With the return of Donald Trump to the presidency, federal policies impacting workplaces could see significant shifts. For California employers, navigating these changes while adhering to California’s robust labor laws will require vigilance and strategic planning. From immigration enforcement to the future of DEI initiatives, here’s what California employers need to know about key issues in 2025.
Immigration Enforcement: New Challenges for California Employers
Under the Trump administration, immigration is expected to become a top priority, with stricter enforcement measures including increased workplace audits, I-9 compliance reviews, and large-scale worksite raids. California employers in industries such as agriculture, construction, and hospitality—sectors that heavily rely on immigrant labor—may face heightened scrutiny.
Impact on California Employers:
Federal enforcement may clash with California’s worker protection laws, putting employers in a precarious position. Businesses must ensure all documentation is in order to avoid penalties and disruptions.
What California Employers Can Do:
- Conduct internal audits of I-9 forms for accuracy and compliance.
- Avoid discrimination by adhering to federal guidelines on verifying work authorization.
- Partner with legal counsel to prepare for potential audits or raids.
Need help ensuring your compliance with California labor laws? Contact us for expert guidance.
EEOC Pay Data Reporting: Federal Rollbacks vs. California’s Stringent Laws
Federal requirements for EEOC pay data reporting could be deprioritized under Trump. However, California employers must still comply with the state’s rigorous pay data laws, which require detailed reports on pay equity by gender, race, and ethnicity.
Impact on California Employers:
While federal changes might reduce reporting obligations outside California, the state’s stricter laws remain binding. Failing to comply could lead to penalties and reputational harm.
What California Employers Can Do:
- Audit current pay data to ensure compliance with California’s pay equity requirements.
- Use data insights to identify and address potential pay disparities proactively.
DEI Initiatives Under Scrutiny
The Trump administration’s critical stance on DEI initiatives could lead to federal limitations on diversity programs. However, California employers must balance these potential federal shifts with state-level expectations, as California prioritizes diversity in hiring and workplace policies.
Impact on California Employers:
Federal resistance to DEI programs may create complexities for California employers working to align with state mandates. DEI initiatives that promote equity in hiring and pay could face challenges if federal agencies scrutinize their legality.
What California Employers Can Do:
- Document the business and legal justifications for all DEI programs.
- Ensure compliance with California’s state laws while staying informed about federal shifts.
Minimum Salary Requirement: Limited Federal Impact for California Employers
While Trump’s administration may attempt to scale back the federal minimum salary requirement under the Fair Labor Standards Act (FLSA), California employers are already held to a higher standard. California’s exempt salary threshold will increase to $68,640 annually in 2025, surpassing federal levels.
Impact on California Employers:
The federal minimum salary requirement changes will have little direct impact on California employers due to the state’s higher thresholds. However, multi-state employers must adapt to varying standards across jurisdictions.
What California Employers Can Do:
- Review employee classifications to ensure compliance with California’s higher exempt salary requirements.
- Prepare for potential federal changes in non-California locations.
No Tax on Tips: Limited Benefits for California Employers
The Trump administration has voiced support for eliminating federal income taxes on tips, a move that could ease burdens for employers in the hospitality industry. However, California employers may see limited benefits due to the state’s prohibition on tip credits.
Impact on California Employers:
While federal changes might reduce tax burdens elsewhere, California employers in tipped industries will still need to follow state-specific wage laws.
What California Employers Can Do:
- Review tip pooling policies to maximize compliance with California laws.
- Monitor federal developments for opportunities to reduce administrative burdens.
Navigating Policy Changes in 2025
California employers will need to stay informed as federal policies shift under the Trump administration. While California’s strict labor laws often exceed federal requirements, potential changes in immigration enforcement, EEOC pay data reporting, DEI policies, and salary thresholds could still bring significant challenges.
Navigating these complexities requires proactive planning and expert legal support. If you have questions about your workplace compliance or need assistance with employment law matters, contact us today. Let us help you protect your business while safeguarding employee rights.
SOURCES:
- Fisher Phillips. “Top 10 Workplace Law Developments To Expect Under President Trump.” Fisher Phillips Insights, November 6, 2024.
- Eaton, Dan. “What Trump’s Election Means to California Employers.” San Diego Union-Tribune, November 18, 2024.
- Ogletree Deakins. “Employment Law Landscape Could Change After Election.” Ogletree Deakins Insights Blog, September 11, 2024.
- Perkins Coie. “Employers and Immigration Under Trump: What You Need to Know.” Perkins Coie Blog, November 2024.
- FOX 5/KUSI. “New Labor Laws Making Changes for California’s Workers in 2025.” Fox 5 News, November 21, 2024.
- Bankrate. “How Trump and Harris’ Policies Could Impact the Cost of Insurance.” Bankrate Insights, October 24, 2024.