California Employment Law Legislative Update: What Employers Need To Know For 2025

Now that Governor Gavin Newsom's September 30th deadline to approve or veto legislative bills has passed, California employers can begin preparing for the new laws...
United States California Employment and HR

Now that Governor Gavin Newsom's September 30th deadline to approve or veto legislative bills has passed, California employers can begin preparing for the new laws that will affect their workplaces next year. The recent legislative session has yielded strengthened protections for workers in a diverse array of subject areas, including but not limited to union organization, freelance work, anti-discrimination, paid family leave, and artificial intelligence. The new laws go into effect January 1, 2025. To help employers stay ahead of the curve, we have highlighted the most significant employment laws signed into law below. We encourage employers to consult with legal counsel to ensure compliance.

SB 399: Ban on religious, political, and anti-union captive audience meetings

Governor Newsom approved this bill, which adds the "California Worker Freedom from Employer Intimidation Act" to the labor code. Subject to certain exceptions, the act prohibits employers from taking or threatening to take adverse action against an employee who declines to attend a meeting or participate in, receive, or listen to its opinion on "religious" or "political" matters, which includes union organizing. Violations are subject to a civil penalty and the act will be enforced by the Labor Commissioner or alternatively, a civil action. This legislation follows a trend set by other states to ban so-called "captive audience meetings." Legal action based on First Amendment and National Labor Relations Act preemption arguments may soon follow in the wake of this significant new law.

SB 988: Increased protections for independent contractors

This bill, called the "Freelance Worker Protection Act," creates protections for independent contractors in the private sector who are paid at least $250 for their services. The bill requires that workers be paid on or before the date in their contract or in the absence of a contractual date, no later than 30 days after completion of services and prohibits conditioning payment on accepting less compensation or making certain changes to the contract. It also requires a written contract between the hiring party and the worker, which the hiring party must retain for four years. The hiring party is also prohibited from taking adverse action against a worker for exercising their rights under this bill and either the worker or a public prosecutor may bring a civil action as enforcement.

AB 2299: Employee rights and responsibilities and poster requirement

Governor Newsom signed AB 2299 on July 15, 2024. AB 2299 requires the state's Labor Commissioner to develop a model list of employee rights and responsibilities under existing whistleblower laws. Beginning January 1, 2025, employers will be required to post the specific notice drafted by the Labor Commissioner outlining these rights and responsibilities.

SB 1100: Driver's license requirement prohibited in job postings

The enactment of SB 1100 now makes it an unlawful employment practice for employers to state "in a job advertisement, posting, application, or other material" that job applicants must possess a driver's license. There is an exception where driving is one of the job functions of the position, and using an alternative form of transportation would not be comparable to driving in terms of travel time or cost to the employer.

SB 1137: Protection for intersectionality of protected characteristics

On September 27, 2024, Governor Newsom signed SB 1137, which provides clarification that the Unruh Civil Rights Act, the Education Code, and the California Fair Employment and Housing Act (FEHA) prohibit discrimination not only on the basis of individual protected traits, but also on the basis of the intersectionality of two or more protected traits. While California laws have long prohibited discrimination and harassment on the basis of protected characteristics — such as race, gender, age, disability and sexual orientation — they now also apply to intersectional identities, where two or more of the characteristics result in a unique form of discrimination. Pursuant to SB 1137, a party may be required to establish whether the discrimination or harassment occurred on the basis of a combination of factors, rather than a single protected characteristic.

SB 1340: Local enforcement of employment discrimination laws

The governor signed SB 1340 into law. This bill allows local jurisdictions to enforce local anti-discrimination laws that are at least as protective as state law. As a prerequisite to this local enforcement, the Civil Rights Department (CRD) must issue a right-to-sue notice. During any local enforcement, the statute of limitations will be tolled but an employee will not be prevented from filing a lawsuit.

AB 1870: Changes to workers' compensation notices

On July 15, 2024, Governor Newsom signed AB 1870, which amends Labor Code section 3550. The amendment requires that workers' compensation notices in the workplace include information concerning an injured employee's ability to consult a licensed attorney to advise them of their rights under workers' compensation laws. AB 1870 also specifies that in most instances, attorney's fees will be paid from an injured employee's recovery.

AB 2123: Employees cannot be required to use vacation before receiving paid family leave benefits

Governor Newsom approved AB 2123 on September 29, 2024. Under the new law, effective January 1, 2025, employers will no longer be allowed to require employees to exhaust up to two weeks of accrued vacation before receiving paid family leave (PFL) benefits. The state provides PFL benefits to eligible employees to care for seriously ill family members, bond with new children, or assist when a military family member is deployed to a foreign country.

AB 2499: Expansion of paid sick leave rights

On September 29, 2024, Governor Newsom signed AB 2499 to amend the statewide paid sick leave law, also known as the Healthy Workplaces Healthy Families Act. The bill expands the qualifications for "safe" leave, allowing paid sick leave when an employee's family member is a victim. Under the amendments, paid sick leave will continue to be available if the individual is a victim of domestic violence, sexual assault, or stalking, but will now also cover victims of bodily injury or death by a third party to another individual, victims of any dangerous weapon with respect to another, and victims of reasonably perceived or actual threat of physical injury or death to another individual. In addition, the unpaid leave protections for victims are now a part of California's FEHA and will be enforced by the CRD.

AB 2602 and AB 1836: Protections regarding "digital replicas" in the entertainment industry

In the absence of federal legislation, California recently enacted AB 2602 and AB 1836, two AI-related laws, to protect against certain unauthorized use of digital replicas of an individual and to safeguard against AI-generated content, including certain sexually explicit digital content. Under SB 2602, any contractual provision that permits the creation or use of a digital replica in lieu of work the individual would have otherwise performed must include a reasonably specific description of how the digital replica will be used (unless the usage is otherwise consistent with the terms of the professional services being offered by such individual). AB 1836, on the other hand, amends existing protections for the posthumous use of an individual's persona to cover digital replicas, allowing the estates to control and protect the digital replicas for up to 70 years after death.

AB 3234: Transparency requirements for social compliance audits

On September 22, 2024, Governor Newsom signed AB 3234 into law which imposes more transparency requirements for employers that audit their social compliance practices. Beginning January 1, 2025, any employer that has voluntarily subjected its business to a "social compliance audit" meaning "inspection of any production, house, factory, farm, or packing facility" to determine in whole or in part if it complies with social and ethical responsibilities, health and safety regulations, and labor laws, including those regarding child labor, must post a link on its website to a report detailing the findings of the audit. In addition to the employer's findings related to child labor practices and exposure to hazardous or unsafe workplace situations, the audit report must also include certain information such as details of when the audit was conducted, a copy of the employer's policies, and a statement by the auditing company.

AB 1034: Construction industry PAGA exemption extended

Governor Newsom signed AB 1034 into law in September, thereby extending the sunset of the construction industry exemption from the Private Attorneys General Act of 2004 (PAGA). Now, construction industry employers with certain valid collective bargaining agreements remain exempted from PAGA until January 1, 2038, instead of January 1, 2025.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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