2025 is set to be a pivotal year for in-house counsel in California. The regulatory environment is shifting fast, and it can be difficult to keep up. What was once a routine compliance checklist is now a dynamic and uncompromising challenge that requires solid legal expertise, strategic vision, and cross-functional leadership.
Picture starting your week with a new audit notice for privacy practices. Your HR team is revising policies for updated wage and leave laws, and your CEO is asking about the company’s preparedness for climate risk reporting.
Meanwhile, the specter of mass arbitration and attorney general investigations looms larger than ever. In this environment, corporate compliance in 2025 is no longer about avoiding penalties but building trust, resilience, and a proactive legal risk management culture. Here is what you need to know to stay compliant.
Mastering Data Privacy: The Foundation of Modern Compliance
California has always led the nation on privacy, and the California Consumer Privacy Rights Act (CPRA) (Cal. Civ. Code § 1798.100 et seq.) has changed the compliance outlook. Companies can no longer treat privacy as an afterthought.
Why? Because the California Privacy Rights Act (CPRA) empowers consumers with several enhanced rights, including:
- The ability to correct inaccurate personal information
- Opt out of automated decision-making and profiling
- Limit the use and disclosure of sensitive personal information
Failure to honour these rights imposes increased penalties for violations. Updated 2025 Amount fines can reach up to $2,663 per violation and up to $7,988 per intentional violation. It gets even more expensive for violations involving the personal information of consumers under 16 years of age.
But the real story is in enforcement. The California Privacy Protection Agency (CPPA) intensified in 2024, with multiple investigative sweeps and thousands of consumer complaints processed. Notably, national clothing retailer Todd Snyder, Inc., was fined $345,178 after it failed to secure customer data properly and misconfigured its privacy portal, which blocked consumer opt-out requests for 40 days.
Steps to Help In-house Counsel in California CPRA Compliant
This case underscores the CPPA’s increasing focus on compliance and signals that audits and penalties are becoming more frequent and stringent. Data privacy is now the foundation upon which all other compliance efforts rest. If your privacy program is weak, every other area (employment, transparency, ESG, even AI) becomes riskier. But there are steps you can take to mitigate the risks:
- Audit data processing and vendor contracts annually.
- Update privacy notices to reflect new CPRA rights.
- Conduct quarterly breach simulations to ensure your team is ready.
- Join the CEB community for Land Regulations Protecting Personal Information to streamline your compliance program.
Employment Law and Workplace Compliance
California’s statewide minimum wage increased to $16.50 per hour for employers in January, reflecting a 3.18% inflation adjustment certified by the California Department of Finance.
In cities like San Francisco, local minimum wages already exceed this rate, with San Francisco’s minimum wage set at $18.67 per hour as of mid-2024. Correspondingly, the minimum salary threshold for exempt employees will rise to $68,640 annually ($1,320 per week), ensuring alignment with the new wage floor.
Additionally, the California Family Rights Act (CFRA) has expanded leave protections to include victims of crime or violence, granting eligible employees job-protected leave under Gov. Code § 12945.2
For in-house counsel, this means updating handbooks, payroll systems, and training materials not just for compliance but also to prevent the kind of litigation that can follow even minor mistakes. As with privacy, a single misstep can have outsized consequences.
Managing Political Expression
Compliance goes beyond numbers. The workplace is increasingly a venue for political and social expression, and the California Labor Code protects employees’ rights to political activity. In 2024, a SHRM survey found that 65% of employers faced workplace political tensions.
California offers broader protections for employee political expression than federal law. Key statutes include:
- Cal. Labor Code § 1101–1102: Employers may not control or direct employee political activity or affiliations.
- FEHA (Fair Employment and Housing Act): Protects against discrimination based on political beliefs in some contexts.
- First Amendment: Applies to government employers—not private companies—but can still shape culture and expectations.
How Internal Legal Teams Can Ensure Workplace Compliance
Effective employment compliance supports a harmonious, inclusive workplace, which in turn supports broader compliance goals. Here is how in-house counsel can stay ahead:
- Revise all handbooks to reflect wage, leave, and political expression updates.
- Draft clear, neutral political expression policies like “Employees may express political views unless disruptive or discriminatory.”
Corporate Transparency: Trust Through Ownership Reporting
The next frontier is transparency. The Corporate Transparency Act requires most business entities to file beneficial ownership information (BOI) with FinCEN, with non-compliance attracting fines of $500 per day.
This is important for California companies because transparency is part of the state’s ethos. When you demonstrate openness about your ownership structure, you reinforce the trust you’ve built through your privacy and employment practices.
This is especially critical as regulators and business partners increasingly expect clarity and accountability. To keep corporate transparency and enhance trust through ownership reporting, your internal legal teams should:
- Map ownership structures to identify BOI obligations.
- Establish annual tracking systems for ownership changes.
Climate Accountability: Advancing Compliance with ESG Mandates
Transparency naturally leads to environmental, social, and governance (ESG) compliance. California’s SB 261 Code § 38532 requires companies with over $500 million in revenue to report climate-related financial risks by 2026, with interim steps in 2025.
For in-house counsel, this means collaborating with sustainability and finance teams to validate emissions data and ensure that climate risk disclosures are accurate and defensible. ESG compliance is about meeting stakeholder expectations and building a reputation for responsibility.
Partner with sustainability teams to validate emissions and climate data to ensure compliance. Moreover, review vendor methodologies for regulatory defensibility. You could also download CEB In-House Counsel’s Guide to ESG Strategies for Private California Companies to learn more.
AI Governance and Ethical Technology Use
California is considering regulations around transparency in automated decision-making, and the NIST AI Risk Management Framework is quickly becoming the industry standard for ethical AI legal risk management.
Forward-thinking legal teams are already:
- Auditing all AI and automated decision-making tools for compliance and fairness.
- Mapping data flows to align policies with NIST standards for ethical AI.
- Enrolling in CEB AI governance MCLE to stay ahead of the curve.
This proactive approach not only mitigates legal risk but positions organizations as leaders in responsible innovation.
Litigation and Crisis Preparedness: Proactive Legal Risk Management
The intersection of privacy, AI, and employment law is a hotbed for litigation. The Video Privacy Protection Act (VPPA) is being used to target e-commerce and streaming companies. Meanwhile, mass arbitrations costing up to $3,000 per claimant underscore the need for solid arbitration clauses and crisis response plans.
Practical Steps to Anticipating AG Enforcement
California Attorney General Rob Bonta’s office increased investigations by 30% in 2024, focusing on privacy, wage theft, and greenwashing. In-house counsel should:
- Be prepared for scrutiny at any time
- Have a plan to respond quickly and transparently
- Update arbitration clauses to deter mass filings
- Conduct annual crisis response simulations with your executive team
Partner with CEB For Success in Leading a Strategic Compliance Culture
As we’ve seen, corporate compliance in 2025 is more than a checklist—it’s a journey that starts with privacy, builds through employment and transparency, and extends to ESG, AI, and litigation readiness.
The challenge is real for in-house counsel in California, but so is the opportunity. By building a proactive legal risk management culture, your internal legal team can transform compliance into a source of resilience, trust, and competitive edge.
Join CEB, California’s trusted resource for in-house counsel. Access checklists, sample forms, and our 2025 compliance webinars to enhance legal risk management.
