California Labor Law: Your Roadmap to Business Compliance
Navigating California labor law is akin to walking down a path of thorns shooting from the ground. You have to tread carefully, watching every step to avoid missteps that could lead to a prick by the thorn, halting your progress.
The thorns are reminiscent of the various labor laws in California, and a misstep is equivalent to a violation that often leads to hefty penalties. It takes an in-depth understanding and meticulous implementation to wade through the labor sector in California without a violation.
We compiled a summary of California employment laws to help wrap your head around the various stipulations and requirements. We’ll walk you through the key labor laws to consider when hiring, managing, and firing employees in California. Let’s dive in.
California Hiring Laws
Before you even get the employee through the company’s doors, you must adhere to the laws regarding the candidate’s pre-screening and interviewing process. The first set of statutes entails fair employment practices, covered under the California Fair Employment Housing Act (FEHA).
According to FEHA, if you have five or more employees, you shouldn’t discriminate against job candidates or workers based on, among other things:
- Age
- Religion
- Color
- Race
- Gender or gender expression
- Marital status
- Sex or sexual orientation
- Pregnancy
- Medical condition
- Genetic information
- Disability (physical or mental)
- National origin or ancestry
- Veteran or military status
In addition, FEHA makes it legal for any employer to retaliate against job applicants or employees for asserting their rights in accordance with the law.
Recruiting Laws
Moreover, FEHA requires that all employers provide reasonable accommodation to employees with a disability, medical condition, pregnancy, or childbirth. It also requires you to provide religious accommodation.
During the pre-screening process, conducting employee drug and credit testing with prior notice is legal. You can also perform criminal checks, but you cannot make the hiring decision based on certain criminal history, such as an arrest that didn’t lead to a conviction.
Keep in mind that according to FEHA, it’s illegal for a company with five or more employees to include questions about an applicant’s conviction history on a job application. Such a question must wait until you give the applicant a conditional offer.
Lastly, you can’t ask applicants questions regarding their salary history. And even if you found that information through other means, you can’t use it to determine what salary to offer or whether to employ the applicant.
Child Labor Law
While it’s illegal to discriminate against employees and job applicants because of their age, the California employment law is strict on child labor. The gist of the child labor law is that minors can work, but the number of hours and industries they can work in vary based on age.
The State of California prohibits minors under 16 years from working in hazardous occupations such as those involving:
- Dangerous acids
- Tobacco
- Explosives
- Scaffolding
- Railroads
- Power-driven machinery, to name a few.
If minors under 16 work in the “allowed” occupation, they can only work a maximum of eight hours per day or 48 hours per week when school isn’t in session. If school is in session, minors under 16 can only work three hours per day or 18 hours per week.
As for the work times, the law prohibits minors under 16 from working between 7 pm and 7 am.
The same work hours apply for minors aged 16 and 17, but the times differ. In this case, minors cannot work between 10 pm (12:30 am for days preceding a non-school day) and 5 am.
Regardless of age, all working minors must acquire a work permit or an employment certificate from the school they attend or the California Department of Labor. However, minors in the entertainment industry can only get a work permit through the California Labor Department.
California Time Tracking Law
Once you hire employees in California, the next step is to track their time for fair remuneration. It’s your obligation as the employer to track employee time and keep detailed records “in English language and in ink or other indelible form.”
The California law doesn’t require employers to use electronic timekeeping systems or apps. You can go the manual way and use paper and pen to track and record employee time. But remember that the California Wage Order 5-2001(7) (a) (3) requires employers to record more than clock-in and clock-out times.
The Wage Order requires employers to keep time records displaying “when the employee begins and ends each work period. Meal periods, split shift intervals, and total daily hours worked shall also be recorded. Meal periods during which operations cease and authorized rest periods need not be recorded.”
Not just that. California Labor Code 1174 requires employee payroll to show their daily hours worked and total wages paid. Moreover, you should retain these records for three years. If you consider that class actions in California can extend back to four years, you may be obligated to retain the records for an extra year.
Considering all these stipulations, it quickly dawns on you that using manual timesheets in California is complex and costly, even with a handful of employees. This is the principal reason employers in California switch to automated time-tracking tools such as Timeero.
California GPS Tracking Law
If you have a mobile workforce, such as delivery drivers, field sales teams, or construction workers, you may have considered using a GPS tracking app or device. While there’s nothing wrong with such a move, there are stipulations to consider when creating your GPS tracking policy.
We’ve covered the GPS tracking stipulations in detail in our comprehensive California GPS tracking law guide. You can read the nitty-gritty details of the newly passed AB-984, California Consumer Privacy Act (CCPA), and California Penal Code Sec.637.7.
The crux of this law is that:
“An employer, or a person acting on behalf of the employer, shall not use an alternative device to monitor employees except during work hours, and only if strictly necessary for the performance of the employee’s duties.”
Timeero tracks employee location in real time within the stipulations mentioned above. The app stops tracking employees’ GPS location when they clock out, meaning it tracks location during employee’s work hours only.
When you click “who’s working,” you can see all clocked-in employees and their real-time location. You can also use the route replay to trace their route during the day and select a breadcrumb to see employee time and speed at any point during the journey.
California Break Law
According to the California time tracking law, employee time records must show meal periods and rest breaks, but that’s not all. There are stipulations governing employee breaks in California, as you can read in our California break law guide.
Rest Break in California
California labor regulations require you to provide non-exempt employees with a 10-minute rest break every four hours of work or a major portion thereof. The state law interprets the ‘major portion’ as a period of two hours. The rest break time should be factored into the time worked and, therefore, must be paid.
Meal Period in California
Besides the rest break, the California Labor Code section 512 and IWC Orders require you to offer non-exempt employees who work more than five hours a day a non-paid period of not less than 30 minutes. Employees who work a daily shift of more than 10 hours are entitled to a second 30-minute meal period.
Besides providing a 30-minute meal break, employers must relinquish control over employee activities. In other words, you can’t dictate what the employees do during the meal period or require them to stay on-site.
Breastfeeding Break
California Labor Code section 1030 requires employers to provide breastfeeding breaks or pumping time for employees who need to express milk. This is additional break time, besides the rest and meal periods, and it’s non-paid. Another thing to note is that lactating employees don’t need to provide a doctor’s note to earn the break.
There are plenty of break stipulations to wade through in California. Besides premium pay requirements, we have covered the potential pitfalls and the consequences of violating breaks in our guide on how to avoid break-tracking mistakes in California.
How Timeero Enforces California Break Law
Not all time-tracking tools can track breaks in accordance with the California break law. Luckily, we introduced a California break tracker to help California employers track rest and meal breaks in strict conformity with the law. The tool has two notable features.
First, it’s configured to prevent employees from ending their breaks early. For example, if an employee tries to end the meal break before the 30 minutes are over, the app sends them a message: “You cannot end your break early. Wait till the minimum break time is exceeded before ending your break.”
Second, we designed a daily sign-off form to help you enforce the California break policy. When an employee works for more than 3.5 hours and they try to clock out, Timeero won’t let them until they sign the daily sign-off form as proof that they took breaks in full compliance with the law.
California Overtime Law
There are two sides to the California overtime law: on a regular schedule and an alternative workweek schedule.
Overtime on Regular Workweek Schedule
California labor regulations require employers to pay employees one and a half times their regular rate of pay for hours in excess of eight hours up to including 12 hours in a workday. The same rate applies for the first eight hours worked on the seventh consecutive day in a workweek.
Moreover, employees are entitled to two times their regular rate of pay for hours worked over 12 in a workday. The same rate applies for hours worked in excess of eight on the seventh consecutive day of the workweek.
Overtime on Alternative Workweek Schedule
No overtime payment is required for an alternative workweek schedule with not more than 10 hours workday in a 40-hour workweek.
However, employees are entitled to one and a half times their regular rate of pay for hours in excess of 10 and up to 12 hours in a workday. The same rate applies for hours worked (up to eight) on a day not included in the workweek schedule.
On the other hand, employees are entitled to double their regular rate of pay for hours worked in excess of 12 and hours more than eight on days not included in the alternative workweek schedule agreement. Learn more in our Alternative workweek schedule guide.
Timeero for California Overtime Law Compliance
Timeero’s California overtime tool helps you enforce the overtime law whether you’re on the regular or alternative workweek schedule.
No more complex time-tracking configurations to track overtime or double time in California. Head to Timeero’s company settings page → Payroll & Overtime → Add new overtime rule and select “use California Overtime Rule.” Timeero will apply the overtime rule and automatically compute employee overtime and double time.
If you’re on an alternative workweek schedule, select “custom overtime rules” and configure the work hours to match your schedule. Again, the app will compute overtime and double time based on the schedule.
California Leave Requirements
The laws governing employee time-off and leaves in California include:
Paid Sick Leave
California’s general paid sick leave law requires employers to give employees at least 24 hours (equivalent to three workdays) of paid sick leave per year. However, California’s new sick leave policies allow employers to adopt an accrual or no-accrual approach.
In an accrual sick leave policy, employees earn one hour of paid sick leave every 30 hours. This schedule may lead to employees earning the total yearly sick leave limit (24 hours) by the 120th day of employment in a year.
However, the law permits employers to cap the paid sick leave an employee can use in a year to three days or 24 hours. The employee can carry over unused accrued sick leaves but can’t have more than 48 hours or six days of accrued paid sick leaves per year.
In a no-accrual or upfront policy, the employer allows employees to use at least 24 hours or three days of paid sick leave per year. The paid sick leave time must be available for employees from the start of each employment year.
Paid Family Leave
California Paid Family Leave (PFL) offers benefit payments for employees needing time off to bond with a newborn, care for ill family members, or participate in a qualifying event. Eligible employees may take up to eight weeks of PFL and receive payment of about 60-70 percent of their weekly wages during the family leave.
Unpaid Family and Medical Leave
Under the California Family Rights Act (CFRA) and the Family and Medical Leave Act (FMLA), eligible employees of covered employers are entitled to a job-protected leave. Employees may qualify for unpaid family medical leave when:
- Taking care of a seriously ill family member
- Bonding with a newborn
- Bonding with an adopted child
- The employee is not able to work due to a severe health condition
In addition, you should consider the law governing other leaves, such as:
- Vacation and holiday
- Bereavement Leave
- Civil air patrol
- Literacy leave
- Voting time leave
- Jury duty leave
- Sexual assault and domestic violence leave
- Organ donation leave
- Emergency response leave
- Drug and alcohol rehabilitation leave
- School discipline leave, etc.
How Timeero Time-off Feature Helps
With Timeero, it’s easy to add different time-off and leave categories as the law stipulates. We’ve also made it easier for employees to request time off or leave on mobile phones.
Before submitting the time-off request, the employee must provide a reason for the time-off or leave, making it easier for the manager to approve or reject the request.
For example, if an employee requests paid sick leave, you can determine whether their reasons meet the threshold set on the California sick leave requirements.
California Wage Law
The State of California minimum wage law and exceptions aren’t in tune with the federal minimum wage regulations.
Since 2017, California has been following a phased-in approach to push the minimum wage for all employers to at least $15 per hour. Here’s the progress of the $15 phase-in equal pay schedule:
Remember that some cities and counties in California may have different wage rates, so check out the list of city and country minimum wages.
The state minimum wage applies to all employees in California — including non-exempt and exempt employees, but excluding independent contractors.
Moreover, as of January 1, 2023, the state of California adjusted the minimum monthly wage for sheep and goat herders to $2,755.48 per month.
California Payment Law
California Department of Industrial Relations has strict paydays, pay frequency, and final wage requirements.
According to the California payment law, with only a few exceptions, you must pay non-exempt employees twice each calendar month. You can, however, pay exempt employees once every month.
In both cases, you must designate the regular paydays in advance. In addition, you must furnish employees with details on where and how they will be paid. Remember that overtime wages must be paid no later than the next regularly scheduled payday.
As for the mode of payment, you can pay employees either in cash or by checks that can be cashed without fees or discounts. The law permits direct deposits if the employee authorizes them and chooses a financial institution with a branch in California.
Regardless of the mode of payment, Labor Code Section 226(a) requires employers to provide employees with an itemized written pay statement each time they receive the wage. The statement should show details such as:
- Gross wages
- Net wages
- Total work hours
- Piece-rate unit if employees are paid on a piece-rate basis
- Deductions
- Dates of the pay period
- Employee details (name, last four digits of Social Security Number, ID number)
- Employer’s name and address
- Applicable hourly rates
Timeero Simplifies Employee Remuneration
When creating an employee profile in Timeero, you can enter the agreed pay rates, either hourly or daily. It uses that rate to compute workers’ compensation, including regular and overtime compensation.
The app tracks time and separates overtime/double time from the regular hours. It then computes employee double time and overtime pay based on the California overtime law, and you don’t have to lift a finger.
When the payday rolls around, you can generate the payroll report and send it to the finance department for verification and remuneration.
California Employee Benefits
Beyond the regular wage payments, employees in California are entitled to benefits such as:
Temporary Disability Insurance
This is an employee benefit provided by the State Disability Insurance (SDI) plan — a state-run program managed by the Employment Development Department (EDD).
Under this program, employees who cannot work due to a nonwork-related injury or illness get partial wage replacement.
Continuation of Health Coverage
If an employee loses a job (voluntary or involuntary) or loses employer-sponsored coverage either due to job transition, reduction in work time, divorce, or other major life events, the Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) law allows the affected employee and their families to continue group health benefits for 18-36 months.
The Califonia COBRA (Cal-COBRA) may chip in if the federal health coverage is 18 months. In this case, the Cal-COBRA under the Department of Managed Health Care may extend the coverage to 36 months.
California Workplace Safety Law
The notable workplace safety laws in California include:
Occupational Safety and Health
The job safety and health programs in California cover the private sector and are approved by the federal body Occupational Safety and Health Administration (OSHA).
One of the programs is the California Occupational Safety and Health Act (Cal. OSH Act). Under this act, you must create and maintain a safe work environment for employees in California.
This should be grounded on a written Injury and Illness Prevention Program outlining instructions on safe workplace practices, among other things.
Safe Driving Practices
If you have a mobile team, such as delivery drivers or outside sales reps, they must adhere to California safe driving practices.
The law prohibits drivers from using hand-held cell phones or electronic wireless communication devices while driving. However, the driver can use voice-operated or hands-free functions on their communication device. They may use a single swipe or tap on the hand-held phone if mounted on the vehicle dashboard, center console, or windshield.
California Termination Law
Employees and employers in California are free to initiate employment termination at any time. However, there are a few critical conditions to consider when terminating an employee.
For example, you must ensure the termination adheres to all state and federal laws, public policy, and employment contracts. To that end, you cannot fire employees based on gender, religion, race, color, ancestry, national origin, medical condition, disability, age, marital status, or sexual orientation.
Job applicants, employees, and former employees who have suffered retaliation, discrimination, sexual harassment, or unlawful termination can file a claim with the California Labor Commissioner.
In addition, you must pay all employee wages at the time of termination, popularly known as the final paycheck. According to California law, “all wages” include earned but unused vacation pay.
However, the law doesn’t require employers to compensate employees for accrued paid sick leave.
California Mass Lay-Offs
In case of mass lay-offs, company relocation, or plant closure, the Worker Adjustment and Retraining Notification (WARN) requires employers to give employees a 60-day notice.
Run California Business Risk-Free
California labor laws are complex, and this guide has shed light on the major requirements and regulations. Admittedly, the guide hasn’t scratched every surface as far as the employment law in California goes. Bear in mind that we compiled the guide in Q3 2023; therefore, it doesn’t cover any law change after its publication.
For these reasons, we recommend visiting the official websites and relevant resources for the latest and most comprehensive guidance. In addition, consult legal advisors in California for proper guidance on implementing the various laws.
Disclaimer: Timeero is not liable for any loss or penalties incurred for using this guide without proper consultation with a legal advisor in California.
