Compliance Tips for Small Business Employers

Every year our legislators churn out new laws to protect employees at work, ensure fair competition among employers, and provide consequences to bad actors on either side of the aisle.  Unfortunately, laws are complicated and sometimes need clarification or conflict with each other. Thus, our courts also weigh in and make rulings that impact employers and employees alike.

Our mission is to give small business private employers the resources they need to take swift, constructive action to come into compliance.  Wouldn’t it be nice to face the new year with peace of mind instead of dread? Let’s do it!

Top Fifteen 2025 California Employment Laws for Small Business

Unless stated otherwise, the top fifteen 2025 California employment laws or small business listed below become effective on January 1, 2025. We have only included employment laws specifically focused on privately owned, non-unionized, small private business employers (with 1 to 49 employees).

As you scroll down this Blog you will find:

1. A list of top Fifteen 2025 California Employment laws applicable to small business private employers. Each law includes a clickable link to the actual text of the law.
2. A summary of important provisions of each new law.
3. Recommended actions to proactively come into compliance and reduce the legal risks of claims and lawsuits.
4. Miscellaneous laws, such as new posters, minimum wage requirements and new contract requirements for Independent Contractors who provide professional services.

Discrimination

1. AB 1815 Discrimination: Amends Definition of Race and Protective Hair Styles

AB 1815 amends Section 51 of Civil Code, Section 12926 (w) & (x) by removing the word “historically” (w) “Race” is inclusive of traits associated with race, including, but not limited to, hair texture and protective hairstyles. (x) changes the word Locks to locs: “protective hair styles” includes, but is not limited to, such hairstyles as braids, locs, and twists.

AB 1815 Applies To: All California employers who are subject to the Fair Employment and Housing Act (FEHA applies to employers with 5 or more employees, except for harassment discrimination which applies to 1 or more employees) or the Unruh Civil Rights Act.

AB 1815 Applies to: All California employers who are subject to the Fair Employment and Housing Act (FEHA applies to employers with 5 or more employees, except for harassment discrimination which applies to 1 or more employees) or the Unruh Civil Rights Act.

Recommended Actions

• Revise EEO and Harassment handbook policies to include revised language.
• Educate supervisors on this new law and proper language to use.

2. SB 1137 Discrimination: Protects intersectionality (combination of protected characteristics)

SB 1147 clarifies existing law that protected classes under the Fair Employment and Housing Act (FEHA) include any combination of protected classes (characteristics), as well as perception that a person has one or more such characteristics.

This new law provides that protected classes now include:
a) any combination of protected characteristics; b) a perception that a person has a characteristic or characteristics within protected categories or a combination of those characteristics; and c) a perception that a person is associated with a person who has or is perceived to have a protected characteristic or combination of protected characteristics.

SB 1137 Applies To: All California employers who are subject to the Fair Employment and Housing Act (FEHA applies to employers with 5 or more employees, except for harassment discrimination which applies to 1 or more employees).

Recommended Actions

• Revise EEO and Harassment handbook policies.
• Educate supervisors on this new law.

3. SB 1100 Discrimination: Prohibits discrimination in the hiring process for lack of a driver’s license

SB 1100 prohibits employers from requiring a driver’s license in job advertisements, postings, or applications or other materials unless 1) the employer reasonably expects driving to be one of the job functions for the position and 2) the employer reasonably believes that satisfying the job function through an alternative form of transportation would not be comparable in travel time or cost to the employer.

Government Code §12940 (q)(1) states: “Alternative form of transportation” includes but is not limited to, all of the following: a) using a ride hailing service; b) using a taxi; c) carpooling; d) bicycling e) walking.

S.B 1100 Applies To: All California employers who are subject to the Fair Employment and Housing Act (FEHA applies to employers with 5 or more employees, except for harassment discrimination which applies to 1 or more employees).

Recommended Actions

• Evaluate all hiring materials applying the two-part test above. If the position does not meet these new legal requirements, all materials associated with the position should be revised for compliance.
• Review all job descriptions, application forms and handbook policies that require a driver’s license and update consistent with this new law.
• Train supervisors and hiring personnel on this new law.
• We recommend smaller employers (less than 5 employees) proceed with caution and ensure that a driver’s license is actually required for the position.

Additional Protections for Sick Leave and Paid Family Leave

4. AB 2123 Paid Family Leave (PFL): Employers can no longer require employees to use two weeks of vacation prior to receiving benefits

PFL provides employees with partial wage replacement for up to 8 weeks in any 12-month period while absent from work to care for a seriously ill or injured family member, bonding with a minor child within one year of the child’s birth or placement in connection with foster care or adoption, or to participate in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s family member.

Currently, employers are allowed to require an employee to use up to two weeks of accrued vacation time before they can access PFL benefits. This prevents employees from freely accessing benefits they pay for, since PFL benefits are funded entirely by employees via payroll withholding. This bill deletes the authorization for an employer to require an employee to take up to two weeks of earned and unused vacation leave before being able to access benefits under PFL. This amendment for PFL only applies commencing on or after January 1, 2025, by adding a sunset date on the initial authorization requirement in existing law, rather than striking the provision.

AB 2123 Applies To: All California employers of any size.

Recommended Actions

• Review and update handbook leave policies and forms to delete the requirement of applying two weeks of vacation to a PFL leave.
• Educate supervisors and payroll personnel of this new law.

5. AB 2011: Adds claims for reproductive loss to Small Employer Family Leave Mediation Program and clarifies statute of limitations

AB 2011 adds claims for violations of reproductive leave loss provisions to coverage under the current Small Employer Family Leave Mediation and Pilot Program. AB 2011 permanently establishes this pilot program under the California Civil Rights Department (CRD), and provides an ongoing resource for small businesses and employees to mediate discrepancies between small businesses and their employees of claims for family and medical leave, reproductive loss leave and bereavement leave. This bill further clarifies which claims have their statute of limitations tolled during mediation and when a mediation is deemed complete by adding the following requirements:

“Government Code 12945.21 (d)

(E) The mediator determines that the core facts of the employee’s complaint are unrelated to Family and Medical Leave, Reproductive Loss Leave or Bereavement Leave.

(F) (i) The mediator determines that the employer has fewer than 5 or more than 19 employees.

(ii) Clause (i) shall not apply if the parties disagree about whether the employer has between 5 and 19 employees and the mediator is unable to determine that the employer has between 5 and 19 employees.”

AB 2011 Applies To: All California employers who employ between 5 to 19 employees.

Recommended Actions

• Review and update leave of absence policies on family and medical leave, reproductive loss leave and bereavement leave to advise employees of the Small Employer Family Leave Mediation Program and requirements to contact the CRD’s dispute resolution division prior to filing a civil action.
• 2. Educate owners, HR and supervisors of requirements of AB 2011 and timing for requests and responses from CRD Small Employer Family Leave Mediation Program.

6. AB  2499 Expands Sick Leave Uses for Crime Victims   

AB 2499 expands existing workplace protections for employees who are victims of crime or abuse. L.C. § § 230 and L.C. 230.1 are repealed and replaced, and L.C. § 246.5 is amended. This expanded law will now be enforceable by the Civil Rights Department (CRD), which provides a way for employees to bring civil actions in court, rather than the Division of Labor Standards (which is primarily enforcing wage and hour laws). These new workplace violence protections include the following:

Qualifying Acts of Violence

A new term “Qualifying Acts of Violence (QAV)” was added to replace former terms “victims of crime or abuse and victims of domestic violence, sexual assault or stalking”. QAV is now defined as: domestic violence, sexual assault, stalking, or any act, conduct or pattern of conduct that includes (i) bodily injury or death to another, (ii) brandishing, exhibiting, or drawing a firearm or other dangerous weapon, or (iii) a perceived or actual threat to use force against another to cause physical injury or death (regardless of whether anyone is arrested for, persecuted for, or convicted of committing a crime). These terms are defined in Gov Code §12945.8 (j).

Discrimination, Discrimination and Retaliation Prohibitions

Employers of any size may not discharge, discriminate or retaliate against any employee under Gov Code §12945.8 (a) for any of the following:

• Taking time off to serve as required by law on an inquest jury or trial jury, if the employee, prior to taking the time off, gives reasonable notice to the employer that the employee is required to serve.
• Taking time off to appear in court to comply with a subpoena or other court order as a witness in any judicial proceeding.
• Taking time off from work to obtain or attempt to obtain any relief. Relief includes, but is not limited to, a temporary restraining order, restraining order, or other injunctive relief, to help ensure the health, safety, or welfare of the victim or their child.
• Because of the employee’s status, or the employee’s family member’s status, as a victim if the employee provides notice to the employer of the status or the employer has actual knowledge of the status.

Employers with 25 or more employees may not discharge, discriminate or retaliate against any employee under Gov Code §12945.8 (b) for any of the following:

• To obtain or attempt to obtain any relief for the family member. Relief includes, but is not limited to, a temporary restraining order, restraining order, or other injunctive relief, to help ensure the health, safety, or welfare of the family member of the victim.
• To seek, obtain, or assist a family member to seek or obtain, medical attention for or to recover from injuries caused by a qualifying act of violence.
• To seek, obtain, or assist a family member to seek or obtain services from a domestic violence shelter, program, rape crisis center, or victim services organization or agency as a result of a qualifying act of violence.
• To seek, obtain, or assist a family member to seek or obtain psychological counseling or mental health services related to an experience of a qualifying act of violence.
• To participate in safety planning or take other actions to increase safety from future qualifying acts of violence.
• To relocate or engage in the process of securing a new residence due to the qualifying act of violence, including, but not limited to, securing temporary or permanent housing or enrolling children in a new school or childcare
• To provide care to a family member who is recovering from injuries caused by a qualifying act of violence.
• To seek, obtain, or assist a family member to seek or obtain civil or criminal legal services in relation to the qualifying act of violence.
• To prepare for, participate in, or attend any civil, administrative, or criminal legal proceeding related to the qualifying act of violence.
• To seek, obtain, or provide childcare or care to a care-dependent adult if the childcare or care is necessary to ensure the safety of the child or dependent adult as a result of the qualifying act of violence.

Some Protections for Employee Who Has a Family Member Who is a Victim

Family member is defined to include: a child, parent, grandparent, grandchild, sibling, spouse or domestic partner (as terms are defined under CFRA) or a designated person, who does not need to be a blood relative, so long as their association with the employee is equivalent of a family relationship. An employee may identify a “designated person” at the time they request leave, but the employer may limit an employee to one designated person per 1- month period. an employee no longer needs an accommodation, the employee shall notify the employer that the accommodation is no longer needed.

Advance Notice and Certification Requirements

Employee shall give employer reasonable advance notice of the employee’s intention to take time off, unless advance notice is not feasible. When an unscheduled absence occurs, the employer shall not take any action against the employee if the employee, within a reasonable time after the absence, provides a certification to the employer upon request by the employer.

Certification shall be sufficient in the form of any of the following:

1. A police report indicating that the employee or a family member of the employee was a victim.

2.  A court order protecting or separating the employee or a family member of the employee from the perpetrator of the qualifying act of violence, or other evidence from a court or prosecuting attorney that the employee or a family member of the employee has appeared in court.

3. Documentation from a licensed medical professional, domestic violence counselor, a sexual assault counselor, victim advocate, licensed health care provider, or counselor that the employee or a family member of the employee was undergoing treatment or seeking or receiving services directly related to the qualifying act of violence.

4. Any other form of documentation that reasonably verifies that the qualifying act of violence occurred, including, but not limited to, a written statement signed by the employee, or an individual acting on the employee’s behalf, certifying that the absence is for a purpose authorized under this law.

An employer who requests certification pursuant may request recertification of an employee’s status, or an employee’s family member’s status, as a victim, or ongoing circumstances related to the qualifying act of violence, every six months after the date of the previous certification.

Reasonable Accommodations and Confidentiality

Eligibility for reasonable accommodations now includes an employee who is a victim /has a family member who is a victim of a qualifying act of violence. Employers shall provide reasonable accommodations for an employee who request an accommodation for the safety of the employee at work.  

The employer is required to engage in a timely, good faith, and interactive process to determine effective reasonable accommodations. In determining whether the accommodation is reasonable, the employer shall consider an exigent circumstance or danger facing the employee or their family member.

Reasonable accommodations may include the implementation of safety measures, including a transfer, reassignment, modified schedule, changed work telephone, permission to carry telephone at work, changed work station, installed lock, assistance in documenting domestic violence, sexual assault, stalking, or another qualifying act of violence that occurs in the workplace, an implemented safety procedure, or another adjustment to a job structure, workplace facility, or work requirement in response to domestic violence, sexual assault, stalking, or other qualifying act of violence, or referral to a victim assistance organization.

If circumstances change and an employee needs a new accommodation, the employee shall request a new accommodation from the employer and engage in a new interactive process.

If an employee no longer needs an accommodation, the employee shall notify the employer that the accommodation is no longer needed.

Employees may use vacation, personal and paid sick leave for leaves granted as reasonable accommodations.

Employer shall maintain the confidentiality of any employee requesting a Victim of Workplace Violence leave. Furnishing evidence or providing a certification under this subdivision shall not waive any confidentiality or privilege that may exist between the employee or employee’s family member and a third party.

Employer Notice Requirements

Employers are required to inform each employee of their rights under AB 2499. The information shall be provided to new employees 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. CRD will be developing a form that employers may use to comply with the notice requirements. This form (“Survivors of Violence and Family Members of Victims Right to Leave and Accommodations”) will be created and posted on CRD’s website no later than July 1, 2025.

AB 2499 Applies To: All California employers of any size, plus additional requirements for employers who employ 25 or more employees (as noted above). AB 2499 goes into effect on January 1, 2025, which except of the required poster which must be posted when it is available on CRD’s website (before July 1, 2025).

Recommended Actions

• Review and update existing policies and practices to ensure compliance, including leaves of absence, attendance, conduct, anti-retaliation and discipline policies.
• Educate leadership, HR and supervisors on these new requirements.
• Check CRD website and post and distribute “Survivors of Violence and Family Members of Victims Right to Leave Accommodations” to all employees when it is available. In the meantime, ensure that you update your Leave of Absence policies to include a Victim-of-Violence Leave policy and distribute this policy to all employees.

Privacy, Artificial Intelligence & Data Security

7. AB 2885: Defines artificial intelligence (AI)

The term “artificial intelligence” currently appears in several California statutes but remains undefined in California Code. In the absence of a common definition, AI will instead by defined on a case-by-case basis in California statutes. AB 2885 provides a common definition for the term: ““Artificial intelligence” means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments [Government Code §11546.45.5 (a)(1)].

AB 2285 Applies To: All California employers of any size.

8. AB 2602: Prohibits use of employee’s voice or likeness.

A provision in an employment agreement that allows for the creation and use of a digital replica of the employee’s voice or likeness is unenforceable unless it meets the following conditions:

• It contains a provision allowing for the use of a digital replica of an individual’s voice or likeness;
• It does not include a reasonably specific description of the digital replica’s intended uses with limited exception; and
• It is not negotiated with legal counsel or by a labor union, as specified.

AB 2602 Applies To: All employers of any size.

9.0 SB 399: Bans retaliation over “captive audience” mandatory meetings

SB 399 enacts the California Worker Freedom from Employer Intimidation Act which prohibits employers from taking any actions if an employee refuses to attend a meeting that speaks about a company’s opinions on political matters. The new law attempts to prohibit workplaces from making these meetings mandatory. “Political matters” means matters relating to elections for political office, political parties, legislation, regulation, and the decision to join or support any political party or political or labor organization. “Religious matters” means matters relating to religious affiliation and practice and the decision to join or support any religious organization or association.

The new law states that these new provisions do not prohibit an employer from any of the following:

1. Communicating to its employees any information that the employer is required by law to communicate, but only to the extent of that legal requirement.
2. Communicating to its employees any information that is necessary for those employees to perform their job duties.

SB 399 Applies To: All employers of any size.

Recommended Action

This law became effective on January 1, 2025. However, the California Chamber of Commerce and the California Restaurant Association have recently filed a federal lawsuit challenging SB 399. They claim the law violates the First and 14^th amendments of the U.S. Constitution and asked the court to block the state law from going into effect.

Proceed with caution and follow this law until further notice from the Court.

Workplace Safety and Disclosures

10. AB 1976: Cal/OSHA to provide standards for opioid-antagonist to be required in employer first aid kits starting on January 1, 2027

AB 11976 requires Cal/OSHA to submit a draft rulemaking proposal to revise standards to require first aid materials in a workplace tin include naloxone hydrochloride or another opioid antagonist, to reverse opioid overdose and instructions or using the opioid antagonist before December 1, 2027.

11. AB 2738: Addresses worker injuries and fatalities at concert festivals and entertainment events

AB 2738 requires contracts with entertainment events vendors to provide in writing that upon hire for a live event, the vendor will furnish to the contracting entity certain information about the federal and Cal/OSHA trainings its own employees and subcontractors have completed.

§9251 of the Labor Code states:

(a) A contracting entity shall require an entertainment events vendor to certify for its employees, and any subcontractors’ employees, as part of the contract for production of any live event at its public events venue, both of the following:

(1) An employee of an entertainment events vendor involved in the setting up, operation, or tearing down of a live event at the venue has completed the Cal/OSHA-10, the OSHA-10/General Entertainment Safety training, or the OSHA-10 as applicable to their occupation.

(2) One of the following applies:

(A) Heads of departments and leads have completed the Cal/OSHA-30, the OSHA-30/General Entertainment Safety training, or the OSHA-30, and are certified through the Entertainment Technician Certification Program relevant to the task or tasks they are supervising or performing, or another certification program, as specified by the division.

(B) The entertainment events vendor certifies that its employees and any subcontractors’ employees meet the conditions for a skilled and trained workforce.

(b) An entertainment events vendor shall certify in writing, and as part of the contract, that they have verified the training completion and certification requirements of all employees, and any subcontractor’s employees, who will work on the setting up, operation, or tearing down of the event.

(c) (1) The contract shall provide in writing that the entertainment events vendor shall furnish, upon hiring for the live event pursuant to the contract, the contracting entity with both of the following:

(A) The names of the employees of the entertainment events vendor and the names of employees of any subcontractors.

(B) What training or certification the employee has completed and the date of certification, as specified by this section.

(2) The contract is subject to Section 7928.801 of the Government Code.

(3) The contracting entity may use or disclose to third parties the information provided pursuant to paragraph (1) for the purpose of carrying out the contracting entity’s duties under the contract, including, but not limited to, verifying an employee’s training and certification, but shall not use or disclose the information for purposes unrelated to the contracting entity’s duties under the contract.

AB 2738 also authorizes public prosecutors enforcing Labor Code violations to recover all remedies available under the Labor Code, which would go first to workers for unpaid wages, damages, or penalties, and the remainder to the General Fund. It also authorizes recovery of fees and costs to the prevailing plaintiff in such an action.

AB 2738 Applies To: California employers of any size, specifically entertainment vendors that produce live events at publicly owned and operated venues.

Recommended Actions

• Review contracts for entertainment events to ensure that they are in compliance with this new law.
• Provide Cal/OSHA training as required.

12. SB 1350: Cal-OSHA now covers certain household domestic services

SB 1350, beginning on July 1, 2025, removes the household domestic service exemption from the definition of “employment” for purposes of California’s Occupational Safety and Health Act’s health and safety protections to certain domestic workers.

“Employment” includes household domestic service performed on a permanent or temporary basis, but does not include any of the following: 

(1) Household domestic service that is publicly funded, including publicly funded household domestic service provided to a recipient, client, or beneficiary with a share of cost in that service.

(2) Employment in family daycare homes, as defined in subdivision (a) of Section 1596.78 of the Health and Safety Code.

(3) Individuals who, in their own residences, privately employ persons to perform for the benefit of such individuals what are commonly regarded as ordinary domestic household tasks, including housecleaning, cooking, and caregiving.

Workplace Violence Protections

13. SB 428: Expands circumstances under which employers can seek civil temporary restraining and protective orders on behalf of their employees

SB 428 amends CCP§527.8 to expand protections as follows: “Any employer, whose employee has suffered harassment, unlawful violence, or a credible threat of violence from any individual, that can reasonably be construed to be carried out or to have been carried out at the workplace, may seek a temporary restraining order and an order after hearing on behalf of the employee and, at the discretion of the court, any number of other employees at the workplace, and, if appropriate, other employees at other workplaces of the employer.

SB 428 added “harassment” to former law, with definition as follows: “Harassment” is a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person, and that serves no legitimate purpose. The course of conduct must be that which would cause a reasonable person to suffer substantial emotional distress and must actually cause substantial emotional distress.

SB 248 Applies To: All California employers with 1 or more employees all employees.

“Employer” is defined as every person engaged in any business or enterprise in this state that has one or more persons in service under any appointment, contract of hire, or apprenticeship, express or implied, oral or written, irrespective of whether the person is the owner of the business or is operating on a concessionaire or other basis.

“Employee” means every person, including minors and all person who are not citizens or nationals of the United State, rendering actual service in any business for an employer, whether gratuitously or for wages or pay, whether the wages or pay are measured by the standard of time, piece, task, commission, or other method of calculation, and whether the service is rendered on a commission, concessionaire, or other basis. It also includes the members of boards of directors of private, public, and quasi-public corporations and elected and appointed public officers. For purposes of this section only, “employee” also includes a volunteer or independent contractor who performs services for the employer at the employer’s worksite.

Recommended Action

• Review and revise employers Workplace Violence Prevention Program and handbook policies to comply with this new law.
• Educate leaders, supervisors and HR of these new requirements.
• Respond quickly to harassment and violence complaints from employees and seek legal advice as appropriate to protect victims and co-workers.

Child Labor

14. AB 1880:  Regulates contracts for artistic employment of minors

With the rise of new mediums for artistic performances, legislators updated the law to extend protections against exploitation of minors. The Coogan Act passed in 1999 required that 15% of all gross earnings of an unemancipated minor under contract for artistic or creative services be set aside in a trust established by the parent or guardian for the minor’s benefit.

This bill modifies the definition of the types of contracts to which minors may be employed or agree to render artistic or creative services that trigger a requirement to establish a Coogan trust account to include content creators in paid online content or internet websites, social networks, and social media applications.

A “Content creator” means an individual who creates, posts, shares, or otherwise interacts with digital content on an online platform and engages in a direct contractual relationship with third parties. Content creators include, but are not limited to, vloggers, podcasters, social media influencers, and streamers.

15. AB 3234: Transparency for voluntary social compliance audits

AB 3234 requires an employer that who has voluntarily subjected itself to a social compliance audit, whether the audit is conducted in part, or in whole, to determine if child labor is involved in the employer’s operations or practices, to post a clear and conspicuous link on its internet website to a report detailing the findings of the employer’s compliance with child labor laws. “Social compliance audit” means a voluntary, nongovernmental inspection or assessment of an employer’s operations 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.

This bill requires that report to include, among other things, whether the employer did or did not engage in, or support the use of, child labor and a copy of any written policies and procedures the employer has and had regarding child employees. Child labor means any work performed by a child in violation of state or federal law.

AB 3234 Applies to: All California employers of any size who voluntarily conduct social compliance audits.

Recommended Action

If your company employs minors and conducts voluntary social compliance audits, ensure that the audit reports meet the new requirements of AB 3234.

Also Pay Attention to These New Miscellaneous Rules That Require Immediate Action

New Workplace Notice Requirements

AB 2299 New Whistleblower Poster

New “Whistleblowers are Protected” poster can be found here: Whistleblowers are Protected. This poster complies with AB 2299 and must posted on employee bulletin board by January 1, 2025. It should be printed to 8.5 x 14-inch paper with margins no larger than one-half inch in order to confirm to the statutory requirement that the lettering be larger than size 14-point type.

AB 1870 New Workers Comp Notice Poster

New poster requires notice to injured workers that: (1) they may consult a licensed attorney to advise them of their rights under workers’ compensation laws; and (2) in most instances, attorney’s fees will be paid out of what they recovery as a result of their claims. The amendment to Labor Code section 3550 becomes operative on January 1, 2025. You can access the poster here: – Notice to Employees Injuries Caused By Work.

New California Minimum Wage Rates

California’s State Minimum Wage increases to $16.50 per hour for all employers on January 1, 2025. This impacts the minimum wage for exempt salaried employees who must receive a salary that is at least two times the state minimum wage. Thus, the minimum annual salary for California Exempt Positions (Executive/Managerial, Administrative or Professional) is $68,640. 

If the employer has workers who perform work in certain cities and counties, they must be paid at the local minimum wage rate. Minimum wage rates for fast food and health care industries can be found here: Minimum Wage.

Independent Contractors

SB 988 Establishes the Freelance Worker Protection Act

SB 988 [§18100, et seq. of the Business and Professionals Code] imposes minimum requirements relating to contracts between a hiring party and a freelance worker. A “freelance worker” is defined as a person or organization composed of no more than one person, whether or not incorporated or employing a trade name, that is hired or retained as a bona fide independent contractor by a hiring party to provide “professional services” in exchange for an amount equal to or greater than $250. The sum can be met either by itself or when aggregated with all contracts for services between the hiring party and independent contractor during the immediately preceding 120 days.

“Professional services” has the same meaning as Labor Code §2778 (b)(2).

SB 988 provides the following:

1. The hiring party is required to pay a freelance worker the compensation specified by the contract for professional services on or before the date specified by the contract, or if the contract does not specify a date, no later than 30 days after completion of the freelance worker’s services.
2. Requires that a contract between the hiring party and the freelance worker be in writing and include the following:
   1. The name and mailing address of each party.
   2. An itemized list of all services to be provided by the freelance worker, including the value of those services and the rate and method of compensation.
   3. The date on which the hiring party shall pay the contracted compensation or the mechanism by which the date shall be determined.
   4. The date by which the freelance worker shall submit a list of services rendered under the contract to the hiring party’s internal processing deadlines for purposes of timely payment of compensation.
3. The hiring party shall furnish a signed copy of the written contract, either physically or electronically, to the freelance worker and shall retain the contract for no less than four years.

SB 988 prohibits a hiring party from discriminating or taking adverse action against a freelance worker for taking specified actions relating to the enforcement of SB 988. This bill authorizes an aggrieved freelance worker or a public prosecutor to bring a civil action to enforce the provisions of SB 988.

SB 988 Applies to: Hiring parties that retain the services of a freelance worker to provide professional services except for any of the following:

1. US Government.
2. The State of California or any subdivision thereof.
3. A foreign government.
4. An individual hiring services for the personal benefit of themselves, their family members, or their homestead.

Recommended Actions

• Consult with employment counsel to review existing independent contractor and vendor services agreements to determine if any of your independent contractors provide professional services as defined by L.C. 2778. If so, develop a Freelance Worker Agreement that complies with SB 998.
• Once signed by the hiring party and the freelance worker, provide freelance worker with a signed copy and retain the contract and retain in your files for four years.
• Ensure that those individuals processing payments understand the time deadlines for the contracts that are covered by SB 998 and pay freelance workers as required by the contract.

Cal-Savers Retirement Savings Program

Cal-Savers is retirement savings program for private sector workers whose employers do not offer a retirement plan. Small private employers who employ one or more employees and do not sponsor a retirement plan must register to participate in the program, no later than December 31, 2025. Employers serve a limited role: they facilitate the program by adding and maintaining their employee roster and submitted employee contributions via simple payroll deductions. There are no employer fees and employers to not make contributions to employee accounts. You can find more information about this program here: CalSavers | Employer Information.

Summary: It Pays to Minimize Legal Risks for Small Business Private Employers for 2025 California Employment Laws

It’s important to realize that legal compliance is simply a cost of doing business. Litigation is expensive and time consuming. We understand that laws are complicated and often difficult to understand, even for lawyers. Hopefully, this listing of Top Fifteen 2025 California Employment Laws for small business private employers will make it a little easier to bring your Employee Handbook into compliance. Save this page as a favorite so you can come back to it when issues or questions come up and you want to refer to direct source materials. You might also find our Self-Help Legal Resources useful which includes links to employment agencies.

Need More Help?

Feel free to contact the authors if you have any further questions about these new 2025 California Employment Laws, including applicability to your industry and how to implement them.

Authors: Chuck Farrar, aka The Frog Knows Employment Lawyer and Janice Knight, Senior HR Consultant (Knight Line Consulting)

Contact Chuck (for legal advice) or Janice (for HR compliance prevention strategies) with questions or to schedule an appointment.

Disclaimer

The Law Office of Chuck Farrar provides this Blog/Website post for educational purposes only, as well as to give the public general information and a general understanding of employment laws for small business private employers in California. It is not intended to and does not provide specific legal advice. By using this Blog/Website you understand that there is no attorney client relationship between you and The Law Office of Chuck Farrar. Do not use this Blog/Website as a substitute for competent legal advice from a licensed professional attorney in your state.