2025 Labor & Employment Law Update for California Employers

The Allen Matkins Labor & Employment Practice provides annual updates to California law on amended discrimination laws, captive audience bans, freelance worker protections, and updated leave requirements.

Fair Employment and Housing Act Amendments

New Limitations on the Ability to Require a Driver’s License

Senate Bill 1100 amends the Fair Employment and Housing Act (FEHA) to prohibit employers from requiring job applicants to possess a driver’s license unless: (1) driving is reasonably expected to be a function of the job applied for and (2) using an alternative form of transportation such as a ride hailing service, taxi, carpooling, walking, or bicycling “would not be comparable in travel time or cost to the employer.” Employers should work with counsel to ensure that job postings, applications, hiring materials, and company policies comply with this amendment.

California Recognizes Intersectionality Protection

California law has long prohibited discrimination based on various protected characteristics, including, among others, gender, disability, age, and race. Senate Bill (SB) 1137 amends the FEHA, Unruh Act, and Education Code to clarify that these anti-discrimination statutes extend to protect individuals from discrimination based not only on a single protected characteristic but also based on the intersectionality (combination) of two or more protected characteristics enumerated in the statutes. SB 1137’s clarification of California’s existing discrimination laws also codifies the Ninth Circuit opinion in Lam v. University of Hawai’i (9th Cir. 1994) 40 F.3d 1551, which found that discrimination and harassment may be predicated upon the combination of protected characteristics.

Expanded CROWN Act and Race Protections

AB 1815 amends the FEHA to expand the definition of “race” to be “inclusive of traits associated with race, including but not limited to hair texture and protective hairstyles.” Existing law had more narrowly defined “race” to include traits “historically” associated with race.

Employers should review their existing policies to ensure compliance with all amendments to the FEHA.

Captive Audience Ban

SB 399 enacted the California Worker Freedom from Employer Intimidation Act. This new law prohibits employers from subjecting an employee to (or threatening that employee with) disciplinary action or termination for the employee’s refusal to attend an employer-sponsored meeting, the purpose of which is to communicate the employer’s views and positions on political or religious matters. The law defines “political matters” to include 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. Certain religious, political, and educational institutions are exempted from the new law. The law imposes civil penalties of $500 per employee for each violation.

This law curtails “captive audience” meetings during which employers require employee attendance and provide information to employees about labor unions and related matters, even if the employer schedules those meetings during work hours and compensates the employees for their time in attending the meetings.

Freelance Worker Protection Act

SB 988 amends the Business and Professions Code to add protections for “freelance workers,” defined as individuals who are hired or retained as bona fide independent contractors to provide professional services for $250 or more. This law imposes minimum requirements for contracts between a hiring party and a freelance worker, including regarding timing for payment for services, requirements of certain terms in writing, and a four-year document retention period. The law also includes monetary penalties for violations of the minimum requirements. California employers should consult with counsel regarding worker classification and compliance with the new requirements for freelance workers.

Paid Family Leave and Vacation

AB 2123 eliminates the ability of employers to require that employees use up to two weeks of vacation before receiving Paid Family Leave benefits. The change applies to any periods of disability commencing on or after January 1, 2025. Employers should revise leave documents, policies, and procedures to comply with this change.

Amendments to Victim-Related Leaves

AB 2499 expands the list of crimes for which employees can take time off under the Healthy Workplaces, Healthy Families Act and allows employees to take protected time off to assist certain family members who are victims of specified crimes. The law expands the definition of “victims” to include “qualifying act of violence” (QAV), which is defined as “domestic violence; sexual assault; stalking; or an act, conduct, or pattern of conduct that includes any of the following: (i) bodily injury or death; (ii) exhibiting, drawing, brandishing or using a firearm or other dangerous weapon against another; or (iii) using or making a reasonably perceived or actual threat of use of force against another to cause physical injury or death.”

Employers with 25 or more employees have additional obligations regarding time off for up to 12 weeks for employees who are victims of QAV, and in most cases up to 10 days where an employee’s family member is the victim of QAV. Employers will be required to provide notice to employees of AB 2499’s protections by July 1, 2025, and should update their policies and practices accordingly.

New Fair Chance Ordinances: Los Angeles and San Diego County Unincorporated Areas

Earlier this year, Los Angeles and San Diego Counties each passed fair chance ordinances applicable to businesses with five or more employees operating in unincorporated areas of their counties.

The Los Angeles County Fair Chance Ordinance for Employers went into effect on September 3, 2024. Key provisions include a prohibition on including language in job postings that excludes or discourages individuals with criminal histories from applying to jobs (subject to limited exceptions) and new employer posting and notification requirements regarding post-offer inquiries into criminal history.

The San Diego County Fair Chance Ordinance went into effect on October 10, 2024. Key provisions include a documentation requirement for individualized assessments and restrictions on filling an open position during the five-business-day response period following a job offer revocation under the law.

Covered employers operating in unincorporated areas of Los Angeles and San Diego Counties should review hiring practices to ensure compliance.

California employers are encouraged to consult with employment counsel to ensure compliance with these new and amended laws.