As we enter 2025, significant updates in labor laws are reshaping the landscape of staffing and workforce management, especially in California’s general labor and manufacturing sectors. Employers in these industries must adopt a proactive approach to stay compliant and competitive in an increasingly complex regulatory environment. Here is an overview of the key labor law changes and compliance requirements to keep on your radar.
What Employers Should Know About California Labor Laws and Compliance in 2025
Increased Minimum Wage Requirements
California continues its incremental increases to the state minimum wage. Effective January 1, 2025, the minimum wage for all employers, regardless of size, is $16.50 per hour. However, specific local jurisdictions may mandate higher minimum wages. Additionally, fast-food workers in California are set to receive a minimum wage of $20 per hour starting in 2025. Employers in the manufacturing sector must ensure that piece-rate workers’ total earnings meet or exceed these thresholds.
Expanded Employee Protections under AB 257 (FAST Recovery Act)
The Fast-Food Accountability and Standards Recovery Act, or AB 257, expands protections for workers in the fast-food sector. It establishes a Fast-Food Council to set standards on wages, working hours, and other conditions. The provisions primarily target fast food and do not directly impose new requirements on staffing agencies or manufacturers.
Assembly Bill 701 and Warehouse Quotas
Warehouse employers must comply with AB 701, which regulates productivity quotas. Employers are required to:
- Disclose detailed descriptions of any quotas.
- Ensure quotas do not interfere with legally mandated meal, rest breaks, or safety requirements.
This bill applies specifically to warehouse distribution centers and does not encompass the broader manufacturing sector. Non-compliance may lead to penalties and legal challenges, so maintaining transparency and prioritizing worker well-being is critical.
Updates to Independent Contractor Classification
The classification of independent contractors remains a hot topic in California under AB 5. Courts have continued to refine the “ABC test” for determining contractor status, with stricter enforcement across sectors, including manufacturing and temporary staffing. Employers should:
- Audit their workforce to ensure proper classification.
- Provide benefits and protections to workers previously misclassified as independent contractors to avoid penalties.
No new refinements or stricter enforcement measures specific to 2025 have been introduced.
Mandatory Pay Transparency
Starting in 2025, California employers with 15 or more employees must disclose pay scales in job postings under SB 1162. For the manufacturing sector, this also extends to contract and staffing agencies. To mitigate wage discrimination claims, employers must maintain accurate pay range records and actively ensure pay equity across roles.
Enhanced Workplace Safety Standards
California’s Division of Occupational Safety and Health (Cal/OSHA) has introduced new standards aimed at improving workplace safety, particularly in sectors with high rates of injury such as manufacturing and labor-intensive industries. Key areas of focus include:
- Implement comprehensive safety programs.
- Regularly train employees.
- Document all efforts to maintain compliance.
No specific new standards targeting ergonomic safety or heat illness prevention have been introduced for 2025 beyond existing requirements.
Sick Leave and Family Leave Updates
Under the amended California Family Rights Act (CFRA), more workers are now eligible for job-protected leave to care for family members or for personal health conditions. Additionally, the state’s paid sick leave law has been updated to require a minimum accrual of 40 hours or five days annually, effective January 1, 2025. Employers must adjust their policies to reflect these new minimums.
Action Steps for Employers
To ensure compliance with these new laws and regulations, employers in the general labor and manufacturing sectors should:
- Conduct regular audits of payroll, worker classifications, and compliance practices.
- Update employee handbooks to reflect new legal requirements.
- Invest in training programs for both workers and management on updated laws and safety protocols.
- Partner with legal and HR professionals to monitor regulatory changes and address potential risks proactively.
Conclusion
The labor law changes in 2025 present both challenges and opportunities for employers. By staying informed and implementing compliant policies, businesses can create a safer, more equitable workplace while avoiding costly penalties and fostering employee satisfaction. Taking these proactive steps will ensure that your organization thrives in California’s dynamic regulatory landscape.