10 Crucial Employment Laws Important to CA Employers
California has a reputation for being called the “land of opportunity” for those chasing the “California Dream” and there is no denying the fact that it is one of the most rewarding places in the United States to do business. Despite California’s thriving economy, networking opportunities, entrepreneurial culture, beautiful environment, and the constant influx of tourists, there are various challenges business owners face.
The most common challenge for business owners in California is the number of employment laws unique to the state. While employment laws are put in place at a federal level to ensure minimum requirements for every employer are met, California has added many additional laws that apply specifically to organizations operating in the state. California, notoriously a very employee-friendly state, can be great for the roughly 18 million employees across the state, however, it can put additional stress on business owners when it comes to remaining in compliance. According to a survey by Oasis, 45% of small business owners spend roughly 1 day a week or more on administrative human resources issues. That roughly 400 hours per year may be higher in California due to the additional employment laws in this state. So what are some of the employment laws unique to CA and how can you go about navigating them?
Compensation is a huge factor when it comes to running a business. Not only is it important to be in compliance with compensation practices for the employee’s sake, but it is equally important for the employer as well. Below are a few compensation laws to be aware of in the state of California.
1. Minimum Wage
As of January 1, 2022, the CA minimum wage for employers with 25 or fewer employees is $14.00 an hour. For larger employers with 26 or more employees, the minimum wage is $15.00 an hour. Some cities will have a higher minimum for employees within their city limits. In addition, CA has a higher minimum wage than the federal requirement for an employee to be classified as exempt from overtime. Learn more about California’s minimum wage laws (and local minimum wages) on the California Department of Industrial Relations website.
In the state of California, there are a few instances where an employer is required to pay their employees overtime pay of one and a half times their regular rate of pay. As a general rule of thumb, overtime pay applies if an employee works over eight hours in one day or if they work more than 40 hours in a week. An employer is also required to pay their employees overtime if they work a seventh consecutive day in a workweek. Learn more about overtime requirements on the California Department of Industrial Relations website.
3. Rest and Meal Breaks
California employers must provide their nonexempt employees with a paid 10-minute rest break for each 4-hour work period. Furthermore, this rest period should be as close to the middle of that 4-hour work period as possible. If an employer does not authorize or permit a rest period, the employer is responsible to pay the employee one hour of premium pay for each workday that the rest period is not provided.
In addition to rest breaks, employers in California must provide non-exempt employees with a 30-minute meal period if their shift is more than 5 hours unless the shift will be less than 6 hours and both the employee and the employer agree to waive the meal period for that shift. If an employee’s shift is over 10 hours, a second meal period of 30-minutes must be provided. The meal period will be unpaid as long as the employee is completely relieved of duties and is permitted to leave the workplace. In the case that the employee is required to take an on-duty meal period if they are the sole worker at that place and time then they must be paid for that time at their regular rate of pay. If an employer does not authorize or permit a meal break, the employer may be responsible to pay the employee one hour of premium pay for each workday that the meal period is not provided.
Learn more about rest and meal breaks on the California Department of Industrial Relations website.
4. Breastfeeding Breaks
Per Labor Code Section 1030 California employers must provide a reasonable amount of break time to accommodate an employee desiring to express breast milk for the employee’s infant child each time the employee has a need to express milk. The break time shall, if possible, run concurrently with any break time already provided to the employee. Break time for an employee that does not run concurrently with the rest time authorized for the employee by the applicable wage order of the Industrial Welfare Commission need not be paid. If an employer does not authorize or permit a breastfeeding break or provide an adequate space to express milk the employer may be required to pay the employee one hour of pay for each workday that the breastfeeding break is not provided.
5. Expense Reimbursement
At the federal level, an employer is able to refuse to pay for business expenses as long as their full-time employee is earning minimum wage, but that is not the case in California. According to California Labor Code Section 2802, employers in California are required to reimburse their employees for any business-related expenses that an employee pays for out of pocket. Not only does this include mileage reimbursement which is currently 58.5 cents per mile, but it may also include training, education, as well as phone and internet expenses.
Time Off and Leaves of Absence
Below are a few examples of leaves of absence unique to the state of California. For more information on leaves of absence and required time off please visit the Department of Industrial Relations Personal Leave of Absence page.
6. Medical and Family Leave
The Fair Employment and Housing Act, enforced by the Department of Fair Employment and Housing (DFEH) contain family care and medical leave provisions, known as the California Family Rights Act (CFRA), for employees who live in California and their employer employs five (5) or more part-time or full-time employees. To be eligible for CFRA an employee must have more than 12 months of service with the employer and have worked at least 1,250 hours for that employer in the 12-month period prior to the beginning of the leave. Employees may take unpaid time off to care for a seriously ill parent, spouse, registered domestic partner, grandparent, sibling, grandchild, or child, for the employee’s own serious health condition, or to bond with an adopted or foster child or newborn. They may also take time off to assist an eligible family member who is a servicemember on covered active duty or who is called to covered active duty service. Employees may take leave for up to 12 workweeks in a 12-month period. The leave does not need to be taken in one continuous period of time. An employer may require 30-day advance notice, but when this is not possible due to the unexpected nature of the leave, notice should be given as soon as possible. Notice can be written or verbal.
7. Pregnancy Disability Leave
In addition to the leave requirements of the CFRA, employers of five (5) or more employees also have additional obligations pertaining to Pregnancy Disability Leave (PDL), also enforced by the DFEH. An employee disabled by pregnancy, childbirth, or recovery is entitled to up to four months of unpaid disability leave. Leave may be taken before or after birth during any period of time the employee is physically unable to work because of their pregnancy, childbirth, recovery, or a related condition. Employees are entitled to take pregnancy disability leave in addition to any leave entitlement they might have under CFRA.
8. Additional Types of Leaves
In addition to the CFRA and HWHFA, a California employer may also be required to comply with more than a dozen other leave and time off laws, such as:
• Sick Leave
• Jury Duty
• Emergency Duty As A Volunteer Firefighter, Reserve Police Officer, or Emergency Rescue Personnel
• Time Off To Visit The School of a Child
• Time Off To Appear At School When Required By The School
• Time Off To Vote
• Drug and/or Alcohol Rehabilitation
• Literacy Assistance
• Temporary Military Leave And/Or Reserve Duty
• Domestic Violence, Sexual Assault, or Stalking
• Witness and Crime Victim
Recruiting and Hiring
In order for an employer to be in compliance, they must know a few California laws that affect the recruiting and hiring process. Three of these laws are as follows:
9. Fair Chance Act (Ban the Box)
As of January 1, 2018, the California Fair Chance Act, aims to reduce undue barriers to employment for individuals with criminal histories. Among other requirements, the fundamental requirement of this law is employers with five or more employees are prohibited from asking a job candidate about their conviction history before making a job offer.
10. Pre-Employment Background Screening
Due to the strong privacy rights in California, there are some additional steps and information that need to be provided to candidates when performing background screens such as drug screening, credit checks, and criminal background checks. For example, California has stricter rules and additional documents required than the Federal government for conducting these checks as laid out in the Investigative Consumer Reporting Agencies Act (ICRAA). In addition, before making a final decision, an employer is required to go through a detailed follow-up process with a candidate whose background screen report contains information that may cause the employer to not want to hire the candidate.
These 10 employment laws in the state of California just scratch the surface when it comes to HR compliance. Although overwhelming at times, setting up processes and protocols in accordance with local, state, and federal laws will ensure your business is compliant. At SDHR Consulting, we are pros when it comes to compliance. In the past year alone, we have helped over 132 clients become fully compliant with their HR practices. Our team of HR professionals has over 24 years of experience and our consultants are all based in Southern California, making them experts on California employment law. Contact us today to set up a complimentary strategy session.
Authors: Baylee Davies and Traci Hagan