California Labor Law Guide
California, known for its thriving business landscape, is also home to a complex web of labor laws. As a business owner, it is crucial to have a strong understanding of these laws and navigate them effectively. Don’t worry, we’ve got you covered with a handy guide to the California labor laws that every savvy entrepreneur should be aware of.
Minimum Wage
$15.50
Overtime Wage
$1.5x Regular Wages
Meal Breaks
30min for every 5 hours
Rest Breaks
10min for every 4 hours
California sets a higher minimum wage compared to the US federal labor law standard. It’s important to stay updated on the state and local minimum wage rates as they can vary based on the size of your business.
The mandated minimum wage in California is $15.50 per hour, applicable to all employers irrespective of their business size.
Exempt employees have a minimum salary threshold of $1,240 per week ($64,480 per year), independent of the number of individuals they employ.
For exempt computer software employees, the minimum hourly rate is established at $53.80 per hour, or an annual salary of $112,065.20.
Several city and county governments in the state of California mandate minimum wages, which may vary from the statewide mandated minimum wage. Here is a list of local jurisdictions in California with their minimum wages:
Hayward (25 or fewer employees): | $15.50 |
Hayward (26 or more employees): | $16.34 |
Richmond (with benefits): | $15.50 |
Novato (25 or fewer employees): | $15.53 |
Novato (26–99 employees): | $16.07 |
Novato (100 or more employees): | $16.32 |
Oakland: | $15.97 |
Oakland (hotels with health benefits): | $17.37 |
Oakland (hotels without health benefits): | $23.15 |
Sonoma City (25 or fewer employees): | $16.00 |
Sonoma City (26 or more employees): | $17.00 |
Daly City: | $16.07 |
Richmond (without benefits): | $16.17 |
Redwood City: | $17.00 |
Menlo Park: | $16.20 |
San Diego: | $16.30 |
San Carlos: | $16.32 |
Half Moon Bay: | $16.45 |
Burlingame: | $16.47 |
East Palo Alto: | $16.50 |
Foster City: | $16.50 |
South San Francisco: | $16.70 |
Belmont: | $16.75 |
San Mateo City: | $16.75 |
San José: | $17.00 |
West Hollywood (49 or fewer employees): | $17.00 |
West Hollywood (50 or more employees): | $17.50 |
West Hollywood (hotels): | $18.35 |
Petaluma: | $17.06 |
Santa Rosa: | $17.06 |
Cupertino: | $17.20 |
Los Altos: | $17.20 |
Santa Clara: | $17.20 |
Palo Alto: | $17.25 |
El Cerrito: | $17.35 |
Sunnyvale: | $17.95 |
Mountain View: | $18.15 |
The Golden State follows a daily overtime system. This means that employees are entitled to overtime pay for hours worked beyond 8 in a day. Familiarize yourself with these rules to avoid any costly disputes.
- Daily Overtime: For most non-exempt employees, overtime is calculated on a daily basis. Employees are entitled to overtime pay for any hours worked beyond 8 hours in a workday.
- Weekly Overtime:Overtime is also calculated on a weekly basis. Employees are entitled to overtime pay for any hours worked beyond 40 hours in a workweek.
- Double Time: Double-time pay is required for hours worked beyond 12 hours in a workday. Additionally, employees are entitled to double-time pay for hours worked beyond 8 hours on the seventh consecutive day of work in a workweek.
- Alternative Workweek Schedules: Employers may implement alternative workweek schedules, such as a 4/10 schedule (four 10-hour workdays). In such cases, overtime is calculated differently, and employees are entitled to overtime pay beyond the agreed-upon schedule.
- Exemptions: Certain exemptions exist for specific categories of employees, such as executive, administrative, or professional employees. These exemptions are based on salary, job duties, and other criteria.
- Compensatory Time Off: In California, private sector employers are generally not allowed to offer compensatory time off in lieu of paying overtime wages. Overtime must be compensated with premium pay.
- Minimum Overtime Rate: Overtime pay in California is generally calculated at 1.5 times the employee’s regular rate of pay. Double-time pay is calculated at 2 times the regular rate of pay.
- Seventh Consecutive Day Premium Pay: Employees who work on the seventh consecutive day in a workweek are entitled to premium pay. The first 8 hours worked on this day are paid at 1.5 times the regular rate, and hours beyond 8 are paid at double the regular rate.
- Recordkeeping: Employers are required to maintain accurate records of hours worked, including overtime hours. This information should be readily available for inspection.
California labor law ensures that employees are well taken care of by implementing specific rest break requirements. Let’s take a quick look at the rest break rules in California:
- Timing of Rest Breaks: Employees are entitled to a paid rest break that should ideally be scheduled in the middle of their work period. These breaks are based on the total hours worked in a day and are meant to provide rejuvenation.
- Duration of Rest Breaks: Employees are entitled to a 10-minute rest break for every four hours worked, or a significant portion thereof. However, if the workday is less than three and a half hours, no rest break is required.
- Rest Break Compensation: Rest breaks are considered paid time, which means that employees should receive their regular rate of pay during these breaks. It’s fair compensation for the time they take to recharge.
- Authorization and Encouragement: Employers are responsible for authorizing and encouraging rest breaks. While it’s important for employers to make these breaks available, they are not required to ensure that employees take them. However, they can create a supportive environment to encourage employees to utilize their rest breaks.
- Denial of Rest Breaks: Employers are strictly prohibited from hindering or discouraging employees from taking their deserved rest breaks. If a rest break is not provided, employers may be obligated to provide additional pay to compensate for this oversight.
- Exemptions for Certain Industries: It’s important to note that some industries, like agriculture and certain healthcare positions, have specific rules and exemptions regarding rest breaks. Employers in these industries must stay informed about the applicable regulations to ensure compliance.
- Record-Keeping: Employers must maintain accurate records of employees’ rest breaks, including the time they are taken. This helps in ensuring transparency and adherence to labor laws.
California’s Healthy Workplaces, Healthy Families Act grants employees in California paid sick leave. Let’s take a look at the key provisions
- Paid Sick Leave: Under the Healthy Workplaces, Healthy Families Act, California mandates employers to grant paid sick leave to their employees. Accrual of one hour of paid sick leave is earned for every 30 hours worked, commencing either at the commencement of employment or on July 1, 2015, whichever is later.
- Family and Medical Leave (CFRA): The California Family Rights Act (CFRA) grants eligible employees the entitlement to take up to 12 weeks of unpaid leave within a 12-month period for qualifying family or medical reasons. These reasons encompass childbirth or adoption of a child, serious health conditions, or caring for a family member with a severe health condition.
- Pregnancy Disability Leave (PDL): Employees incapacitated due to pregnancy, childbirth, or related medical conditions are entitled to up to four months of unpaid leave under California’s Pregnancy Disability Leave, in addition to any other eligible leave.
- Paid Family Leave (PFL): California’s Paid Family Leave initiative offers partial wage replacement benefits to employees who require time off to bond with their newly born child or care for a family member with a critically debilitating condition.
- Paid Time Off (PTO): Although there are no paid time off rules in California, many employers in the state adopt Paid Time Off (PTO) policies that combine vacation and sick leave. These policies must adhere to labor laws and be communicated explicitly to employees.
- Bereavement Leave: While California lacks a specific law mandating bereavement leave, employers have the option to include such provisions in their policies.
- Jury Duty and Witness Leave: Employers in California are prohibited from penalizing employees summoned to serve on a jury or act as a witness in court.
- Domestic Violence, Sexual Assault, or Stalking Leave: Employees who become victims of domestic violence, sexual assault, or stalking are entitled to take leave for specific purposes, which may include seeking medical attention, obtaining restraining orders, or participating in safety planning.
- School Activities Leave: Under California’s Family-School Partnership Act, parents are granted up to 40 hours of unpaid leave per year to engage in activities at their child’s school.
- Kin Care: California’s Kin Care law permits employees to utilize half of their accrued sick leave to care for an ill family member.
Properly classifying employees as exempt or non-exempt is of utmost importance. Misclassification can lead to legal repercussions. Familiarize yourself with the criteria for exemption status to ensure you are in compliance.
California’s Equal Pay Act prohibits wage discrimination based on gender. It is essential to ensure fair and equal compensation for employees performing substantially similar work, regardless of gender.
Employers must adhere to a multitude of regulations and guidelines to ensure equitable and lawful employment practices. Here is an overview of these laws
Hiring Rules:
- Equal Employment Opportunity (EEO): Employers must comply with EEO laws, which prohibit discrimination based on race, color, religion, sex, national origin, disability, or genetic information. It is imperative to adopt fair and unbiased hiring practices.
- Job Advertisements: Job postings should be all-encompassing, avoiding any language that may be discriminatory. Clear communication of essential job requirements and qualifications is essential.
- Application Process: Design an inclusive application process that is accessible to all candidates. Avoid posing illegal or irrelevant questions that could lead to discrimination claims.
- Interviews: Conduct interviews in a fair and consistent manner. Avoid questions that delve into an applicant’s protected characteristics and focus on relevant job-related inquiries.
- Background Checks: If background checks are conducted, it is crucial to comply with the Fair Credit Reporting Act (FCRA) and obtain written consent. Consider the relevance of an individual’s criminal history to the job.
- Work Eligibility Verification: Verify the eligibility to work using the Form I-9 for every hired employee. Ensure compliance with immigration laws.
- Reasonable Accommodation: During the hiring process, provide reasonable accommodations for applicants with disabilities. Failure to do so may violate the Americans with Disabilities Act (ADA).
Firing rules:
- At-Will Employment: Understand the concept of at-will employment, wherein either employers or employees can terminate the employment relationship at any time, with or without cause, as long as it is not for an illegal reason.
- Termination for Cause: Clearly define the reasons for termination, ensuring they align with employment agreements, company policies, and applicable laws. Common causes include poor performance, violation of company policies, or misconduct.
- Avoiding Illegal Termination: Avoid terminating employees for discriminatory reasons, such as race, gender, religion, disability, or age. Such actions can lead to legal consequences.
- Notice Periods: Be aware of any contractual or legal obligations regarding notice periods for termination. Some employment contracts or state laws may require specific notice periods.
- Severance Packages: Consider providing severance packages, particularly for long-term employees. Clearly outline the terms and conditions in severance agreements.
- Final Paychecks: Promptly provide final paychecks, adhering to state regulations. Ensure the payment includes any accrued vacation or paid time off, if applicable.
- Exit Interviews: Conduct exit interviews to gather feedback and insights. Ensure a smooth transition for both the departing employee and the remaining team.
- Documentation: Maintain comprehensive documentation of performance issues, disciplinary actions, and the reasons for termination. Such documentation can be crucial in the event of legal challenges.
Navigating the intricacies of the recruitment and separation processes requires a thorough understanding of federal, state, and local employment laws. Seeking legal advice or consulting with an HR professional can provide tailored guidance based on your specific circumstances and jurisdiction.
Remember, these laws are subject to change, so staying informed is key to compliance. We recommend consulting with legal professionals to ensure your business aligns with the latest California labor regulations. Don’t hesitate to reach out for assistance in navigating these labor laws and ensuring a smooth business operation.