With immigration enforcement becoming a pressing issue in workplaces across the United States, it is critical for employers to understand their rights and obligations when confronted with an ICE (Immigration and Customs Enforcement) raid or audit. In recent years, ICE has ramped up its enforcement actions, including unannounced raids and formal I-9 audits, targeting employers in various industries. Failing to handle these situations properly can lead to significant legal and financial consequences.

Below, we outline key steps employers should take to prepare for and respond to an ICE raid or audit, ensuring compliance while protecting their rights.

1. What to Do During an ICE Raid

    ICE raids can occur without prior notice, with officers arriving at your premises to conduct searches, seize documents, and question employees. Employers must act swiftly and strategically to protect their business. Here’s how:

    a) Prepare in Advance:

    • Designate a company representative to handle ICE interactions and train frontline employees on how to respond.
    • Train employees to contact management immediately if anyone from the government arrives at the workplace and is asking questions.  They should be trained that they are not authorized to share any information with any third parties, and they should be instructed to inform the officers that they have to speak with company management.  The employees need to be trained that they are not to consent to any access to private areas of the company. 

      b) Actions to Take During a Raid:

      • Contact Counsel Immediately: Notify your legal counsel as soon as ICE officers arrive. Request that the officers wait for counsel before proceeding, if possible.
      • Verify the Warrant: Ask for a copy of the warrant and check that it is signed by a judge, specifies the premises to be searched, and lists the items to be seized. Do not consent to the search but allow it to proceed while noting any objections.
      • Document the Raid: Record the officers’ actions, take notes, and log items taken. Request a copy of the warrant and an inventory of seized items.
      • Follow Legal Boundaries: Do not provide false information, hide documents, or obstruct the officers. Avoid providing employee-specific information unless required by the warrant.

      c) Post-Raid Documentation:

      • After the raid, document all details, including the officers’ names, actions taken, and items seized. This information will be critical for legal review and potential challenges.

      2. Responding to an ICE I-9 Audit

      Department of Homeland Security’s ICE generally conducts most audits, or “Notices of Inspection” (NOI), typically require employers to produce I-9 forms and related documentation within three business days. However, these audits can also be conduced by other agencies, such as the Department of Justice or the Department of Labor.  Here are a few items on how to respond effectively:

      a) Immediate Actions:

      • Contact legal counsel upon receipt of an NOI.

        b) Preparing the Documents:

        • Gather requested I-9 forms for current employees and terminated employees within the retention period (three years from the hire date or one year from termination, whichever is later).
        • Include any supporting documents (List A/B/C) if applicable, payroll records, and E-Verify documentation.
        • Ensure I-9 forms are stored separately from personnel files to streamline retrieval.

        c) Review and Organization:

        • Use the three-day period to review I-9 forms for errors or omissions. Make any allowable corrections before submission.

        d) Submitting to ICE:

        • Provide requested documents by the deadline and request a receipt for all items submitted. If additional time is needed, legal counsel can attempt to negotiate an extension with ICE.

        3. After the Audit: Possible Outcomes

        Once ICE completes its review, employers may receive one of several notifications:

        • Compliance Letter: Indicates no violations were found.
        • Notice of Technical or Procedural Failures: Identifies minor errors; employers may be allowed to correct them.
        • Notice of Suspect Documents: Lists employees whose work authorization is in question. Employers have 10 days to address the issues or terminate the employees.
        • Notice of Intent to Fine (NIF): Cites substantive violations or unauthorized employment, which may result in civil or criminal penalties.

        Employers have the right to challenge alleged violations through a hearing before an Administrative Law Judge.

        4. Proactive Steps to Mitigate Risk

        Taking proactive measures is key to minimizing the risk of ICE enforcement actions and demonstrating good faith compliance. Here’s how employers can prepare:

        a) Conduct Internal I-9 Audits:

        • Regularly audit I-9 forms under the protection of attorney-client privilege to identify and correct errors before an ICE audit occurs.

        b) Provide Employee Training:

        Train HR and management staff on proper I-9 procedures to ensure compliance and mitigate penalties in case of an audit.

        c) Maintain Proper Documentation:

        • Organize I-9 forms and supporting documents in a way that allows for quick and efficient retrieval during an audit.
        • Lawfully audit and clean out I-9 forms for terminated employees once they are past the retention period.

        d) Develop a Raid Response Plan:

        • Designate a company representative to handle ICE interactions and provide employees with clear instructions on what to do during a raid.

        5. Understand California State Law Notice To Employee Obligations

        Pursuant to Labor Code section 90.2(a), California employers are required to provide notice to employees of any inspection of I-9 Employment Eligibility Verification forms or other employment records by an immigration agency by posting a notice within 72 hours of receiving the notification of inspection. Employers should familiarize themselves with this requirement and the Frequently Asked Questions on AB 450.  The Notice To Employee required under Labor Code section 90.2 are available in English and Spanish

        Immigration raids and audits can be disruptive and stressful, but with the right preparation and legal guidance, employers can navigate these challenges effectively. By understanding your rights and responsibilities, maintaining proper documentation, and conducting regular internal audits, you can reduce your risk of penalties and ensure compliance with immigration laws.

        California employers in the hospitality industry must navigate complex tipping laws to ensure compliance and avoid costly mistakes. In this video, I break down five key issues every employer should understand when it comes to tips, including who legally owns a tip, the rules around employer-mandated tip pooling policies, and whether tips impact overtime calculations and that California does not have a minimum wage tax credit. I also discuss the differences between mandatory service fees and tips and the potential impact of the “No Tax on Tips” movement on California businesses. Watch the full discussion to stay informed and protect your business from common pitfalls:

        California employers often ask what steps they can take to prevent employment litigation. While it’s impossible to completely avoid frivolous lawsuits, employers can focus on what they can control. By regularly reviewing a few key areas, employers can significantly reduce their liability. Here are five steps to get started (hint: the most important step is listed last):

        1. Take Reasonable Steps to Comply with the Labor Code to Reduce PAGA Audits

          With the new Private Attorneys General Act (PAGA) reform law, California employers can receive immediate relief. The reformed PAGA framework caps penalties for employers who take reasonable steps to comply with the Labor Code, potentially reducing penalties by as much as 85%. To establish compliance, employers should conduct periodic wage and hour audits to ensure adherence to meal and rest break obligations, establish compliant policies and handbook policies, train supervisors on Labor Code compliance, and take appropriate corrective action with supervisors to violate company policy.  Also, quarterly audits by experienced employment law counsel can demonstrate good faith compliance with the Labor Code.

          Also, next Thursday, January 30, 2025, my firm is offering a webinar: Navigating the Revised PAGA Law-Steps Employers Must Take to Reduce Penalties.  We will be offering certificates to all who attend the entire presentation, and this is a start to establish that your organization is taking reasonable steps to understand and comply with California employment laws. Register here.

          2. Document Reasons For Terminations Accurately

          When terminating an employee, consider providing them with a termination letter that clearly documents the reason for the termination. While this is not legally required, it is a good practice. It is crucial to document performance issues accurately and not to sugarcoat the reasons for termination. If the termination is for cause, clearly state this in the documentation. Avoid taking the easy route by labeling the termination as a layoff if it is not. The company does not want to be in a position where it initially provides a reason as a layoff, but then, when litigation is initiated, attempts to explain that the true reason was performance. This can appear as if the company is changing the reason for the termination, which can negatively impact the company’s credibility in litigation. What the employer states as the reasons for the termination, both in the documents and at the termination meeting, will be key. Therefore, do not downplay the reasons and ensure that the stated reasons are complete and accurate.

          Examples of “for cause” reasons for termination could include:

          • Consistent poor performance or failure to meet job expectations
          • Violation of company policies or procedures
          • Insubordination or refusal to follow reasonable instructions
          • Theft or dishonesty
          • Harassment or discrimination
          • Excessive absenteeism or tardiness
          • Misuse of company property or resources

          By clearly documenting these reasons, employers can provide a solid foundation for their decision and reduce the risk of litigation.

          3. Consult with an Employment Attorney Regularly

          Having an employment attorney well-versed in California employment law is essential. California’s employment laws are complex, and an experienced attorney can save the company in legal fees and potential exposure. Just as you wouldn’t go to a general practitioner for an eye problem, you need specialized advice for California employment issues. Regular consultations with an employment lawyer also allow you to assess their compatibility with your operations, which is better discovered early on rather than during a class action lawsuit.

          4. Hire a Knowledgeable HR Professional

          An experienced HR professional allows executives to focus on their core roles and provides employees with a clear point of contact for HR information or complaints. A human resource professional experienced in handling workplace investigations and employee complaints is invaluable. No matter how well you run your company, there will be complaints. Having a proactive, knowledgeable professional to investigate and resolve issues is crucial to a successful company.

          5. Ensure the Owner/CEO is Present, Involved, and Open to Hearing Complaints

          The most important step towards reducing employment litigation comes from the top. The amount of litigation is inversely proportional to how involved the owner or CEO is with the employees. Large employers in California with a clean litigation record often have owners who are present daily, know employees by name, and are available to hear and resolve complaints. If employees have a process to make complaints and feel the company treats them seriously, most issues can be resolved internally. When employees feel unheard or unfairly treated, they may turn to litigation to resolve disputes.

          The financial strain caused by federal taxes on tips and overtime pay is significant for hardworking Americans.  Recognizing the need for change, bipartisan support has emerged to eliminate these taxes, with backing from Donald Trump, Kamala Harris, and President Joe Biden. This article explores what the “No Tax on Tips and Overtime” policy could mean for employees and employers in the hospitality industry, and how you can join Zaller Law and TipHaus in advocating for federal legislation to be enacted early in Trump’s administration.

          1. Bipartisan Support for No Tax on Tips

          The “No Tax on Tips” policy has garnered bipartisan support, with both Donald Trump and Kamala Harris advocating for it during their presidential campaigns. Trump emphasized the need to reduce tax burdens on tipped workers, aligning with his broader platform of tax reduction. Similarly, Harris, while running for president, expressed her support for eliminating taxes on tips, aiming to win over service workers, a significant and influential constituency. Additionally, President Joe Biden has also shown support for this idea. White House spokesperson Karine Jean-Pierre confirmed in August 2024 that Biden would sign legislation eliminating taxes on tips for service and hospitality workers if passed by Congress. This bipartisan backing underscores the widespread recognition of the financial challenges faced by tipped workers and the need for this legislation to support them.

          2. “No Tax On Tips Act of 2025” Announced by Senators Ted Cruz and Rick Scott

          On January 16, 2025, the “No Tax on Tips Act” was introduced by Senators Cruz and Scott.  Under the bill, “cash tips”—comprising cash, credit and debit card charges, and checks—are exempt from federal income tax, allowing taxpayers to claim a full 100% deduction for tipped wages at filing. The revised text incorporates measures to ensure that only employees who traditionally receive tips will benefit from this exemption. However, this bill only addresses tips, and does not mention not eliminating taxes on overtime.

          3. Support for Workers

          Eliminating taxes on tips and overtime would provide immediate financial relief to workers, fostering greater satisfaction and retention. This also supports the growth of the hospitality industry, which has faced significant challenges in recent years.

          4. Support for the Hospitality Industry

          Eliminating taxes on tips and overtime would permit restaurants to attract and retain skilled workers by offering competitive earning potential.  In addition, eliminating taxes on tips would enhance employee satisfaction and retention, reducing turnover costs for operators.

          5. Take Action: Support the No Tax on Tips and Overtime Petition

          This issue was a campaign promise by both Trump and Harris and has bipartisan support – it just needs to be implemented now.  Zaller Law Group has joined efforts with TipHaus to ensure this legislation remains a priority for U.S. Congress and is addressed early in Trumps administration. 

          Please join us in continuing to urge U.S. Congress to eliminate federal taxes on tips and overtime pay. Let’s strengthen the financial security of millions of workers, support the growth and recovery of the hospitality industry, and foster economic growth nationwide:

          Sign the petition here.

          Dear Readers:

          Today, I am pausing my usual “Friday’s Five” post to address a pressing issue that has deeply affected our community: the devastating fires in Los Angeles. Over the last couple of days, I could see the flames of the fires looking up towards Pacific Palisades from my office (picture above is from my office overlooking LAX north towards Pacific Palisades), and the impact has been profound. I feel compelled to share how we can come together to support those in need.

          Over the past couple of days, we have been actively coordinating food and clothing donations to help those affected by the fires. This effort has been made possible with the incredible support of restaurants and vendors such as Gavina Coffee, Lazy Dog Cafe, The Red Chickz. Shamrock Foods, Sunrise Produce, Marmalade Cafe, Maria’s Italian Kitchen, Wurstkuche, and many others. Their generosity has been overwhelming. In addition, many others have been asking how they can contribute.

          The hospitality industry, in particular, has been hit hard. Many restaurants and businesses have burned down, leaving countless individuals without a means to make a living. In light of this, I want to draw attention to Restaurants Care, a non-profit organization I serve on the board of, which is dedicated to providing immediate assistance to these workers through a special relief fund.

          Every dollar we contribute can make a significant difference:

          • A line cook can keep food on their table.
          • A server can make rent while they’re out of work.
          • A dishwasher can rebuild after unimaginable loss.

          This cause is incredibly close to my heart, and I believe that together, we can make a substantial impact. Whether it’s $10 or $100, every donation will go directly to helping those in need. Let’s come together and make a difference. Click here to donate.

          Thank you for joining me in supporting the people who care for all of us through their work.

          Warm regards,

          Anthony Zaller

          The beginning of 2025 presents an ideal opportunity for companies to perform a California employment law audit. This proactive step ensures your policies align with current regulations, your managers receive proper training, your company retains required records for the appropriate duration, and will greatly reduce potential PAGA penalties under the 2024 PAGA reform. To help guide your audit, we’ve outlined five key areas to review, along with suggested questions for each topic. If you need assistance, don’t hesitate to reach out—our team regularly conducts audits for clients as a preventive measure.

          1. Hiring Practices

           2. Records

          • Are employee files maintained confidentially and for at least four years?
          • Are employee time records maintained for at least four years?
          • Are employee schedules maintained for at least four years?
          • Do the managers have set forms for the following:
            • Employee discipline and write-ups
            • Documenting employee tardiness
          • How is the employee documentation provided to Human Resources or the appropriate manager?
          • Who is involved in reviewing disability accommodation requests?
          • How are employee absences documented?

          3. Ensuring PAGA Compliance Through Reasonable Efforts and Addressing Wage and Hour Practices

          • PAGA audit to show reasonable efforts to comply with the Labor Code at cap penalties:
          • Conduct periodic payroll audits
          • Establish compliant policies and handbook policies
          • Train supervisors on Labor Code compliance
          • Take appropriate corrective action with supervisors who violate company policy
          • Read more about the reasonable steps employers should be taking to cap PAGA penalties in our prior article here: https://www.californiaemploymentlawreport.com/2024/07/key-action-items-for-california-employers-under-the-new-paga-reform-law/
          • Does the company have its workweeks and paydays established?
          • Are paydays within the applicable time limits after the pay period as required under the law?
          • Are employees provided with compliant itemized wage statements?
          • Are employees provided with a writing setting out their accrued paid sick leave each pay period? Has the amount of accrued paid sick leave reported to employees been updated to comply with California’s increased requirements in 2024?
          • Are employees properly classified as exempt or nonexempt?
          • Are any workers classified as independent contractors, and if so, could they be considered employees under AB 5?
          • Are nonexempt employees properly compensated for all overtime worked?
          • Is off-the-clock work prohibited?
            • Policy in place?
            • Are managers trained how to recognize off-the-clock work and what disciplinary actions to take if finding employees working off-the-clock?
          • Does the company’s time keeping system round employee’s time?
            • If so, is the rounding policy compliant with the law? Employers should note that meal breaks cannot be rounded pursuant to Donohue v. AMN Services, and whether California employers may use time rounding at all is currently being reviewed by the California Supreme Court. Employers are cautioned about using time rounding given these cases.
          • Are meal and rest period policies set out in handbook and employees routinely reminded of policies?
            • (See additional PAGA audit items above)
            • Does the company pay “premium pay” for missed meal and rest breaks? If so, how is this documented on the employee pay stub? Does the company have a clear definition of what is considered a missed break and document why the employee missed the break?
            • Do employees record meal breaks?
            • Are managers trained on how to administer breaks and what actions to take if employees miss meal or rest breaks?
            • Are employees provided attestations to document the reason if the employee missed, took a short, or a late meal break? (See Donohue v. AMN Services)
          • If employer provides vacation, is the policy properly documented, tracked, and is unused vacation paid out with the employee’s final paycheck?
          • Are all deductions from the employee’s paycheck legally permitted?
          • Are employees reimbursed for all business expenses, such as uniforms, work equipment, mileage for work, and for expenses incurred for working from home (such as internet, cell phones, etc.)?

           4. End of Employment Issues

          • Are employees leaving the company provided their final wages, including payment for all accrued and unused vacation time?
          • Are final paychecks provided to employees within the required deadlines?
          • Does the employer deduct any items from an employee’s final paycheck?
            • If so, are the deductions legally permitted? (Use caution, very few deductions are permitted under California law.)

          5. Anti-harassment, discrimination and retaliation

          • Are supervisors provided with sexual harassment training every two years? (If employer has 5 or more employees, supervisors are legally required to have a two-hour harassment prevention training that complies with California law.)
          • Are there steps in place to provide nonsupervisory employees with 1-hour sexual harassment prevention training and once every 2 years thereafter? (Required for employers with 5 or more employees.)
          • Are supervisors and managers discussing the company’s open-door policy to employees at routine meetings with employees? Is this being documented?

          2024 brought a host of challenges for California employers, with significant legal changes and new compliance requirements reshaping the workplace. Employers faced hurdles such as adapting to updated employment laws, implementing workplace violence prevention plans by July 1, 2024, and managing the $20 per hour minimum wage for fast food workers effective April 1, 2024. While the PAGA reform enacted in June 2024 provided much-needed relief from the deluge of PAGA litigation, proactive measures are still required for employers to fully benefit from these changes.

          This week’s Friday’s Five showcases the dedicated efforts of our team at Zaller Law Group (ZLG) throughout 2024 to equip California employers with the knowledge and resources they need to navigate these complexities successfully.

          1. 58 Blog Posts

          The California Employment Law Report continued to be a cornerstone resource for providing timely updates on California employment law. Our blog consistently addresses critical legal developments, ensuring employers have the insights they need to navigate this complex landscape. If you haven’t yet subscribed, stay ahead of legal updates by subscribing here: California Employment Law Report Subscription.

          2. Over 15 Webinars Conducted

          In 2024, we hosted a variety of webinars, both independently and in collaboration with partner organizations. These sessions provided invaluable education on California’s ever-evolving employment law landscape. Looking ahead to 2025, we’re preparing an expanded lineup of webinars and in-person seminars to support California employers. If you’d like to receive updates on upcoming events, feel free to reach out via email.

          3. 63 YouTube Videos

          Our video content on YouTube saw over 130,000 views this year, with our subscriber count climbing to more than 2,883. In 2025, we’re excited to announce a major rebranding of our channel to The Legal Lineup. This evolution reflects our broader focus on both employment law and business legal topics, offering actionable insights for California employers and business leaders. Subscribe now to stay informed: The Legal Lineup YouTube Channel.

          4. Most Viewed LinkedIn Post

          Our most engaging LinkedIn post in 2024 addressed a critical issue:
          “Employees who quit without 72 hours’ notice must receive all wages, including accrued vacation, within 72 hours of leaving.”

          Under California law, delays in final wage payments can result in steep “waiting time penalties” under Labor Code section 203. Employers must act swiftly to avoid these costly penalties. Connect with me on LinkedIn for more timely updates: Anthony Zaller on LinkedIn.

          5. Over 10 Employees at Zaller Law Group

          The achievements listed above reflect the dedication of our talented attorneys and staff at Zaller Law Group. Balancing these accomplishments alongside our litigation work, we remain committed to defending and advising employers throughout California.

          As we step into 2025, we remain steadfast in our mission to empower California employers with the tools and knowledge needed to thrive in an increasingly complex legal environment. Wishing you all a successful and prosperous New Year!

          This Friday’s Five is a break from the normal legal update – I’m asking you a few questions.  I started this post in 2022, and wanted to continue with the questions. Hopefully the questions will help you reflect on 2024, what you are most grateful for, and what you are looking forward to in 2025.  I cannot claim credit for many of these questions, as many of them have been asked during various meetings I attended leading up to the holidays.

          What is the thing you are most grateful for in 2024?

          I’m grateful to work with the team of lawyers and support staff at Zaller Law Group. I’m proud to be able to work with these lawyers, and am humbled that these skilled and some of the best employment attorneys in California. The support staff at the Firm is also amazing, and they are the ones that enable this small group of attorneys to perform at such a high level. I’m also grateful to be a partner in the Prosper Forum, and to be able to work with this great team. 2024 marked the second Prosper Forum, and we are excited to launch another conference in 2025 – the Prosper Accelerate.

          What is your favorite thing to do over the holidays? 

          I enjoy going somewhere with snow with my family.  We spend some time skiing and have a lot of down time to hang out.  Usually we get snowed in, and it is nice to spend the time with family with no outside obligations.  However, again this year, there is not much snow, but it is nice being in an area without distractions so that I can spend time with my family without having everyone preoccupied with gifts and other obligations.

          If you were to have a famous singer visit your house for a concert during the holidays, who would you like? 

          This was a question asked during a board meeting – the responses were awesome.  For me, my favorite singer is still Walker Hayes.  I really enjoyed seeing him in concert, and think Walker would be a great musician to have over for a holiday party.  My favorite song of his?  Probably “Country Stuff.”

          What is your favorite food during the holidays?

          I’ve had some great tamales given to me from a restaurant client, and I look forward to them every year.  However, my best friend/roommate from college and his mom make a cookie plate with a variety of cookies, and these are by far my favorite (if I can fend off my family members from eating them before I can have a couple).

          What is the coldest place you’ve ever traveled to during the holidays?

          In 2022 while I was in Montana for the holidays, it reached -22 degrees Fahrenheit. This was the coldest weather I’ve ever been in.

          I hope these questions help you review what is important to you and reflect, even if it is only for a minute.  I hope you are staying warm and wishing you the best over the holidays and have a Merry Christmas.

          As 2024 comes to a close, California employers are reminded of their obligations under SB 476, which took effect on January 1, 2024. This law requires employers to shoulder the costs of obtaining food handler cards and compensate employees for their time spent on training and testing. Now, nearly a year into its implementation, it’s crucial for employers to ensure ongoing compliance with these requirements.

          Here are five key aspects of SB 476 that California employers should keep in mind:

          1. Employers Must Pay for Food Handler Card Costs and Training Time

          Under SB 476, employers must:

          • Cover the cost of the training course and examination required to obtain a food handler card.
          • Compensate employees for the time spent in training and testing.
          • Ensure employees are relieved of other work duties while participating in these activities.

          This obligation has been in effect for nearly a year, and employers should review their payroll and reimbursement processes to ensure compliance.

          2. Employment Cannot Be Conditioned on Possessing a Food Handler Card

          SB 476 prohibits employers from requiring job applicants or employees to already have a food handler card as a condition of employment. Employers must avoid:

          • Making possession of a food handler card a prerequisite in job postings.
          • Refusing to hire or retain employees solely because they have not yet obtained the card.

          Employers should ensure that hiring practices, job descriptions, and onboarding materials reflect this requirement. Train managers involved in hiring to avoid inadvertent violations.

          3. Timing Requirements for Food Handler Cards Are Unchanged

          While SB 476 introduced new employer obligations, it did not alter the timeline for employees to obtain and maintain food handler cards:

          • Employees must acquire a food handler card within 30 days of hire.
          • Cards remain valid for three years from issuance and transfer with the employee to new employers during this period.

          Employers should monitor compliance to ensure employees meet these deadlines, avoiding potential penalties.

          4. Training and Examination Standards Remain Consistent

          The law maintains existing standards for food handler training and testing, which include:

          • Specific course content as outlined in Section 113947.2.
          • A minimum of 40 questions on the exam, requiring a passing score of 70% or higher.
          • Training options via in-person or online courses with security measures to prevent fraud.

          Employers should verify that the courses they sponsor meet these requirements to ensure compliance.

          5. Recordkeeping Obligations Are Unchanged

          SB 476 did not modify employers’ documentation requirements. Employers must maintain records proving that each food handler employed has a valid card and provide these records to local enforcement officers upon request.

          Exemptions from Food Handler Card Requirements

          It’s also important to remember the exemptions to the food handler card requirement, which include employees at:

          • Public and private school cafeterias.
          • Certified farmer’s markets and grocery stores.
          • Healthcare facilities and elderly nutrition programs.
          • Facilities with collective bargaining agreements or in-house food safety training programs that meet specific criteria.

          Review the full list of exemptions to determine whether your employees are covered by this requirement.

          Steps Employers Should Take to Ensure Compliance

          With nearly a year of SB 476 in effect, employers should take the following steps to stay compliant:

          1. Audit reimbursement and payroll practices to confirm training costs and wages for training time are covered.
          2. Update hiring materials and train managers to avoid conditioning employment on food handler card possession.
          3. Monitor employee compliance with the timeline for obtaining and maintaining valid cards.
          4. Confirm that training providers meet regulatory standards.
          5. Maintain accurate records to provide to enforcement officers if requested.

          By reviewing policies and procedures now, employers can ensure they remain compliant and avoid potential penalties.

          As we approach 2025, California employers must gear up for a series of significant legal and financial adjustments. These changes range from minimum wage hikes to increased salary thresholds for exempt employees, and they impact various industries across the state. Staying ahead of these updates is crucial to ensure compliance and maintain smooth operations. Here are the top five increases California employers must prepare for in 2025.

          1. California’s Minimum Wage Increases

          Effective January 1, 2025, California’s minimum wage will increase to $16.50 per hour. While Proposition 32, which proposed raising the minimum wage to $18 per hour, was rejected by voters, employers must still comply with higher rates set by local ordinances. Cities like San Francisco and counties such as Los Angeles often have their own minimum wage requirements, and businesses must adhere to the highest applicable rate.

          For more context, read the Los Angeles Times’ analysis on Proposition 32.

          2. Increased Minimum Pay for Exempt Employees

          California law requires exempt employees to meet both a salary basis test and a duties test. With the state’s minimum wage increasing in 2025, the minimum salary threshold for exempt employees will also rise. Starting January 1, 2025, the annual minimum salary to qualify for the white-collar exemption (executive, administrative, and professional) will increase to $68,640 (or $5,720 per month), up from $66,560 in 2024.

          Employers must ensure compliance with these thresholds to avoid misclassification issues. For additional details on exempt employee classifications, see our previous article.

          3. Fast Food Worker Minimum Wage Updates

          Fast food workers in California saw a significant wage increase to $20 per hour starting April 1, 2024, under AB 1228. This law applies to national fast-food chains with more than 60 establishments nationwide. Beginning January 1, 2025, the Fast Food Council may further increase this rate based on economic indicators such as the U.S. Consumer Price Index.

          Employers covered by AB 1228 should stay alert for announcements regarding the 2025 rate and be prepared to implement any necessary changes by January 1.

          4. Adjusted Salary Thresholds for Computer Professionals

          Certain computer software employees are exempt from overtime requirements under Labor Code section 515.5, provided they meet specific salary thresholds. For 2025, the Department of Industrial Relations has adjusted these thresholds as follows:

          • Minimum hourly rate: $56.97 (up from $55.58 in 2024)
          • Minimum monthly salary: $9,888.13 (up from $9,646.96 in 2024)
          • Minimum annual salary: $118,657.43 (up from $115,763.35 in 2024)

          Employers in the tech sector must review compensation plans to ensure compliance with these updated rates.

          5. Updated IRS Mileage Rates

          The IRS annually adjusts its standard mileage rates, which impact how employers reimburse employees for business-related travel. For 2024, the rates were:

          • 67 cents per mile for business use
          • 21 cents per mile for medical or moving purposes (for qualified active-duty Armed Forces members)
          • 14 cents per mile for charitable purposes (unchanged)

          The IRS is expected to announce the 2025 mileage rates in mid-December 2024. Employers should monitor these updates to ensure accurate reimbursement practices. For further details on mileage reimbursement obligations, see our previous article.