Navigating California’s New Laws for Small Businesses
Several new laws taking effect in 2025 will impact California’s small businesses:
Minimum Wage Increase
The state minimum wage will increase to $16.50 per hour for all employers, regardless of size[5][6]. This also affects exempt employee salaries, which must now meet a minimum of $68,640 annually to maintain exempt status[5].
Expanded Protections for Freelancers
The Freelance Worker Protection Act (SB 988) imposes new requirements on contracts with freelance workers who provide professional services, including minimum contract terms and protections against retaliation[3].
Data Privacy Enhancements
Stricter data protection measures are being implemented, requiring businesses to obtain explicit consent before collecting consumer data, provide clear privacy policies, and allow consumers to opt out of data sharing[2].
Renewable Energy Mandates
New mandates require businesses to meet specific renewable energy targets. While incentives and subsidies are available, failure to comply can result in penalties[2].
Emissions Reporting
Starting in 2026, large businesses with revenues over $1 billion must report their greenhouse gas emissions, including scopes 1, 2, and 3, for 2025 data[4].
Paid Family Leave Changes
AB 2123 eliminates the ability of employers to require employees to use up to two weeks of accrued vacation time before receiving Paid Family Leave benefits[5].
Whistleblower Protections
AB 2299 requires employers to prominently display employee rights regarding whistleblowing in the workplace[8].
These new laws will require small businesses to update their policies, procedures, and, potentially, their operations to ensure compliance and avoid penalties.
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Citations:
[1] https://newsroom.courts.ca.gov/news/new-california-laws-going-effect-2025
[2] https://www.ktblegal.com/blog/2024/december/new-california-laws-to-pay-attention-to-in-2025/
[3] https://www.gtlaw.com/en/insights/2024/12/tis-the-season-for-californias-2025-legislative-update-employer-considerations
[4] https://www.persefoni.com/blog/california-sb253-sb261
[5] https://www.callaborlaw.com/entry/california-employers-are-you-ready-for-the-new-laws-of-2025
[6] https://www.employers.org/blog/2024/11/14/default/new-laws-businesses-should-prepare-for-ahead-of-january-1-2025/
[7] https://www.faegredrinker.com/en/insights/publications/2024/10/new-california-laws-for-2025-and-beyond-what-employers-should-know
[8] https://www.sangabrielvalleylaw.com/new-california-employment-laws-for-2025-6-critical-updates-that-could-cost-you-big-%EF%BF%BC/
[9] https://www.capradio.org/articles/2025/01/01/new-california-laws-that-might-affect-your-2025/