At Will Employment California 2025: All You Need to Know

Posted on February 12, 2022 | By Omid Nosrati | Employment Law

At-will employment in California is the standard employment arrangement, allowing employers to terminate employees at any time, with or without cause or notice, so long as the reason is not illegal. The policy provides organizational flexibility, yet creates persistent job security concerns among employees.

California maintains strict employee protection laws in 2025, which restrict employers’ ability to terminate employees at any time. Under at-will employment laws, it is crucial to know your legal rights, particularly when you face sudden job termination. Both employees who have faced recent termination and employers dealing with termination laws must stay informed to navigate their situations effectively.

Minimum Wage Changes Affecting Terminations

According to Oxfam America, an advocacy organization, 15.8% of California’s workforce, or over 3 million people, make the minimum wage or close to it. With California’s $16.50 minimum wage now in effect for employers with 26 or more employees (and higher rates in certain localities or industries like fast food), at-will employment terminations may come under closer scrutiny.

Employers attempting to cut costs by letting go of workers may face questions if those decisions disproportionately affect higher-paid employees, particularly those in protected classes such as older workers.

While at-will employment allows terminations without cause, businesses must still avoid actions that appear retaliatory or discriminatory.

The wage increase has also prompted some employers to reclassify roles, such as shifting workers to exempt status or independent contractors, which may influence how termination decisions are interpreted and must comply with laws like AB 5. Employees concerned about being let go due to wage-related factors should consult an employment attorney to determine whether their rights were violated under California labor laws.

Impact of PAGA Reform on Wrongful Termination Claims

The 2025 reform to California’s Private Attorneys General Act (PAGA) now encourages employers to address labor violations promptly to avoid penalties. Labor code violation cases related to wrongful termination could be affected by this revision, which includes situations involving unpaid wages or missed breaks.

An employee dismissed for reporting labor violations retains the right to file a PAGA claim if the employer neglects to remedy the problem. Employers who actively identify and resolve violations can minimize potential penalties, but need to take action before any claim gets filed. Employees need to document all communications and consult with legal professionals when they believe their termination was retaliatory instead of a lawful at-will dismissal.

Worker Surveillance and Privacy Concerns

Advancements in AI and surveillance tech prompted California lawmakers to draft new regulations that restrict employer monitoring of employees. The proposed bills focus on safeguarding employee privacy during non-working hours by setting limits on employer monitoring practices.

At-will employment does not authorize employers to freely monitor workers or terminate them based on personal data. Labor advocates in 2025 push for increased transparency in data collection and AI decision-making processes related to workplace discipline. Employees subjected to termination through unfair monitoring or digital profiling have a legitimate basis to dispute their dismissal within an at-will employment setting.

2025 Proposed Bills

• AB 1018 (Automated Decision Systems Regulation): Regulates automated decision systems (ADS) in employment to prevent discrimination and ensure transparency.
• SB 7 (No Robo Bosses Act): Limits employer reliance on automated decision systems (ADS) for critical employment decisions and enhances employee protections.
• AB 1331 (Workplace Surveillance Restrictions): Restricts workplace surveillance to protect employee privacy, particularly during non-working hours and breaks.
• AB 2288 (PAGA Reform): Reforms the Private Attorneys General Act (PAGA) to balance employee protections with employer compliance incentives.
• SB 92 (PAGA Reform Companion): Complements AB 2288 by addressing procedural and enforcement aspects of PAGA reforms.
• AB 2602 (Digital Replicas in Employment): Protects workers from unauthorized use of their digital replicas (e.g., AI-generated voice or likeness) in employment contexts.
• AB 1371 (Worker Safety and Task Refusal): Empowers employees to refuse tasks violating safety standards or posing a reasonable risk of injury/illness, with protections against employer retaliation.
• AB 1234 (Streamlining Wage Theft Complaint Process): Mandates the Labor Commissioner to schedule wage theft hearings within 90 days and issue decisions within 15 days, streamlining dispute resolution.
• AB 1015 (Employee Training Certifications): Allows employees to submit prior discrimination/harassment training certificates (within two years) to meet California’s training requirements, reducing redundant training.
• SB 642 (Pay Transparency Enhancements): Requires job and pay scales to be within 10% of the mean pay rate and prohibits paying employees of another sex less for similar work.

At-Will Employment and Reasonable Accommodation

At-will employment does not override disability rights. Expanded enforcement of California’s FEHA in 2025 prohibits employers from rejecting reasonable disability accommodations using at-will policies. A worker dismissed right after asking for accommodations such as modified working hours or assistive devices stands a good chance of winning a wrongful termination lawsuit.

Employers need to carry out a recorded interactive process to determine if accommodations are unreasonable. Employers who choose termination over accommodation discussions may breach regulations under both state and federal statutes. Employers cannot use at-will employment as a defense in cases of discrimination.

New Labor and Employment Laws for 2024

Multiple California state laws took effect on January 1, 2024. The following stand to significantly impact workers:

• AB 1033 (Expansion of CFRA Family Sick Leave)Assembly Bill 1033 broadens the policy for family sick leave in the California Family Rights Act (CFRA). Under the CFRA, employers must provide eligible employees with up to 12 weeks of job-protected leave each year so they can care for a family member with a serious medical condition. Before the passing of AB 1033, employees could obtain leave to care for spouses, children, registered domestic partners, parents, grandparents, grandchildren, and siblings. Now, workers can also use protected family sick leave for a parent-in-law.
• SB 606 (Broadening of Cal-OSHA Violation Citations)The California Division of Occupational Safety and Health (Cal-OSHA) is extremely understaffed, with only one inspector per 103,000 workers. Currently, inspectors can only visit around 20% of worksites with active safety violation complaints. Before Senate Bill 606, an employer with violations or COVID-19 outbreaks at multiple worksites would typically be cited for only one violation. SB 606 allows Cal-OSHA inspectors to issue “enterprise-wide” citations if a company demonstrates a pattern of identical violations at multiple worksites, regardless of whether the inspector visited each in person. The bill also requires inspectors to complete an “egregious violation” citation for every employee that must be hospitalized or sustains a fatal injury due to a violation. Each citation carries a fine of up to $134,334.
• AB 701 (Warehouse Quota and Penalty Disclosure)Workers at Amazon, the largest private employer of warehouse workers, report increasing rates of workplace injuries, mainly due to surveillance monitoring systems, artificial intelligence, and exploitative production quotas. AB 701 requires warehousing companies to clearly disclose their quotas and work speed metrics to all employees and government agencies. They must also disclose the penalties they impose for failing to meet quota. This bill prohibits warehouses from practices that would interfere with meals, rest periods, or bathroom breaks or violate health and safety regulations. It also protects workers from retaliation after reporting unsafe quotas to the appropriate authorities. Finally, the bill allows employees to bring legal claims against employers.
• SB 639 (Minimum Wage Adjustment for Disabled Workers)Before passing SB 639, employers with special licenses could legally pay disabled workers less than the federal minimum wage. For example, in workshops operated by Goodwill Industries, over 5,000 workers have mental or physical disabilities and may earn as little as $2 per hour for their work. While some say this practice encourages companies to hire disabled workers, others claim it is unfair exploitation. Under SB 639, the state will not issue any new sub-minimum-wage licenses for employers and will not renew existing licenses after 2024. Twelve other states have passed similar laws.
• SB 331 (Restricts Certain Employee NDA/Nondisparagement Agreements)California law prohibits employees who sign settlement agreements from disclosing facts about workplace sexual harassment allegations. SB 331 expands this law to include all forms of harassment and discrimination. It requires any covered severance, separation, or nondisparagement agreements provided by employers to explicitly state that the agreement does not prevent workers from discussing information related to illegal actions in the workplace. It also mandates that workers must be given a minimum of five business days to consider such an agreement before signing it.
• AB 1003 (Increases Wage Theft Punishment)An employer who intentionally steals wages or gratuities from workers can now be charged with grand theft. The theft must occur over $950 for a single employee or over $2,350 total from multiple workers during any consecutive twelve-month period. These individuals may be charged with grand theft and receive criminal penalties after conviction.

FAQs

Q: What does at-will employment mean in California?

A: Employment relationships in California are “at-will” because employers may legally terminate workers at any time, for any reason or none. This is legal unless both parties have agreed to a written or implied employment contract that states otherwise. The only exceptions to this rule are if this termination occurs due to a worker refusing to perform an illegal action on the employer’s behalf, reporting a violation of the law, engaging in acts that are in public interest (e.g., serving on jury duty), taking protected medical leave, or filing a workers’ compensation claim.

Q: What is wrongful termination?

A: Wrongful termination is a type of legal claim workers can file against their former employers after being fired for an illegal reason. Wrongful termination claims often result from breach of an employment contract, breach of public policy, termination due to whistleblower activities like reporting work injuries or safety violations, taking protected leave, participating in political groups or activities, or refusing to perform illegal actions. Termination after opposing discrimination and harassment or reporting these behaviors is also wrongful termination.

Q: What are the new California labor laws?

A: The following labor and employment laws will apply in 2024:

• AB 1033 (expansion of CFRA family sick leave)
• SB 606 (broadening of CAL-OSHA violation citations)
• AB 701 (warehouse quota and penalty disclosure)
• SB 62 (garment worker protection)
• SB 639 (minimum wage adjustment for disabled workers)
• SB 331 (restricts certain employee NDA/nondisparagement agreements)
• SB 807 (FEHA claim statute of limitations adjustment)
• AB 1003 (increases wage theft punishment)

Q: What will California’s minimum wage be in 2024?

A: In 2016, Senate Bill 3 amended Section 1182.12 of the California Labor Code to create a minimum wage “phase-in” that would gradually increase minimum wages in the state over the next several years. As of January 1, 2024, California’s minimum wage will be $15 per hour for employers with 26 or more employees and $14 per hour for employers with 25 or fewer employees. However, many cities, especially in the San Francisco Bay Area, have already established their own local ordinances that mandate higher minimum wages than the rest of the state.

Q:  Can I Be Fired Without a Reason Under At-Will Employment in California?

A: California follows the at-will employment doctrine, which allows employers to dismiss employees whenever they want without a justification or prior notification. This doesn’t grant employers unrestricted power.

Employers lack the legal right to terminate employees for discriminatory reasons or as retaliation against whistleblowers and public policy violations. Employers cannot legally terminate employees based on racial discrimination, gender bias, or because they reported illegal activities.

Contact Nosratilaw, A Professional Law Corporation

At-will employment allows flexibility for employers and employees in California, but does not remove the requirement to abide by legal standards. As of 2025, both state and federal laws continue to prohibit wrongful termination alongside retaliation and discrimination actions. Understanding your rights becomes increasingly crucial as employment laws develop to include minimum wage hikes and enhanced worker protections.

If your recent termination seems to be illegal, you might be entitled to pursue legal action. Nosratilaw, A Professional Law Corporation’s seasoned professionals, can assist you in understanding your case and determining if your termination broke California labor laws. Schedule your initial consultation with our trusted legal team at Nosratilaw, A Professional Law Corporation, today to protect your employment rights.