California’s 2025 employment law updates address at-will status, contracts, workplace leave, wage rules, and discrimination protections. This overview covers employer duties and employee rights on sick leave, terminations, drug policies, family care, and work conditions.
By Brad Nakase, Attorney
Email | Call (800) 484-4610
Have a quick question? We answered nearly 2000 FAQs.
An “agreement by a party, who is identified as the employer, employs another, who is termed the employee, to accomplish anything for the profit of the employer/company or a third person” is what is known as an employment contract in California. Written employment contracts are required for commission-based positions.
In the absence of a clear contract outlining the duration of work or reasons for termination, California presumes at-will employment. A stated term of employment is one that lasts more than a month. This implies that either side may end the partnership at any moment, for any reason, or for no reason at all.
When an at-will worker is fired in California, they are only eligible to be compensated for the work they performed till the dismissal. Additionally, an at-will worker who leaves their job during their time with the company is only eligible for benefits till the day of their departure.
At-will employment has a number of restrictions and exceptions recognized by California courts. Legally prohibited, invidious discriminatory sentiments, such as hostility toward a specific gender or race, cannot be the reason for terminating an employee.
In addition, if an employee’s termination goes against a significant public policy, they may pursue a tort lawsuit against their company. For an employee to successfully file a claim of unfair dismissal pursuant to the public policy exemption, they must demonstrate that: (a) the policy they violated or declined to violate is outlined in California employment law, either by regulation or an article of the constitution; (b) the policy serves the general population; (c) the policy is basic and significant; and (d) the policy had been in place at the point of termination. The employee also needs to be able to clearly demonstrate how their conduct in defending the policy led to their dismissal.
An implicit contract may be used to circumvent the assumption of at-will employment. If the parties agree on certain terms of employment, it creates an implicit contract between them. During the assessment, the court will review aspects such as a company’s usual ways of doing business, the length of the employee’s service, anything that suggests the worker was guaranteed long-term employment, and the practices prevalent in the industry.
Should there have been a written or understood agreement about employment, an employee might have a case for wrongful dismissal against the employer for breaking the promise to treat them fairly. Employers who dismiss an employee without a valid reason are acting against the guidelines of fair dealing and good faith.
In California, as stated by the FEHA (Fair Employment and Housing Act), someone cannot be discriminated against because of race, religion, creed, national origin, color, ancestry, mental or physical disability, genetic information, medical condition, sex, gender, marital status, gender expression, gender identity, sexual orientation, age, reproductive decision-making, or veteran or military status.
Gender identity refers to the way someone views their own gender, from within. Some examples are being male, female, a mix of the two, having no gender, having a gender not given at birth, or being transgender. In addition to other things, “sex” covers pregnancy, childbirth, medical issues linked to these, or breastfeeding, as well as a person’s gender, gender identity, or how they express their gender, along with opinions from third parties touching on any of these.
In addition, employers are not allowed to treat transgender workers unfairly. “Transitioning” refers to the process that transgender persons go through to start living like the gender they identify with instead of the sex given to them at birth. Changes in identification and pronoun use, facility use, involvement in company-sponsored events (e.g., sports, team-building exercises, or volunteer work), hormone therapy, surgery, or additional medical procedures are a few examples of this process.
According to SB 1100, the FEHA will forbid employers from stating in job materials that a candidate must possess a driver’s license as of 1st January 2025, unless the company has a reasonable expectation that the position will call for driving and a reasonable belief that using a different mode of transportation to fulfill that job function would not involve an equivalent amount of travel time or expense for the employer.
SB 988 will establish minimum standards for agreements between an employing party and a freelancer, effective 1st January 2025. As a legitimate independent contractor, a “freelancer” is someone who is employed or retained by an employing party to perform professional services for a sum of $250 or more. SB 988, in particular, mandates that an employing party pay a freelancer compensation outlined in the professional services contract before or on the dates indicated in the agreement, or, in the absence of an agreement, not later than thirty days after the worker’s services are completed.
A freelancer who undertakes specific activities connected to the execution of these laws is likewise prohibited from being subjected to discrimination or unfavorable action by the hiring party, according to the bill.
Employers are not permitted to utilize E-Verify to confirm the employment permit status of a candidate who was not offered a job or a current worker unless they are mandated to do so by federal law or as a requirement of receiving federal money. Following an offer to the applicant, an employer may use E-Verify to confirm the candidate’s employment authorization status in compliance with federal regulations.
An employer is required to notify the worker as soon as reasonably possible of any uncertain non-confirmation or announcement from the Department of Homeland Security or the Social Security Administration that contains information unique to the worker’s case.
A civil fine of as much as ten thousand dollars might be imposed for each infraction of the E-Verify regulation.
Employers in California are permitted to administer drug tests to workers as a requirement of employment. If an employee’s drug use is reasonably suspected, the employer may demand a drug test after the person is hired. Random drug screening is prohibited under the worker’s constitutional right to privacy, unless there are specific exceptions, including in highly responsible public positions or positions involving public safety.
Procedures must be put in place by any employer who obtains medical data to protect its confidentiality against misuse and disclosure. No employee will face discrimination because they chose not to sign a written consent. An employer, however, has the right to reject a candidate or worker who declines to give permission for the employer to see the outcomes of drug testing.
A worker cannot be punished by their employer for asking to be allowed off work to serve on a jury, provided they inform the employer ahead of time. Workers are not given paid leave for jury duty, but they may still take time off using their vacation days or unpaid leave. The California employment law does not specify how many times a year an employee can be absent for jury duty.
If a worker in California does not have enough time beyond their work hours to cast a ballot, they are entitled to earned time off. The maximum amount of time that must be paid for is two hours. Workers must give their employer two business days advance notice if they anticipate needing time off to cast their ballot on the day of the election.
According to California employment law, businesses are not allowed to create, implement, or enforce any rules, policies, or guidelines that would limit or prohibit their employees from being involved in politics or running for public office. Additionally, companies are not allowed to guide or control their employees’ political beliefs or actions.
If a worker witnesses a crime and testifies in a court case, the employer is not allowed to mistreat them or act unfairly for that reason. Likewise, companies cannot refuse to give time off to someone suffering from harassment at work. A restraining order, an interim restraining order, or additional injunctive remedy to help protect the victim’s or children’s safety, health, or welfare are examples of relief.
Additionally, companies with at least twenty-five workers are prohibited from firing, discriminating against, or retaliating against a victimized worker for availing time off to: look for medical care for injuries sustained in a crime or abuse; seek assistance from a household violence housing, initiative, rape support center, or victim support organization as a consequence of the offense or abuse; seek psychological therapy or mental health care related to an incident involving criminal activity or abuse; or engage in security preparation and take other steps to increase security from potential crimes or abuse, such as interim or permanent shifting.
Unless it is impractical, the worker must give the company a reasonable amount of notice in advance before taking time off.
When a parent of a student takes time off with appropriate notice to attend the student’s school after the student has been suspended, the company is not allowed to fire them or treat them unfairly.
Employers with more than 25 staff members at the same place are prohibited from firing or discriminating against workers who are parents of one or more K-12 children or authorized childcare providers for taking a maximum of forty hours annually for specific child-related endeavors. These activities include finding, enrolling, or re-enrolling their child in school or in an authorized child care facility, or participating in school or child caretaker activities if the worker gives the company adequate notice of the planned leave (no more than eight hours in a calendar month).
Taking time off to act as a volunteer fireman, reserve peace officer, or emergency rescuer is something every California employee may legally do. Unless the company is an organization that ensures public safety, the right is not protected in such cases.
Employers with fifty or more workers must allow their volunteer firemen, emergency rescue individuals, or reserve peace officers to take short leaves of absence, a maximum of fourteen days each year, to carry out their obligations.
Employers who employ a minimum of fifteen individuals are prohibited from discriminating against or terminating members of the Civil Air Patrol due to their membership, and they are also prohibited from impeding or preventing a member from serving as a member of the Civil Air Patrol while on a crisis mission. Workers who have worked for their employer for a minimum of ninety days before taking a leave of absence are eligible.
If an employee wants to voluntarily enroll in and engage in a drug or alcohol rehabilitation program, any employer employing 25 or more workers must make reasonable accommodations for them, so long as doing so does not place an unreasonable burden on the business.
Employers who allow sick leave must allow workers to use sick days accrued over a minimum of six months at their present level of entitlement to treat a family member’s illness or preventive care, including care for victims of sexual assault, domestic abuse, or stalking.
Employers with at least fifteen workers are required to offer paid time off to workers who donate organs (up to thirty working days in a year) or bone marrow (up to five working days in a year) in order to donate the bone marrow or organ to another individual.
If an employee donates their organs again within a year, they are eligible for a further thirty days of unpaid time off.
Employers cannot legally deny a worker who is disabled due to childbirth, pregnancy, or an associated medical condition the opportunity to take a leave of absence for a reasonable amount of time, no more than four months, and then return to their job. During this period, workers are allowed to use any leave that has been accrued.
Furthermore, it is illegal for any company with more than one worker to retaliate against an employee for exercising her entitlement to a suitable accommodation, or to intimidate, prejudice against, reject, interfere with, or restrict a worker’s entitlement to an appropriate accommodation, movement, or take pregnancy impairment leave. This covers a worker’s or applicant’s actual or anticipated pregnancy, delivery, lactation, or any associated conditions.
When a medical professional believes that, because of pregnancy, a woman is physically unable to complete any or all the main tasks in her job or that she may harm herself, her pregnancy, or others while completing these tasks, the woman is considered disabled due to pregnancy.
Additionally, being pregnant may be considered a disability for an employee if a doctor says the employee is experiencing morning sickness or needs to take time off during pregnancy or after delivery, due to gestational diabetes, needing bed rest, high blood pressure set off by pregnancy, preeclampsia, postpartum depression or recovery from any of these.
The situations above are just examples and do not include every possibility. A transgender person with pregnancy-related disabilities is not excluded by anything in this article.
For someone to be eligible for disability leave, transfer, or reasonable accommodation, there are no prerequisites (such as the term of employment).
According to the CFRA (California Family Rights Act), it is illegal for public and private employers in California with five or more workers to deny a request from a worker who satisfies certain requirements for taking a maximum of twelve work weeks in a twelve-month period for private medical leave or taking care for someone in their family.
The legislature of California broadened the definition of “family member” in 2022 to encompass a designated individual. “Designated person” refers to any individual who is either blood-related to the employee or whose relationship with them is comparable to a family connection. The worker may name the selected individual when they submit their leave request. For medical leave and family care, a company may only assign one designated individual each 12-month timeframe.
Workers who have worked a minimum of 1250 hours over the course of the previous 12 months and have been working for 12+ months are qualified for leave. When a child is born, placed in foster care or adoption, or when a major health issue affects the employee, their child, or the child of their enrolled domestic partner, parent, spouse, or registered domestic partner, qualified workers may take time off. They may also take time off for a qualifying emergency.
Employees who have worked for over twelve months for a company that directly hires a minimum of five individuals to provide services for pay and who have put in a minimum of 1,250 hours in the preceding 12 months are eligible to take a maximum of twelve workweeks for medical or family care leave during any 12-month period.
However, paid time off for parents is not a requirement for California companies. During a leave of absence, a worker may be obliged or choose to use vacation time or other accumulated time off. AB 2123 states that an employer cannot mandate a worker to use accumulated vacation leave before 1st January 2025. During medical or family care leave, an employer is required to keep a staff member’s medical insurance coverage.
While workers in California are on paid family leave, they may be partially paid by the Employment Development Department. For a worker to qualify for the program, their wages must have exceeded $300 in the past 12 months.
They must also be taking time off to care for an immediate family member who is very ill, to spend time with a new child, or to take part in an eligible situation that is brought on by a family member’s military service abroad. Under California employment law, eligible workers will get between 60 and 70% of their typical weekly salary for a maximum of eight weeks.
When performing certain military obligations, any staff member who serves in the National Guard, Naval Militia, or Reserve Division of the Armed Forces is eligible for a maximum of 180 calendar days of intermittent unpaid military absence. When they return, the worker will have the unalienable right to be put back in their previous role. The worker will be eligible for a position with comparable seniority & status if that position is eliminated.
During an authorized leave period, companies with at least 25 workers are required to grant an eligible worker up to 10 days of unpaid leave. A qualifying worker is the partner of a stationed military member who works at least twenty hours a week on average, and notifies the employer in writing of their intention to take leave within a two-day period after getting official notification that the eligible member is going on leave from deployment, and presents written documentation attesting to the spouse’s break from deployment.
Individuals working for their employer, part-time or full-time, for 30 days or more, can use paid sick leave. Effective from 1st January 2024, each company must give its workers 40 hours or five days off for sickness each year. One hour of sick leave is accrued for every thirty hours worked, starting on your first day of work.
The ninetieth day of service is when an employee can start taking paid sick leave. Although it might be restricted to eighty hours, paid sick leave could be rolled over into the following year. If an employee is granted five days or forty hours of leave at the start of the twelve-month term, there is no need for accrual or rollover.
California does not mandate that employers offer unpaid or paid vacation time to their employees. All accrued and unused days of vacation must be distributed upon termination if the employer offers paid time off; vacation money cannot be revoked.
Smoking tobacco is prohibited at your workplace or in any small space in California. Employers must take action to prevent smoking in closed work environments by, for example, putting up signs.
Employers are required to allow a fair amount of time for breaks for workers who wish to provide breast milk whenever necessary. The break time will run simultaneously with other designated rest and eating times, and it will be paid if more time is required. Employers are also required to give nursing staff members a room, other than a restroom, in which to express their milk. These requirements may not apply to a business with fewer than fifty employees if making such accommodations would put the employer through undue hardship by making their operations significantly more difficult or expensive.
If a worker does more than 5 hours a day, they need at least a 30-minute meal break; however, those who work less than 6 hours are exempt from this requirement. If someone works more than ten hours per day, they are entitled to take a thirty-minute secondary work break.
Employees who have not skipped their initial meal break and whose workday is less than twelve hours may skip their second break.
California employment law mandates that firms pay their workers a minimum of $15 per hour, regardless of the size of their workforce. Additionally, an employer is not permitted to accept, collect, or accept a tip intended for a worker, nor is it permitted to deduct a gratuity from an employee’s pay.
When an employee puts in over eight hours of work per day or forty hours in a workweek, they are entitled to compensation that is 1.5 times their ordinary daily wage. You will be paid twice your usual rate of pay for any work that exceeds 12 hours per day.
Every employer is required to create and maintain, for a minimum of three years, a file of each worker who works for them. This record must include the worker’s name, place of residence, and occupation, as well as the worker’s wage rate, daily gratuities, age of any minor workers, and the sum of money paid to each worker each pay period.
When an employee is fired by their company in California, they must provide their last paycheck right away for any wages that were earned but not yet received at the point of the termination. A group of workers who are laid off by an employer for the conclusion of seasonal work in the curing, preserving, or storing of perishable commodities may receive immediate compensation within the allotted time frame, which should not be more than 72 hours.
Those who were forced to quit their jobs due to circumstances beyond their control might get income from benefits from unemployment insurance. The benefits are meant to help make up some of the lost income while a jobless person looks for other employment or until their employer calls them back to work. This coverage is paid for with no money taken out of the employee’s paycheck.
Employers in California are responsible for paying workers’ compensation for any injuries they receive while on the job and for any staff member’s death if the harm directly causes the worker’s demise. An employee has no other recourse against the company than this.
California employment law typically sets a minimum age of 14 for lawful work in specific occupations. Young people between 14 and 17 who want to work in the field of entertainment need to have a work permit. Workplaces that employ juveniles are subject to limitations, as are the periods of the day the child is permitted to labor.
Employers who have concealed-carry permits are not required by California’s “guns at work” rule to let workers leave their firearms in their secured cars in the company parking lot. Consequently, an employer has the authority to forbid a worker from carrying a weapon on the job.
Federal, state, and municipal governments/agencies are exempt from the rule that private employers cannot make a lie detector or polygraph test a requirement of employment.
Employers are prohibited from discriminating against workers based on their sex by paying them less than they do workers of the other sex for equivalent labor on tasks that demand equal responsibility, skill, and effort.
If a business demonstrates an arrangement based on merit, seniority, amount or quality of production, or variations in education, training, or experience, then charging opposite-sex workers differently for doing the same work on identical duties can be allowed.
Non-solicitation and other non-compete agreements are generally prohibited in California. Section 16600 states that “any agreement by which someone is restricted from participating in a lawful occupation, business, or trade of any type is to be considered void.” Only a few exceptions exist.
1. Demise and Incapacity
When an employee is informed of their employer’s death or their legal inability to carry out a contract, their employment in California ends.
When protecting the employer’s replacement from severe harm, a worker must keep up with their duties as a worker until a reasonable amount of time has passed after notification of the details has been conveyed to the successor, even if the employer has died or is incapable of carrying out a contract. According to the terms of their contract of employment, the successor will pay the worker for this period.
2. Job for a Certain Duration
If a company in California finds a valid contract of employment that is not at-will, they can end the worker’s employment before the expiration date of the agreement if the employee has committed a willful violation of duty, consistently neglected their responsibilities, or is incapable of performing their duties. A contract may be terminated by an employee for a predetermined period of time if the employer willfully or permanently breaches their obligations.
3. Marijuana
Employers are prohibited from discriminating against workers in any kind of job action (recruiting, termination, or terms of employment) on the basis of their consumption of cannabis outside of work or before they were hired, as of 1st January 2024. Employers may continue to implement a drug-free workplace policy and fire workers who use cannabis or are under the influence of alcohol while on the job.
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