As we approach 2025, California businesses must prepare for several significant legal changes that will impact operations, employment practices, and compliance requirements. Staying informed about these updates is crucial to ensure smooth transitions and avoid potential legal pitfalls. This comprehensive guide outlines the key changes in California business law effective January 1, 2025, providing actionable insights for business owners and managers.
1. Minimum Wage Increase
Effective January 1, 2025, California’s minimum wage will increase from $16 to $16.50 per hour. Additionally, if Proposition 32 is approved, the minimum wage for employers with 26 or more employees would increase to $17 per hour for the rest of 2024 and would rise to $18 per hour starting in January 2025. HR Dive
2. Salary Threshold for Overtime Exemption
The salary threshold for overtime exemption will increase to $68,640 on January 1, 2025. HR Dive
3. Ban on Captive Audience Meetings
Senate Bill (SB) 399, known as the California Worker Freedom from Employer Intimidation Act, prohibits employers from requiring employees to attend meetings or participate in communications concerning the employer’s opinions on religious or political matters, including unionization. Employers are also prohibited from retaliating against employees who refuse to attend such meetings. DLA Piper Knowledge
4. Expansion of Anti-Discrimination Protections
SB 1137 clarifies that California’s anti-discrimination laws prohibit discrimination not just on the basis of individual protected traits but also on the basis of the intersectionality (combination) of two or more protected traits. Jackson Lewis
5. Changes to Paid Family Leave (PFL) Benefits
Effective January 1, 2025, employers can no longer require employees to use up to two weeks of accrued vacation prior to receiving PFL benefits, making the benefits immediately available. Dinsmore
6. Social Audits and Child Labor Reporting
Assembly Bill (AB) 3234 introduces new reporting requirements for employers who have voluntarily undergone a social audit, particularly regarding the employment of child labor. This law aims to increase transparency and accountability in labor practices. California Employment Law Report
7. Data Broker Registration and Deletion Mechanism
The California Delete Act (SB 362) requires data brokers to register with the California Privacy Protection Agency annually beginning January 2024 and process deletion requests submitted through a centralized deletion mechanism beginning August 2026. This law aims to provide consumers with greater control over their personal information. Wikipedia
8. Cannabis Lounges and Cafes
Assembly Bill 1775, effective January 1, 2025, allows licensed dispensaries and cannabis lounges to prepare and sell non-psychoactive food and drinks while hosting live music and performances, similar to Amsterdam-style cannabis cafes. This legislation aims to boost revenues for legal dispensaries and provide consumers with enhanced experiences. Eater LA
9. Emissions Reporting Requirements
California’s Legislature has decided not to delay the implementation of greenhouse gas emissions reporting requirements, maintaining the 2026 deadline for initial disclosures. Companies are required to report both direct (Scope 1 and 2) and indirect (Scope 3) emissions, impacting public and private firms with over $1 billion in revenue operating in California. The Wall Street Journal
10. Digital Content Licensing Disclosure
Assembly Bill 2426 requires digital storefronts to inform customers that they are licensing digital content rather than owning it. Starting next year, terms like “buy” or “purchase” can only be used if accompanied by a specific disclosure of the licensing nature and any associated restrictions. This move aims to prevent misleading practices and protect consumers. The Verge