee or their family member is a victim. The CRD must develop a compliant form that an employer may use to comply with the notice requirements by July 1, 2025. The employer’s notice requirement does not commence until the CRD does so.
SB 1100: Expansion of Employment Protections Relating to Driver’s Licenses
SB 1100 amends the FEHA to prohibit employers from stating in job postings or other hiring materials that applicants must have a driver’s license unless certain conditions are met. Specifically, an employer must reasonably expect driving to be one of the job functions for the position and reasonably believe that use of an alternative form of transportation (such as, ride hailing service, taxi, carpooling, bicycling, or walking) would not be comparable in travel time or cost to the employer.
SB 399: Enactment of California Worker Freedom from Employer Intimidation Act
AB 399 adds a new chapter to the Labor Code that prohibits an employer from discriminating, retaliating, or taking any adverse action against an employee because the employee declines to participate in meetings or discussions with their employer regarding the employer’s views on religion, politics, and union representation. It also requires that an employee who at work at the time of the meeting and elects not to attend the meeting still be paid while the meeting is held.
Conclusion
The employment law and related reforms introduced by California this past legislative season reflect a continued emphasis on employee protections and workplace rights. While these changes present compliance challenges, they also provide an opportunity for employers to strengthen workplace policies and avoid potential disputes. Partnering with experienced defense attorneys is essential for navigating these complexities, ensuring compliance, and protecting your organization's interests in the evolving employment law landscape.