Key Changes for Oregon, Washington, and California Employers in 2025

As 2024 wraps up and we look forward to 2025, below is a summary of upcoming changes in employment law that may impact employers in Oregon, Washington, and California. Many of the following updates go into effect on January 1, and we suggest employers review their policies to ensure they are up to date rolling into the new year.

OREGON

Clarification to State Paid Leave Laws. While July 2024 brought many changes to the Oregon Family Leave Act (“OFLA”) and Paid Leave Oregon framework, one more is coming: Effective January 1, 2025, eligible employees can receive Paid Leave Oregon benefits to attend legal proceedings required for the placement of a foster child or the adoption of a child. This change also means that OFLA will no longer provide an additional two weeks of protected leave for those reasons. This change does not expand the amount of Paid Leave Oregon benefits available during a benefit year.

Protections for Warehouse Workers. House Bill 4127 provides new protections to Oregon employees of covered warehouse distribution centers (which are defined as single warehouse distribution centers with (1) 100 or more employees or (2) one or more warehouse distribution centers in Oregon with a total of 1,000 or more employees companywide). Employers will need to provide employees with written documentation summarizing any quota that applies to the employee, including the number of tasks to be performed or materials to be produced or handled, as well as a description of potential consequences the employee might face if they do not meet the applicable quota. This documentation must be provided to employees at the time of hire, within two business days following an employer’s change to a quota to which the employee is subject, and to an employee when an employer takes an adverse action against the employee for failure to meet the quota. Employers who fail to comply with the new rules will be precluded from taking adverse employment actions against employees for failing to meet their quota. (Notably, however, there is a carveout for employees who work under a collective bargaining agreement with defined performance evaluation metrics.)

Overtime for Agricultural Workers. Starting January 1, 2025, Oregon employers will be required to pay agricultural workers overtime after they work more than 48 hours in a workweek. This change is the first step in a multi-year plan to lower the hours-worked threshold for agricultural workers to receive overtime. By January 1, 2027, employers will be required to pay overtime to those employees any time they work over 40 hours in a workweek.  

Additional 2025 Updates:

• Senate Bill 1595 increases the amount of employee wages that are exempt from garnishment.
• Minimum wage is expected to increase on July 1, 2025, following the same three-tiered system that has been in place since 2016.

WASHINGTON

Increased Minimum Wage. On January 1, Washington’s minimum wage will go up 2.35% from 2024, to $16.66 per hour, and several cities and counties have implemented additional higher minimums based on varying standards. For example, Seattle’s minimum wage in 2025 will rise to $20.76, and small employers will no longer be able to count medical benefits or tips toward that amount. Several other cities, including Bellingham, Tukwila, Renton, and Burien, are using graded scales based on employer size, with employees at large companies (typically 500 or more employees) making at least a dollar an hour more than employees at mid- or small-sized companies. The increased minimum wage also means that the minimum salary for white collar exemptions under the Washington Minimum Wage Act is increasing substantially as of January 1: to at least $1,332.80/week for small employers and at least $1,499.40/week for larger employers with 51 or more employees.

Paid Sick Leave Expands. The state’s Paid Sick Leave Law will be expanded to apply to employees of transportation network companies (“TNC”), which includes drivers for ride-share apps such as Uber and Lyft, as of January 1. The TNC must provide to each worker operating on its driver platform one hour of paid sick leave for every 40 hours worked, with the same eligibility requirements as employees in other industries. Compensation for sick leave will be based on average hourly earnings. Drivers can also carry over up to 40 hours of unused sick leave and must have an accessible system to request it, and they will be protected from retaliation for using sick leave. This is a major change for ride-share drivers who have traditionally been classified as independent contractors, making them ineligible for many employment benefits.

In addition to its expansion to TNC employees, the Paid Sick Leave Law will include a new reason for leave as of January 1. Employees will be able to use their paid sick leave after the declaration of an emergency by the local, state, or federal government. Furthermore, the definition of a “family member” under the Paid Sick Leave Law (for purposes of taking leave to care for a family member) will be substantially expanded to include individuals who may not even be related to the employee. Household members and individuals with a relationship with the employee that creates an expectation of care will be included in that definition beginning in 2025.

Prohibition on Mandatory Overtime for Health Care Workers. Another major change for the new year impacts Washington health care employers. A new Department of Labor and Industries (“L&I”) law will prohibit hospitals from mandating overtime for health care workers directly involved in patient care, which encompasses nurses, surgical technicians, and other clinical staff. The law applies to workers who are paid hourly or covered by a collective bargaining agreement, but contract and travel staff are not included. Most hospitals must comply effective January 1, but smaller hospitals and critical access facilities have until July 1 to implement the policy change.

The law allows for four exceptions where overtime may still be required: (1) in emergency situations; (2) during pre-scheduled on-call time; (3) when staffing shortages occur “despite reasonable efforts”; and (4) when overtime is required to complete a patient care procedure. Hospitals will be required to document their efforts to avoid overtime and may be subject to civil penalties for noncompliance. Employees can file complaints with L&I, which will investigate alleged violations, and penalties could reach up to $5,000 per infraction.

New Penalties for Meal Period Violations. In Androckitis v. Virginia Mason Medical Center, the Washington Court of Appeals recently held that the remedy for nonexempt employees who do not receive required meal periods includes three components: (1) payment of time worked during the meal period; plus (2) 30 minutes of pay as a penalty; plus (3) double damages on unpaid amounts as a willfulness enhancement. No. 85502-6-I, 2024 WL 4352175 (Wash. Ct. App. Sept. 30, 2024). This ruling is a major shift for employers. The employer in Androckitis petitioned the Washington Supreme Court for discretionary review, so more guidance is pending, but for now, employers with hourly employees should review their meal period policies.

CALIFORNIA

Increased Minimum Wage. Although California voters rejected a November ballot proposal to raise the state minimum wage to $18 an hour, the minimum wage will rise slightly based on the consumer price index, up to $16.50 an hour. This increase moves the minimum salary test for the primary overtime exemptions to $68,640 annually or $5,720 monthly, so employers should ensure all employees are reclassified correctly.

This statewide minimum wage bump does not tell the whole story, however: various industries and municipalities are subject to different minimum wage standards. For example, California law still has carveouts for certain exemptions to overtime laws, sick leave provisions, and other wage and hour laws only available to employers with union-represented workforces. Certain fast-food workers must be paid $20 an hour, and the minimum wage for health care workers will increase to $24 per hour on July 1, 2025.

Updates to Paid Sick Leave. Two pieces of legislation, AB 2499 and SB 1105, expand permissible reasons for which employees can use paid sick leave starting in 2025. Agricultural workers can use paid sick time to avoid smoke, heat, or flooding created by a local or state emergency, including when the employee’s worksite is closed due to the hazardous conditions. Additionally, employees who are victims of a crime or whose family member is a victim of a crime may use their sick time to seek judicial relief to ensure their own or their child’s health, safety, or welfare. Additional reasons for using paid sick leave now apply to employers with 25 or more employees; the full list can be found on the California Paid Sick Leave FAQ page. 

Protections for Freelance Workers. There are new minimum employment requirements for freelance workers in California effective January 1 under the Freelance Worker Protection Act. A “freelance worker” is defined as a person who is hired as a bona fide independent contractor to provide professional services in exchange for an amount equal to or greater than $250. Multiple categories of freelance-type work such as marketing, human resources, graphic design, esthetician, and others are included. The law also requires freelance worker contracts to be in writing and kept on file for four years, provides that freelance workers must be paid on or before the date compensation is due according to the contract, and prohibits waiver of any requirements under the law.

Amendments to PAGA. The California Private Attorney General Act (“PAGA”), which deputizes private parties to enforce the Labor Code on behalf of the state, will undergo significant reforms. The amendments include a new procedure for employers to address and cure alleged Labor Code violations after being served with a PAGA complaint, and penalties are or can be reduced for various violations. Finally, most PAGA plaintiffs will face stricter “standing” requirements, and cannot proceed with a PAGA complaint unless they have personally experienced the alleged Labor Code violations within a one-year period before initiating the lawsuit. 

Additional 2025 Updates:

• Effective January 1, 2025, California employers can no longer require employees to use up to two weeks of accrued vacation time before they start receiving paid family leave benefits under the Employment Development Department’s paid family leave program.
• Two bills provide further guidance on anti-discrimination law in California: SB 1137 clarifies that the Fair Employment and Housing Act (FEHA) bans discrimination on the basis of the intersectionality of two or more protected traits; and AB 1815 amends the definition of the word “race” in the Government and Education Codes to be inclusive of “traits associated with race, including, but not limited to, hair texture and protective hairstyles.”
• AB 2499 amends the FEHA provisions for time off related to jury duty and court appearances, including requiring employers to provide notice of these rights “upon hire, to all employees annually, at any time upon request, and any time an employee informs an employer that the employee or the employee’s family member is a victim.” This notice must clarify that employees may use vacation or paid sick leave when taking this time off.
• Under SB 1100, employers may no longer include on job applications a statement that requires applicants to have a driver’s license, unless the employer reasonably (1) expects driving to be one of the position’s job functions and (2) believes that using an alternative form of transportation would not be comparable.