California's New Employment Laws: Get Ready for 2025
Governor Newsom recently approved several employment bills that will significantly impact the rights of employees in California starting on January 1, 2025. DWT recommends that employers take note of these new laws and get ahead of the game by reviewing their employee handbooks, personnel policies, and employment contracts before the end of the year.
SB 399: "Captive Audience" Meeting Ban
With the approval of SB 399, California joined a growing number of states that have now enacted bans on employer-sponsored "captive audience" meetings. Effective January 1, 2025, SB 399, a union-backed bill known as the California Worker Freedom from Employer Intimidation Act, will prohibit California employers from requiring their employees attend mandatory meetings on religious or political matters, including anti-unionization. Employers may not retaliate against employees for refusing to attend such meetings. Employees who are scheduled to work during the meeting must be paid for their time regardless of whether they attend the meeting. Employers who violate the new law will be subject to a $500-per-employee civil penalty. Employers can still hold meetings to share legally required and job-related information and certain exceptions apply to religious and political organizations. Although similar laws have been challenged and are currently being litigated in other states, California employers should prepare for the upcoming ban by ensuring their corporate practices are in compliance.
SB 988: Freelance Worker Protection Act
Known as the Freelance Worker Protection Act (FWPA), SB 988 provides expanded protections to freelance workers by establishing minimum employment requirements, including a written contract requirement, effective January 1, 2025.
The new law defines a freelance worker as a person who is hired as a bona fide independent contractor to provide professional services in exchange for an amount equal to or greater than $250. The professional services being referred to in the FWPA are defined in Labor Code section 2778(b)(2) and include multiple categories of freelance-style work, including marketing, human resources, graphic design, photography, estheticians, and others.
In addition to requiring a freelance worker's contract be in writing, the FWPA will also require a hiring party provide a signed copy of the contract to the freelance worker, and the contract be retained for four years. The FWPA sets out specific requirements for information that is to be contained in the contract including:
1) the name and address of each party;
2) an itemized list of all services to be provided, including the value of the services and the rate and method of compensation;
3) the date the hiring party will pay; and
4) the date by which the freelance worker will submit a list of services rendered for timely payment.
Under the new law, a hiring party must pay a freelance worker on or before the date compensation is due pursuant to the contract and, if the contract does not specify, no later than 30 days after the completion of the contracted work. Additionally, once a freelance contractor has started performing services under the contract, the hiring party cannot require the freelance worker to accept less compensation or provide more services than agreed upon in the contract.
The FWPA specifically prohibits the waiver of any of its requirements, as well as any discrimination against a freelance worker for taking steps to enforce the provisions of the FWPA. The FWPA further provides that a freelance worker or public prosecutor may bring a civil action for a violation of its provision and, if successful, recover attorney's fees and costs, injunctive relief, and other damages as follows:
1) if a freelance worker requested a written contract prior to commencing work and the hiring party refused, the freelance worker shall be awarded an additional $1,000;
2) if a hiring party failed to pay the freelance worker the contracted compensation within the required time frame, the freelance worker can recover damages up to twice the amount that remained unpaid at the time the payment was due;
3) if the freelance worker requested a written contract prior to commencing work and the hiring party refused, the amount unpaid shall be determined by the rate the freelance worker reasonably understood to apply to the work; and
4) if the hiring party violates any other provision of the FWPA, the freelance worker may be awarded damages equal to the value of the contract or the work performed, whichever is greater.
Given the scope of the FWPA and the potential penalties for noncompliance, California employers would be wise to take steps now to determine whether any of their workers qualify as freelance workers under the new law and, if so, ensure that their contracts are revised and updated to comply with the new requirements.
SB 1100: Driver's License Discrimination
SB 1100 will amend the Fair Employment and Housing Act (FEHA) to prohibit employers from including any statement in job posting materials that requires an applicant to have a driver's license, unless certain conditions are met, after January 1, 2025. To combat discrimination against applicants who do not drive, the new law limits the circumstances in which a driver's license can be required to only those that meet both of the following criteria: 1) the employer reasonably expects driving to be one of the job functions; and 2) the employer reasonably believes that an alternative form of transportation (e.g., ride-hailing services, taxis, carpooling, bicycling, and walking) would not be comparable in travel time or cost to the employer.
SB 1137: Discrimination Prohibited Based Upon the Intersectionality of Two Traits
With the signing of SB 1137, Governor Newsom established California as the first state in the nation to incorporate the concept of intersectionality into its anti-discrimination laws. As defined in the bill, intersectionality is "an analytical framework that sets forth that different forms of inequality operate together, exacerbate each other, and can result in amplified forms of prejudice and harm." Under California law, discrimination is prohibited on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, age, sexual orientation, reproductive health decision making, and veteran or military status. The term "intersectionality" was coined and has been popularized by legal scholar Professor Kimberle Williams Crenshaw to address "the unique, interlocking forms of discrimination and harassment experienced by individuals in the workplace and throughout society." Effective January 1, 2025, SB 1137 will revise the state's Unruh Civil Rights Act, Education Code and FEHA to include remedies for discrimination based upon the combination of any two or more protected bases.
SB 1340: Local Enforcement of Workplace Discrimination Laws
Effective January 1, 2025, SB 1340 will enable local governmental entities in California to actively enforce local laws prohibiting employment discrimination, when such laws are at least as protective as the state law and certain additional requirements are met. Under existing law, the state's Civil Rights Department (CRD) is the only entity currently able to enforce the state's employment discrimination laws which are set forth in the Unruh Civil Rights Act and the Fair Employment and Housing Act (FEHA).
Under the new law, enforcement will be expanded to cities, counties, and local governmental entities when all of the following has occurred:
1) the local enforcement concerns an employment complaint filed with the CRD; 2) the local enforcement occurs after the CRD has issued a right-to-sue notice; 3) the local enforcement commences before the expiration of the time to file a civil action specified in the right-to-sue notice; and 4) the local enforcement is pursuant to local law that is at least as protective as FEHA.
Significantly, the new law also specifies that the employee's one-year time frame in which to file a civil action (set forth in the CRD's right-to-sue notice) will be tolled during any local enforcement proceedings.
SB 1350: Cal/OSHA to Regulate Household Domestic Services
The safety regulations and protections provided by Cal/OSHA to employees throughout the state have historically excluded all household domestic services from the definition of employment covered by its laws. SB 1350 removes this historical exclusion and will provide coverage starting on July 1, 2025, for household domestic service performed on a permanent or temporary basis, with the following exceptions:
1) publicly funded household domestic services;
2) employment in family daycare homes; and
3) individuals who, in their own homes, privately employ persons to perform for the benefit of such individuals what are commonly regarded as domestic household tasks, including housecleaning, cooking, and caregiving.
AB 1034: PAGA Exemption Extended for Construction Industry Employees
AB 1034 extends the exemption in the California Private Attorneys General Act of 2004 (PAGA) for certain construction industry employees to January 1, 2038. Under the existing law, PAGA, which allows aggrieved employees to bring a civil action on behalf of themselves and other employees to enforce violations for the state's Labor Code, contains an exemption for certain construction industry employees with respect to work performed under a valid collective bargaining agreement (CBA) in effect any time before January 1, 2025. To qualify, the CBA must contain specific wage information and meet express requirements regarding the prohibition of all Labor Code violations redressable by PAGA, the waiver of PAGA requirements, and the authorization of an arbitrator to award remedies.
AB 1034 extends this exemption another 13 years from January 1, 2025, to January 1, 2038, at which point it will be repealed. To take advantage of this exemption, construction employers must ensure that they take steps to make sure that their CBA contains the information and waivers required by the law.
AB 2123: Employers Cannot Require Use of Vacation Time Prior to Paid Family Leave
Effective January 1, 2025, California employers will no longer be able to require employees to take up to two weeks of earned but not used vacation before being able to access California's Paid Family Leave Program (PFL). California's PFL provides wage replacement benefits to workers who take time off to care for seriously ill family members, bond with a minor child, or help family members called to active duty. The existing law allows employers to require an employee to take up to two weeks of vacation time. AB 2123 revises the law to allow employees to immediately access PFL without having to use any accrued vacation at the start of 2025.
AB 2499: Expansion of Victims-of-Violence Workplace Protections
Under California law, crime victims have long been provided with employment protections, including accommodations and leave, to allow them to recover and appear in court. Effective January 1, 2025, AB 2499 recasts the protections under FEHA, expands upon these existing laws by broadening the scope of who is entitled to these protections, and allows the use of paid sick leave for this time off.
AB 2499 revises the existing crime victim protections, which can currently be found in the Labor Code, and recasts them as unlawful employment practices within the FEHA to be enforced by the Civil Rights Department. Under the new law, the definition of victim is broadened to include a victim of a "qualifying act of violence" (instead of a crime or abuse), which includes the following, regardless of whether anyone is arrested for, prosecuted for, or convicted of committing any crime: 1) domestic violence; 2) sexual assault; 3) stalking; and 4) an act, conduct, or pattern of conduct that includes an individual who causes bodily injury or death, uses a firearm or other dangerous weapon, or makes a threat of use of force.
Similar to the existing laws, the new law prohibits all employers from retaliating or discriminating against employees who serve upon a jury and are called as a witness in a judicial proceeding, as well as employees who are crime victims, for taking time off from work to obtain relief, including a restraining order or other injunctive relief, for themselves or their child. Additionally, the new law adds protections for certain employees with family members who are crime victims. AB 2499 specifically prohibits employers with 25 or more employees from discriminating and retaliating against employees who are victims, or who have family members who are victims, for taking time off of work for a number of specified additional prescribed purposes relating to a qualifying act of violence. Family members are defined as a child, parent, grandparent, grandchild, sibling, spouse, domestic partner, or designated person. A designated person may be an individual whose association with the employee is the equivalent of a family relationship and must be identified by the employee at the time the employee requests the leave. An employer may limit an employee to one designated person per 12-month period. The specified additional purposes for which the employee who is a victim or has a family member who is a victim may take time off work are:
1) to obtain or attempt to obtain relief (such as a restraining order or other injunctive relief);
2) to seek or obtain medical attention;
3) to seek or obtain services from a domestic violence shelter or similar organization;
4) to seek or obtain psychological counseling or mental health services;
5) to participate in safety planning;
6) to relocate or engage in the process of securing a new residence;
7) to provide care to a family member;
8) to seek or obtain civil or criminal legal services;
9) to prepare for, participate in, or attend any legal proceeding; and
10) to seek, obtain, or provide childcare or care to a care-dependent adult.
Under the new law, employers with 25 or more employees may limit the amount of leave time taken by an employee as follows: 1) to an overall leave time total of 12 weeks; 2) to 10 days if the employee's family member is the victim (not deceased); and 3) to five days if the employee's family member is the victim (not deceased) and the leave is for relocation purposes. The new law also requires that this leave run concurrently with leave taken pursuant to the federal FMLA and the California Family Rights Act.
Additionally, the new law expands the eligibility for reasonable accommodations to include an employee who is a victim or whose family member is a victim of a qualifying act of violence for the safety of the employee while at work, so long as the employee has disclosed their or their family member's status as a victim. Employers will continue to be required to engage in an interactive process to identify reasonable accommodations and will not be required to provide accommodations what would present an undue hardship. Additionally, employers will still be able to require certification from employees seeking such accommodations.
The new law requires the CRD to develop a form titled "Survivors of Violence and Family Members of Victims Right to Leave and Accommodations" by July 1, 2025, which will set forth the rights of employees under AB 2499, as well as their rights to disability leave, bereavement leave, and other leave to attend court proceedings. Once that form is made available, employers will be required to notify employees of these rights upon hire, to all employees annually, at any time upon request, and any time an employee informs an employer that the employee or the employee's family member is a victim.
Additionally, the new law will expand paid sick leave under the Healthy Workplace Healthy Families Act of 2014 (HWHFA) to allow employees to use such leave when an employee's family member is a victim, as well as when the employee is a victim. Under AB 2499, employees will now be able to use vacation, personal leave, paid sick leave, or compensatory time off that is otherwise available to the employee, unless otherwise provided by a collective bargaining agreement.
AB 3234: Publication of Voluntary Social Compliance Audits
Starting on January 1, 2025, California employers who have voluntarily subjected their company to a social compliance audit will be required to post a link to the results of the audit on their website. A social compliance audit is defined as a "voluntary, nongovernmental inspection or assessment of an employer's operation or practices to evaluate whether the operations or practices are in compliance with state and federal labor laws, including, but not limited to, wage and hour and health and safety regulations, including those regarding child labor." A child is defined as a person under 18 years of age and child labor is defined as any work performed by a child that is in violation of state or federal law. Under the new law, employers who conduct such audits will be required to post a clear and conspicuous link on their websites to a report detailing the findings of the employer's compliance with child labor laws. To be clear, the law does not impose any proactive requirement on employers to conduct social compliance audits, and the law only applies to audits that are voluntarily conducted.
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DWT will continue to monitor all new employment laws and provide updates as developments arise. All employers with employees in California are encouraged to review their employee handbooks and personnel policies now, to bring them into compliance with these new laws. Questions about compliance can be directed to a member of DWT's employment services group.