As we enter 2025, California business owners face a new landscape shaped by recent legislative changes. These laws bring new compliance requirements and opportunities to refine workplace policies. Our firm has highlighted some critical updates you may need to address to stay informed and aligned with legal standards. 

New Employer Laws Effective January 1, 2025

SB 399: The California Worker Freedom From Employer Intimidation Act

SB 399 introduces critical protections for employees regarding workplace meetings. Key provisions include:

• Prohibition on Forced Meetings: Employers are prohibited from requiring employees to attend meetings designed to express the employer’s religious or political opinions, with limited exceptions. 
• Examples of Forced Meetings: The meetings covered under this act include those where the employer’s intent is to communicate or discuss support for or opposition on political matters, views on legislation, regulations, or ballot measures, and advocacy for or against public policies. It also includes meetings where the intent is to discuss religious matters, support for or opposition to specific religious groups or organizations.
• Employee Protections: Employees cannot face retaliation for opting out of such meetings. Employers must compensate employees who choose not to attend if the meeting occurs during work hours.
• Exceptions: Communications necessary for legitimate business needs, such as job performance or workplace policies, and discussions by religious organizations on matters relevant to their mission or operations.
• Voluntary Meetings: Meetings that are entirely voluntary and non-coercive remain permissible.

Action Item: Review and revise your company’s meeting policies and communication protocols to ensure compliance with this new law.

AB 2499: Expanded Crime Victims’ Rights

AB 2499 significantly broadens the rights of employees who are crime victims by now stating:

• Expanded Sick Leave Usage: Authorizes employees to take time off and use sick leave to support family members who are crime victims.
• Handbook Updates: Expands the permissible purposes for an employee’s personal use of sick leave.

Action Item: Update your employee handbook to reflect these changes, particularly regarding sick leave policies, and communicate these updates to staff. 

Mid-Year PAGA Reforms: AB 2288 and SB 92 (Effective June 19, 2024)

In response to criticisms of the Private Attorneys General Act (PAGA), California enacted reforms that reshape how the law operates. While these changes took effect in mid-2024, they remain highly relevant for 2025 compliance strategies.

1. Stricter Standing Requirements

Plaintiffs must now have personally experienced each alleged Labor Code violation to file claims. This change curbs broad claims for violations they did not directly experience.

2. Adjusted Penalty Structures

• Default Penalties: First violations remain at $100 per employee per pay period, but penalties for subsequent violations now follow a revised structure.
• Isolated Errors: Violations lasting less than 30 days or four consecutive pay periods are capped at $50.
• Wage Statement Errors: Penalties for certain errors are limited to $25 per pay period if employees can readily determine required information.

3. Enhanced Cure Provisions

• Pre-Filing Notice: Employees must notify the California Labor and Workforce Development Agency (LWDA) and employers of alleged violations before filing suit, giving employers a chance to rectify issues.
• Penalty Reductions: Employers who take reasonable compliance steps before or after a notice may face significantly reduced penalties.

4. Early Evaluation Conferences (EECs)

Employers with at least 100 employees can request an EEC, overseen by a neutral evaluator, to resolve disputes early in the litigation process.

5. Increased Employee Share of Penalties

The portion of penalties allocated to employees has increased from 25% to 35%, incentivizing compliance while ensuring workers receive fair redress.

Action Items:

• Audit your labor law compliance processes to identify and address vulnerabilities.
• Establish protocols for responding promptly to PAGA notices.
• Consider participating in EECs for potential cost-effective dispute resolution.

Corporate Transparency Act (CTA) Updates

As of December 2024, the enforcement of the Corporate Transparency Act (CTA) reporting requirements remains uncertain due to ongoing litigation. Initially set to require U.S. businesses, including HOAs, to report detailed personal information about board members to FinCEN by January 1, 2025, the CTA faced legal challenges. A federal court in Texas issued a nationwide injunction halting enforcement, deeming the requirements likely unconstitutional.

Subsequent rulings and appeals throughout the end of 2024 have resulted in fluctuating enforcement status, with FinCEN now stating that companies are not required to report while the injunction remains in effect. The issue may ultimately reach the U.S. Supreme Court.

Action Item: Ensure your documentation is prepared and up to date, as reporting requirements may continue to change unpredictably. Stay informed about any updates to the CTA that could affect compliance.

Looking Ahead

These legislative updates reflect California’s continued emphasis on employee rights and employer accountability. As a business owner, staying proactive and informed is essential to navigate these changes effectively. Our firm is here to assist you in reviewing policies, updating handbooks, and implementing compliance measures to mitigate risks and foster a legally sound workplace.

For more detailed guidance tailored to your business, contact our team of experienced legal professionals today.

– Call us at 805-966-7000 or info@flasllp.com

– Olivia P. Young | OYoung@FLASllp.com | (805) 966-7511

– Natalie N. Mutz | nmutz@flasllp.com | (805)-880-3360