Employment Law Updates 2025: Compliance for Remote Teams in California

California remains one of the most complex regulatory environments for employers in the world. As we settle into 2025, the legislative landscape has shifted yet again, introducing a suite of new bills, compliance mandates, and judicial rulings that directly impact how businesses manage their workforce.

For organizations with remote teams, the challenge is twofold: navigating state-wide mandates while addressing the unique nuances of a distributed workforce. From the new Freelance Worker Protection Act to significant shifts in leave laws and wage standards, the cost of non-compliance has never been higher.

This guide provides a detailed breakdown of the critical employment law updates effective January 1, 2025. It is designed for HR directors, business owners, and legal counsel seeking to mitigate risk and ensure seamless operations.

(Disclaimer: This content is for informational purposes only and does not constitute legal advice. Always consult with qualified employment counsel regarding specific organizational risks.)

The Economic Baseline: Minimum Wage and Salary Thresholds

The foundation of compliance begins with compensation. Effective January 1, 2025, the landscape for wages in California has adjusted, affecting not only hourly workers but also the classification of exempt employees.

State-Wide Minimum Wage Increase

As of January 1, 2025, the California state minimum wage has increased to $16.50 per hour for all employers, regardless of headcount. This eliminates the tiered system based on employer size that existed in previous years.

Impact on Remote Teams:

For remote employees working from home within California borders, this rate is the absolute floor. However, employers must be vigilant regarding “local living wage” ordinances. Remote workers are generally subject to the minimum wage laws of the city or county where they physically perform the work, not where the company headquarters is located.

Action Item: Audit your payroll software to ensure it tracks the physical location of remote employees. If a remote worker lives in West Hollywood or Berkeley, the local minimum wage may significantly exceed the state’s $16.50 standard.

The Exempt Salary Threshold

The rise in minimum wage triggers a mandatory increase in the minimum salary required to classify an employee as “exempt” (white-collar exemptions). In California, an exempt employee must earn no less than two times the state minimum wage for full-time employment.

• Calculation: $16.50/hour x 2 x 2,080 hours.
• New 2025 Threshold: $68,640 per year.

If your remote managers or administrative staff are currently earning $65,000, they are likely misclassified as of January 1, 2025. You must either raise their base salary to meet the new threshold or reclassify them as non-exempt, hourly employees eligible for overtime.

SB 988: The Freelance Worker Protection Act

Status: Effective January 1, 2025

The “gig economy” has matured, and California legislation is catching up. Senate Bill 988, known as the Freelance Worker Protection Act, imposes strict requirements on how companies engage with independent contractors. This is arguably the most significant shift for businesses that rely on remote freelancers for marketing, design, or IT support.

Who Is Covered?

The law applies to a “hiring party” retaining a “freelance worker” for professional services valued at $250 or more (either in a single contract or aggregate over 120 days).

Core Requirements for Employers

1. Mandatory Written Contracts: You must have a written agreement. Handshakes or email threads are no longer sufficient for compliance. The contract must include:
   • Names and mailing addresses of both parties.
   • Itemized list of services.
   • Value of services and method of compensation.
   • Date by which the freelancer must submit a list of services rendered (invoice).
   • Date by which payment will be made.
2. 30-Day Payment Rule: If the contract does not specify a payment date, the hiring party must pay the freelancer no later than 30 days after the completion of services.
3. Anti-Retaliation: It is illegal to penalize a freelancer for asserting their rights under this act.

Risk Analysis:

Failure to provide a written contract triggers a statutory penalty of $1,000 upon the freelancer’s request. Failure to pay on time can result in damages equal to twice the unpaid amount.ShutterstockExplore

SB 1100: Discrimination and Driver’s Licenses

Status: Effective January 1, 2025

In a push to remove barriers to employment, SB 1100 amends the Fair Employment and Housing Act (FEHA). It prohibits employers from including a statement in job advertisements, postings, or applications that an applicant must possess a driver’s license.

The Exceptions

Employers may only require a license if:

1. The employer reasonably expects driving to be one of the job functions for the position.
2. The employer reasonably believes that satisfying the job function using an alternative form of transportation (e.g., ride-sharing, public transit, biking) would not be comparable in travel time or cost.

Remote Work Implication:

For fully remote roles, requiring a driver’s license for identification purposes is standard during onboarding (I-9 verification), but it cannot be a barrier to apply or a requirement of the job itself. Review your job descriptions for “Must have reliable transportation” or “Valid Driver’s License required” clauses. If the employee works from their home office, these requirements are likely non-compliant and discriminatory under the new statute.

AB 2499: Expanded Leave for Victims of Violence

Status: Effective January 1, 2025

Assembly Bill 2499 significantly alters the landscape of protected leave. It moves the enforcement of leave for victims of crime and abuse from the Labor Code to the FEHA, placing it under the jurisdiction of the California Civil Rights Department (CRD).

Key Changes

• Broader Definition: The law now covers “qualifying acts of violence,” extending protections beyond domestic violence and sexual assault to include acts involving bodily injury, brandishing of weapons, or threats of force.
• Family Coverage: Employees may now take leave to care for a family member who is a victim of a qualifying act of violence.
• Notice Requirements: Employers must provide notice of these rights to new hires and to current employees upon request.

Compliance Strategy:

Update your Employee Handbook immediately. The CRD is expected to release a model form. Ensure your HR team understands that “safety accommodations” under this law can apply to remote workers. For example, if a remote employee is a victim of stalking, they may request a change in their company-listed phone number or email address as a safety accommodation.

AB 2299: Whistleblower Rights Notification

Status: Effective January 1, 2025

California continues to strengthen whistleblower protections. AB 2299 mandates that the Labor Commissioner develop a model list of employee rights and responsibilities regarding whistleblower laws.

Employers are required to post this specific notice. For remote teams, “posting” means electronic accessibility.

Best Practice: Do not rely on a static intranet page that no one visits. Distribute the updated 2025 Employment Law Poster (digital version) via email with a read-receipt or host it on your HRIS dashboard where employees log in daily.

SB 1137: Intersectionality in Discrimination

Status: Effective January 1, 2025

This bill clarifies existing anti-discrimination laws to explicitly recognize “intersectionality.” It acknowledges that discrimination often occurs not just based on a single trait (e.g., race OR gender) but on a combination of traits (e.g., a Black woman may face unique discrimination distinct from Black men or white women).

While this concept has been recognized in case law, codifying it into the FEHA, Unruh Civil Rights Act, and Education Code lowers the hurdle for plaintiffs to bring complex discrimination claims.

Training Update:

Your anti-harassment training modules need to be updated. Ensure that examples used in manager training reflect intersectional scenarios. This is particularly relevant for remote teams where communication is often asynchronous and text-based, leaving more room for misinterpretation or bias in performance reviews.

SB 553: Workplace Violence Prevention (Year 2 Focus)

Status: Enforcement Ongoing

While SB 553 technically became effective July 1, 2024, 2025 is the year of rigorous enforcement. Every California employer (with limited exceptions) must have a written Workplace Violence Prevention Plan (WVPP).

The Remote Work Nuance

The text of SB 553 generally exempts employees teleworking from a location of their choice that is not under the control of the employer. However, many companies operate hybrid models.

• Scenario: A remote employee comes into the office for a quarterly meeting.
• Compliance: During that visit, they are covered by the WVPP.

Furthermore, “workplace violence” includes threats made via Slack, Zoom, or email. Your WVPP must outline how to report and investigate digital threats. If a remote employee is threatened by a client over a Zoom call, your plan must dictate the response protocol.

The “Captive Audience” Ban (SB 399)

Status: Currently Enjoined (Blocked)

SB 399 aimed to prohibit “captive audience” meetings—mandatory meetings where the employer shares their views on religious or political matters, including unionization.

Current Legal Status:

As of late 2024, a federal judge issued a preliminary injunction blocking the enforcement of SB 399. The court found it likely preempted by the National Labor Relations Act (NLRA) and potentially a violation of First Amendment rights.

Advisory: While the state cannot currently enforce this ban, employers should proceed with caution. The legal battle is ongoing. If you plan to hold mandatory meetings regarding union drives or political issues, consult with counsel to monitor the status of the injunction.

Remote Expense Reimbursement (Labor Code 2802)

Status: Evergreen High-Risk Area

While not a new 2025 statute, Labor Code Section 2802 remains the number one source of PAGA (Private Attorneys General Act) lawsuits for remote employers.

The law requires employers to indemnify employees for all necessary expenditures incurred in direct consequence of their duties. For remote workers, this includes:

• Internet bandwidth.
• Cell phone usage.
• Electricity/Utility usage (in some interpretations).
• Office equipment.

The “Reasonable Percentage” Rule:

You are not required to pay the employee’s entire internet bill, but you must pay a “reasonable percentage” reflecting work usage. A flat stipend (e.g., $50/month) is the most common defense strategy, but it must be defensible based on actual costs.

2025 Strategy: Review your stipend policy. Inflation impacts utility and internet costs. A stipend set in 2020 may no longer be considered “reasonable” by a court in 2025.

2025 Compliance Checklist for HR Leaders

To assist in your immediate operational shifts, use this checklist to gauge your readiness.

Compliance Area	Action Item	Deadline
Minimum Wage	Audit payroll for $16.50 floor and local ordinances.	Jan 1, 2025
Exempt Status	Verify all exempt staff earn >$68,640/yr.	Jan 1, 2025
Contractors	Implement written contracts for all freelancers >$250.	Jan 1, 2025
Hiring	Remove driver’s license requirements from job posts.	Immediate
Employee Handbook	Update policies for Victims of Violence Leave (AB 2499).	Q1 2025
Workplace Violence	Ensure digital threats are covered in your WVPP.	Ongoing
Posters	Distribute digital Whistleblower & Workers Comp notices.	Jan 1, 2025

FAQ: California Employment Law 2025

Q: Does the new minimum wage apply to remote workers living outside of California?

A: Generally, no. Employment laws are typically governed by the location where the work is performed. If your employee lives in Nevada, they are subject to Nevada’s wage laws, though many California companies choose to pay the California rate to maintain equity.

Q: Can we mandate a “camera on” policy for remote workers?

A: Yes, but with caveats. While employers can set performance standards, excessive surveillance can trigger privacy concerns. Additionally, if the video background reveals protected classes or political affiliations, it could complicate discrimination claims.

Q: Are we required to pay for a remote employee’s standing desk?

A: Under Labor Code 2802, if the item is “necessary” for the job, yes. If the employee simply prefers a standing desk but could work at a standard table, it may not be reimbursable. However, if it is a reasonable accommodation for a disability, it falls under the ADA/FEHA interactive process.

Q: What is the status of the PAGA reform?

A: Significant PAGA reforms were enacted in 2024 (AB 2288 and SB 92), allowing employers who take “all reasonable steps” to comply to significantly reduce penalties. This makes internal audits in 2025 more valuable than ever, as a proactive audit can be a defense against massive penalties.

Q: How do we handle meal breaks for remote workers?

A: California’s strict meal and rest break laws apply to remote workers. The challenge is tracking. Employers should use time-keeping software that requires employees to “clock out” for lunch and sign attestations that they were provided a compliant break.