By Eric D. Morton
Happy 2025! We have two topics this month. The Corporate Transparency Act is on hold, again. Some changes in California employment law.
BOI on hold again
As I reported earlier this year, the Corporate Transparency Act (CTA) took effect on January 1, 2024. Under the CTA, companies must provide key details about their beneficial owners by January 1, 2025, by filing a Beneficial Ownership Information (BOI) report.
However, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction temporarily blocking enforcement of the CTA and the associated BOI reporting rules. The court’s ruling paused the requirement that reporting companies submit beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) by the January 1, 2025 deadline. Subsequently, a three judge panel for the Fifth Circuit Court of Appeals reversed the injunction. However, a full panel of the Fifth Circuit reversed the reverse and reinstated the injunction until the full panel can review. For now, businesses do not need to file a BOI. The court should render a decision some in March. We’ll keep you informed.
Employment law update
New Minimum Wage and Salary Threshold
Starting on January 1, the statewide minimum wage will increase to $16.50 per hour, and the threshold for exemptsalaried employees will increase to $68,640 annually. Employers must stay current with these and any local andindustry wage requirements to ensure compliance.
Expanded Anti-Discrimination Laws (SB 1137 and 1815)
California has broadened its definition of “race” to explicitly include hair texture and protective hairstyles. While largely clarifying existing protections, this amendment reaffirms these rights and applies retroactively. Additionally ,the legislature has emphasized that discrimination based on the “intersectionality” (combination) of two or more protected traits is also prohibited. Employers should update discrimination policies and trainings to reflect the enhanced protections, which may simplify the burden of proof in discrimination cases for plaintiffs.
Expanded Paid Sick Leave Rights (AB 2499)
Under existing law, protections for “safe time” absences due to domestic violence, sexual assault, or stalking have been strengthened under the Fair Employment and Housing Act (“FEHA”). The new law includes additional rights for employees supporting family members who are crime victims. AB 2499 relocates anti-discrimination protections for employees involved in jury duty, court appearances, or are victims of a crime, under FEHA. This shift strengthens protections and adds leave eligibility for employees supporting family members who are crime victims.
Notable provisions:
Expanded Definitions:
“Qualifying acts of violence” now include domestic violence, sexual assault, stalking, and conduct involving threats or use of force.
Broadened Leave Rights for Family Members:
Employers with over 25 employees cannot discriminate orretaliate against workers taking leave to support family members who are crime victims.
Annual Notice Requirement:
Employers must notify employees of these rights upon hire and annually.
Restrictions on Driver’s License Requirements in Job Postings (SB 1100)
Starting on January 1, under SB 1100, employers may only require a driver’s license if it is essential to the job functionand alternative transportation is not feasible. This change requires employers to carefully assess job postings andpolicies involving driver’s licenses.
Workers’ Compensation Notice Requirements (AB 1870)
Starting on January 1, AB 1870 will require California employers to inform employees about their right to consult anattorney for advice on workers’ compensation rights, reinforcing transparency in the workers’ compensation process.
Ban on Mandatory Work Meetings Covering Religion and Politics (SB 399)
Starting on January 1, the “California Worker Freedom from Employer Intimidation Act” goes into effect, which bans mandatory attendance at meetings covering religious or political opinions, including union organizing, potentially subjecting employers to new litigation risks if violated. Note this law does not apply to mandatory training to comply with an employer’s legal obligations, including obligations under civil rights laws (such as discrimination and harassment prevention training) and occupational safety and health laws.
New Freelancer Protection (SB 988)
Starting on January 1, the “Freelance Worker Protection Act” mandates timely payment, written contracts, and a minimum $250 threshold for independent contractor protections, aligning with California’s efforts to support gig workers and contractors.
There are other changes in employment laws. If you have any concerns, please consult with an attorney or HR consultant.
Eric D. Morton is the principal attorney at Clear Sky Law Group, P.C. He can be reached at emorton@clearskylaw.com, 760-722-6582, and 510-556-0367.
