We made it through another year! And as always, the labor and employment law front keep us on our toes. The new year brings some important updates for California employers to review. Let’s take a quick look at some of the key changes that could impact your business in the year ahead.
Wage and Hour
Wage and hour issues – and class action lawsuits – are on the rise in California, so if you haven’t recently reviewed how, you pay and classify your employees, it might be time to take a closer look. In addition to the changes in the wage rates, make sure you’re also auditing your meal period and rest-break policies, paying the correct overtime rates, and ensuring compliance with California’s updated sick leave laws, as well as reviewing your employee classifications. Getting these details right can help you avoid potential risks down the road. If you need a more comprehensive and structured process to audit your practices, please let us know and we would be happy to guide you or handle it for your team.
Taking the time to ensure that your pay practices are compliant with these adjustments and overall wage and hour regulations will save you time, money, and headaches in the long run. Feel free to reach out to your trusted advisors at The Mitzel Group for any wage and hour questions or concerns.
CA Minimum Wage Increases to $16.50 on 1/1/2025 (unless it’s 7/1/2025…Can’t they pick one date!?): California’s minimum wage will increase to $16.50 per hour due to the annual inflation adjustment. This means that employers will need to adjust their hourly pay rates to ensure compliance with the new minimum wage.
In addition, the minimum salary for exempt employees (those who qualify for overtime exemptions such as administrative, executive, and professional employees—DON’T ASSUME YOU CAN PAY EVERYONE A SALARY!) will rise to $68,640 annually or $5,720 per month. This is important for employers who have salaried exempt employees—be sure to review their salaries and make any necessary adjustments to comply with these new thresholds.
Local Minimum Wage Increases
In addition to the statewide increase, many local jurisdictions in California have their own minimum wage laws. Below is a chart outlining some of the upcoming regional requirements. Be sure to check if your city or county has specific minimum wage rates that may be higher than the state’s.
| Jurisdiction | Large Employers (26+ Employees) |
Small Employers (25 or fewer Employees) |
| Alameda * | $17.00 | $17.00 |
| Belmont | $18.30 | $18.30 |
| Berkeley * | $18.67 | $18.67 |
| Burlingame | $17.43 | $17.43 |
| Cupertino | $18.20 | $18.20 |
| Daly City | $17.07 | $17.07 |
| El Cerrito | $18.34 | $18.34 |
| Emeryville * | $19.36 | $19.36 |
| Fremont * | $17.30 | $17.30 |
| Half Moon Bay | $17.47 | $17.47 |
| Hayward | $17.36 | $16.50 |
| Los Altos | $18.20 | $18.20 |
| Menlo Park | $16.70 | $16.70 |
| Milpitas * | $17.70 | $17.70 |
| Mountain View | $19.20 | $19.20 |
| Oakland | $16.50 or $17.94 for hotel workers with Health Benefits $23.91 for hotel workers without Health Benefits |
$16.50 or $17.94 for hotel workers with Health Benefits $23.91 for hotel workers without Health Benefits |
| Palo Alto | $18.20 | $18.20 |
| Petaluma | $17.97 | $17.97 |
| Redwood City | $18.20 | $18.20 |
| Richmond | $17.20 | $17.20 |
| San Francisco * | $18.67 | $18.67 |
| San Jose | $17.55 | $17.55 |
| San Mateo | $17.95 | $17.95 |
| Santa Clara | $18.20 | $18.20 |
| Santa Rosa | $17.45 | $17.45 |
| Sonoma | $18.02 | $16.96 |
| South San Francisco | $17.70 | $17.70 |
| Sunnyvale | $19.00 | $19.00 |
| * due to increase on Jul 1, 2025, by Consumer Price Index (CPI).
This list is not comprehensive so please be sure to check each city in which you have employees as well as the applicable state requirements and pay them accordingly. |
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CA Minimum Pay for Overtime-Exempt Computer Professionals and Physicians and Surgeons Paid an Hourly Rate is Adjusted for Inflation: California’s minimum pay rates for certain exempt computer professionals and physicians/surgeons are getting an annual inflation adjustment. Here’s what you need to know:
- The minimum annual salary for computer professionals paid on a salary basis increases from $115,763.35 to $118,657.43.
- The minimum monthly salary for computer professionals paid on a salary basis increases from $9,646.96 to $9,888.13.
- The minimum hourly rate of pay for computer professionals paid an hourly rate increases from $55.58 to $56.97.
- The minimum hourly rate of pay for physicians and surgeons paid an hourly rate increases from $101.22 to $103.75.
CA Fast Food Minimum Wage Adjusted for Inflation:, pending the withdrawal of Referendum No. 1939, the Fast Food Council may increase the minimum wage for fast food employees by the lesser of the following rounded to the nearest 10 cents:
- 3.5 percent; or
- The rate of change in the averages of the most recent July 1 to June 30, inclusive, period over the preceding July 1 to June 30, inclusive, period for the US Bureau of Labor Statistic’s non-seasonally adjusted Consumer Price Index for Urban Wage Earners and Clerical Workers (US CPI-W).
The Council may elect to set minimum wage standards that vary by region or to set a statewide minimum wage increase.
Expanded Protections
CA Prohibits Intersectional Discrimination (SB 1137): An amendment to the California Fair Employment and Housing Act (FEHA) prohibits discrimination and harassment based on any combination of two or more protected characteristics. This expansion recognizes and provides greater protection for employees facing unique forms of discrimination due to overlapping identities. For example, various combinations of race and gender or age and disability can have unique and compounded experiences of discrimination that go beyond individual characteristics.
Employers should update their discrimination policies and training to ensure that their employees are treated fairly regardless of any intersection of identities they hold.
CA Amends Hairstyle Discrimination Law (AB 1815): California Fair Employment and Housing Act (FEHA) and the Unruh Civil Rights Act amends the definition of race to apply to traits associated with race, including hair texture and protective hairstyles. The new amendment removes the term “historically” from the definition of race, making it clearer that traits like hair texture and hairstyles are now recognized as part of a person’s racial identity, regardless of historical context. The change applies retroactively, meaning it impacts current and past employment practices.
Employers should ensure that employees and managers are aware of this change to prevent discrimination and unintentional bias. Also consider reviewing dress code and grooming policies or any other policies relating to appearance to ensure they are compliant with this expanded definition.
CA Restricts Driver’s License Requirements (SB 1100): Employers may not require a job applicant to have a driver’s license unless:
- The employer reasonably expects driving to be one of the job functions for the position; and
- Use of an alternate form of transportation (e.g., public transit) would not be comparable in travel time or cost to the employer.
Employers should review job descriptions and advertisements to ensure that a driver’s license requirement is only included when it is a core function of the job.
CA Whistleblower Posting (AB 2299): California employers must display the labor commissioner’s list of employees’ whistleblower rights and responsibilities to comply with the whistleblower law posting requirement. With an increase in whistleblower complaints in recent years, it’s more important than ever for employers to not only meet posting requirements but also avoid any actions – perceived or actual – that could discourage employees from coming forward with concerns. Fostering an environment of transparency and protection is key to staying compliant and maintaining trust in the workplace.
CA Employee Protections Against Captive Audience Meetings Take Effect (SB 399): The California Worker Freedom from Employer Intimidation Act prohibits employers from discharging, disciplining or otherwise penalizing (or threatening such actions), or taking any adverse employment action against employees who refuse to attend or participate in employer-sponsored meetings or communications that discuss the employer’s views on political or religious matters. Political matters include issues like elections, political parties, and unionization. Religious matters cover topics related to religious beliefs or practices. The law specifically targets “captive audience meetings” (typically mandatory meetings where employers discuss unionization or other political matters), making them illegal if attendance or participation is forced.
Employers should review policies and train management on the limitations and protocols for conducting any workplace meetings.
CA Amends Workplace Violence Restraining Order Law (SB 428): California SB 428 expands the scope of workplace violence restraining orders (WVROs) to include harassment, defined as a knowing and willful course of conduct that causes substantial emotional distress to the victim. Employers will be able to seek temporary restraining orders (TROs) against individuals who harass employees, in addition to those who engage in workplace violence or threats of violence. The law excludes behaviors protected by the National Labor Relations Act (NLRA) or other legal protections, such as free speech rights or activities involving union communications. Employers should be aware of the expanded scope of workplace violence protections as well as inform their employees and management.
CA Anti-Preemption Law Takes Effect (SB 1340): SB 1340 expands the authority of local agencies to enforce anti-discrimination laws based on protected characteristics, starting January 1, 2025. Local agencies can enforce laws that offer protections at least as strong as those in the state’s Fair Employment and Housing Act (FEHA) and the Unruh Civil Rights Act. Enforcement can only begin after the California Civil Rights Department (CRD) issues a “right-to-sue” notice, and this process may toll (pause) the statute of limitations for filing a civil lawsuit, extending the time employees have to take legal action. Employers should stay informed about local anti-discrimination ordinances, as they may impose additional compliance requirements beyond state law. To minimize legal risks, employers should proactively review policies, stay up to date on training, and address potential discrimination issues.
Leaves of Absence
CA Amends Paid Family Leave Benefits Requirements (AB 2123): Employers cannot require employees to use any vacation or paid time off (PTO) before receiving California Paid Family Leave (PFL) benefits. Employers can still include the option for employees to use any vacation or paid time off to supplement their CA PFL benefits up to, but not to exceed, 100% of their normal weekly pay. (And remember that vacation and PTO are different. Use those terms intentionally and make sure you know the difference as there are different implications when an employee leaves you).
The key takeaway is that employers should review their leave policies to ensure that they do not contain language that requires employees to use vacation or PTO before CA PFL.
CA Amends Protections for Crime Victims (AB 2499): California’s workplace protections are expanding under the Paid Sick and Safe Leave (PSSL) law for employees or their family members who are victims of violence. Here are the key highlights:
- Family members now covered: Now includes not just employees, but also their family members (e.g., child, spouse, domestic partner, etc.) who are victims of domestic violence, sexual assault, or stalking.
- Qualifying Acts of Violence: Includes domestic violence, sexual assault, stalking, and other violent acts that cause bodily injury or threaten harm, regardless of criminal prosecution.
- Reasonable Accommodations: Employers may need to make safety adjustments, like work schedule changes, reassignment, or installation of locks, for victims or their family members.
- Leave Protections: Employers with 25+ employees must provide the following:
- 12 weeks for employees who are victims of violence.
- 10 days for employees whose family member is a victim.
- 5 days for relocation or enrolling children in a new school when a family member is a victim.
- Prohibited Actions: Employers cannot terminate, discriminate, or retaliate against employees who take leave for medical treatment, legal services, relocation, or attend legal proceedings related to a qualifying act of violence.
- Enforcement: The California Fair Employment and Housing Act (FEHA) will now oversee enforcement. Employers must inform employees of their rights at hire, annually, and when an employee reports being a victim.
- Notice Requirement: Employers must provide written notice to employees about their rights under AB 2499, with a model notice from the California Department of Civil Rights available by July 1, 2025.
CA Paid Family Leave Benefits Increase (SB 951): For employees who apply for CA Paid Family Leave benefits, the benefits payout will increase from 60-70% or from 70-90% of the average weekly earnings depending on the employee’s income level.
The calculation of benefits will depend on where the employee’s wage is in proximity to the state average quarterly wage. For example,
- An employee that earns 70% or less of the state average quarterly wage may receive up to 90% wage replacement.
- An employee that earns more than 70% of the state average quarterly wage may receive up to 70% wage replacement.
Employee Classifications
CA Sunsets Independent Contractor Exemptions for Certain Workers: California Assembly Bill 5 (AB 5) is legislation that requires companies that hire independent contractors to reclassify them as employees unless they pass the “ABC” Test. The following categories will be exempt from AB 5 until January 1, 2025, when they will need to be converted to employees:
- Newspaper distributors working under contract with a newspaper publisher.
- Newspaper carriers working under contract with either a newspaper publisher or a newspaper distributor.
- Licensed manicurists; and
- Certain subcontractors providing construction trucking services.
Employers should start planning now to ensure compliance with AB 5 and the “ABC” Test before the new sunset dates. As a refresher of the “ABC” Test, to be viewed as an independent contractor, a worker must meet the following criteria:
- Be free from the control of the hiring entity.
- Perform work outside the normal scope of the hiring entity.
- Be an independent established practitioner of the trade performed.
For industries affected by these changes, be sure to review your contractor relationships and prepare for the shift in worker classification requirements by January 1, 2025. Plus, it’s always a good idea to revisit who you’re paying as an Independent Contractor to ensure that the classification still applies.
Consumer Privacy
CA Amends Definition of Sensitive Personal Information Under Consumer Privacy Act (SB 1223): The definition of sensitive personal information under the California Consumer Privacy Act (CCPA) is amended to include “neural data.” This refers to information generated by measuring the activity of a consumer’s central or peripheral nervous system, and that is not inferred from nonneural information. Employers using neurotechnology or collecting this type of data need to review data collection practices and be aware of this new classification and ensure it is handled in compliance with the CPRA’s data privacy protections. With the collection of health information and data via various watches, rings, implants etc., personal data that we forget about is everywhere and this Act intends to address how that data may be used and protected.
CA Amends Consumer Privacy Act to Clarify Definition of Personal Information (AB 1008): AB 1008 clarifies that personal information under the California Consumer Privacy Act (CCPA) includes data in any format—physical, digital, and abstract digital formats such as AI-generated data, metadata, or compressed/encrypted files. This update means businesses must treat personal data from AI and emerging technologies with the same privacy protection as traditional forms. If your business collects, processes, or stores personal information in various formats, ensure your data privacy practices are updated to comply with these expanded definitions.
CA Expands Opt-Out Rights Under Consumer Privacy Act (AB 1824): California Consumer Privacy Act (CCPA) is amended to require successor businesses (e.g., companies acquiring or assuming control of another) to comply with consumer opt-out directions. Under the CCPA, consumers have the right to direct a business not to sell or share their personal information to third parties (referred to as the right to opt out of sale or sharing).
If your business is involved in a transaction where consumer data is transferred, make sure to capture and communicate any consumer opt-out elections during due diligence. This ensures compliance with AB 1824 and prevents violations of consumer privacy rights.
Miscellaneous New Laws:
Disclosure of Voluntary Child Labor Audits (AB 3234): Employers that have participated in a voluntary audit for child labor must publicly report the findings.
CA Prohibits Digital Replica Usage in Employment Agreements (AB 2602): Any provision in a personal or professional services agreement is unenforceable if it allows the creation and use of a digital replicas of an individual’s voice or likeness in place of work the individual would otherwise have performed in person. Digital replica means a computer-generated, highly realistic electronic representation that is readily identifiable as the voice or visual likeness of an individual that is embodied in a sound recording, image, audiovisual work or transmission in which the actual individual did not actually perform or appear.
CA Amends Law to Permit Association Health Plans (AB 2434): California law allows an association of employers to offer a large group health care service plan to small group employer members of the association consistent with Employee Retirement Income Security Act (ERISA) when specified conditions are met.
Effective July 1, 2025
CA Amends Health Insurance Requirements Related to Reproductive Health (SB 729): Employers that issue or renew a group health plan on or after July 1, 2025, must ensure that the plan provides coverage for the diagnosis and treatment of infertility, including a maximum of three completed oocyte retrievals with unlimited embryo transfers. Previously, while the law provided coverage for infertility treatments, it specifically did not provide coverage for invitro fertilization.
CA Health Care Worker Minimum Wage Increases: Covered health care facilities must pay covered health care employees a minimum wage according to the following schedule:
- Large Facilities and Integrated Systems – $24.00
- Hospitals – $18.63*
- Clinics and All Other Health Care Facilities – $21.00
*Note: This rate is projected based on the previous year’s minimum wage increased by 3.5%.
Covered health care employees who are compensated on a salary basis must be paid a monthly salary equivalent to no less than 150 percent of the health care worker minimum wage or the standard 200 percent of the minimum wage, whichever is greater.
This development originally was scheduled to take place on June 1, 2025. However, on May 31, 2024, a bill was enacted that delays the implementation date by one month.
Effective December 31, 2025
CA CalSavers Retirement Savings Program Registration Deadline for Employers with One to Four Employees Takes Effect (SB 1126): Effective December 31, 2025. Eligible employers with one or more employees must register with the CalSavers Retirement Saving Program. Legislation expanding the definition of eligible employers to include employers with one or more employees took effect on January 1, 2023.
PAGA Reform
New PAGA: Signed into effect on July 1, 2024. Applies to PAGA claims based on notices to the Labor Workforce and Development Agency (LWDA) submitted on or after June 19th, 2024. A high-level overview of the changes includes new standing requirements for employee plaintiffs, opportunities for cure, remediation, and early settlement, and adjustment of penalty amounts and scope. The most common basis for PAGA claims is employee classifications (exempt vs. non-exempt), overtime and regular rate of pay, meal periods and rest breaks, and key documentation (wage stubs, etc.). We recommend that employers practice proactive compliance by conducting payroll audits, maintain compliant-written policies, train employees on Labor Code and wage order compliance, take corrective actions with supervisors, and document all compliance efforts.
