California Employment Law

California employment law provides significantly greater protections than federal law in many areas, creating a complex compliance environment for California employers. California's Labor Code, Fair Employment and Housing Act (FEHA), and numerous other statutes establish requirements that often exceed federal standards. This slice covers California-specific requirements; federal requirements still apply (see US Employment Law Primer) and universal concepts apply (see Employment Law Primer). When California and federal law conflict, employers must comply with whichever provides greater protection to employees.

California Wage and Hour Law

California wage and hour requirements are among the most protective in the nation, with higher minimum wages, daily overtime, meal and rest break requirements, and strict record-keeping obligations.

California minimum wage is higher than federal and increases annually. For 2024, the state minimum wage is $16.00 per hour for employers with 26+ employees and $15.50 for employers with 25 or fewer employees. Many California cities and counties have even higher local minimum wages (San Francisco, Los Angeles, San Diego, and others exceed $16). Employers must pay the highest applicable rate (federal, state, or local). The state minimum wage is scheduled to continue increasing, with $16.00 applying to all employers by 2025.

Daily overtime is unique to California. While federal law requires overtime only after 40 hours per week, California requires overtime after 8 hours per day (1.5x) and double time after 12 hours per day (2x) or after 8 hours on the 7th consecutive day of work. Weekly overtime (1.5x after 40 hours) also applies. The "alternative workweek" allows some flexibility but requires employee vote and specific conditions. Daily overtime creates significant compliance challenges for employers used to federal weekly-only calculations.

Meal and rest breaks are mandatory in California. Non-exempt employees must receive unpaid 30-minute meal break (or paid 30-minute meal break if employee cannot leave premises) if working more than 5 hours. If working more than 10 hours, second meal break required. Meal breaks must start before the end of the 5th hour (or 10th hour for second break). Rest breaks of 10 minutes for every 4 hours worked (or major fraction thereof) must be paid and taken in the middle of each work period. Employers cannot require employees to work through breaks. Violations result in one hour of pay per violation (premium pay, not just regular pay).

Exempt classification is stricter in California. The salary threshold is much higher—for 2024, exempt employees must earn at least $66,560 annually (twice the state minimum wage for full-time work), significantly higher than the federal $35,568. The duties tests are also interpreted more strictly, with California courts applying a "primarily engaged" standard requiring exempt duties to comprise more than 50% of work time. The computer professional exemption requires higher salary ($115,763.35 annually for 2024) and specific job duties. Outside sales exemption has no salary requirement but requires making sales away from employer's place of business and earning more than 50% of compensation from commissions.

Piece rate compensation has special rules. Employees paid by piece rate must receive separate compensation for rest breaks and non-productive time (time spent on tasks that don't directly produce piece-rate work). The rate for rest breaks and non-productive time must be at least minimum wage.

Final pay requirements are immediate in California. Employees who are terminated must receive all wages immediately. Employees who quit must receive wages within 72 hours (or immediately if they give 72 hours notice). Accrued but unused vacation must be paid out upon termination (California treats vacation as earned wages). Waiting time penalties apply if final pay is late—employees can recover up to 30 days of wages as penalty.

Wage statement requirements are detailed. Employers must provide itemized wage statements showing gross wages, deductions, net wages, hours worked, pay period dates, employer name and address, employee name and last 4 digits of SSN or employee ID, applicable hourly rates and hours worked at each rate, and all deductions. Penalties apply for non-compliant statements ($50 for first violation, $100 for subsequent violations, per employee per pay period, up to $4,000 per employee).

California Leave Requirements

California provides significantly more generous leave than federal law, with multiple overlapping programs creating complexity.

California Family Rights Act (CFRA) provides job-protected leave similar to FMLA but with important differences. CFRA applies to employers with 5+ employees (much lower than FMLA's 50+), covers 12 weeks per year, and has similar eligibility requirements (12 months service, 1,250 hours). Key difference: CFRA doesn't cover employee's own serious health condition (that's covered by separate California disability leave), but does cover family member care. CFRA and FMLA can run concurrently when both apply, but CFRA can provide additional leave beyond FMLA in some circumstances.

California Paid Family Leave (PFL) provides wage replacement (not job protection) for up to 8 weeks per year for bonding with new child, caring for seriously ill family member, or qualifying military exigency. Benefits are paid through state disability insurance (SDI) program, funded by employee payroll deductions. The benefit amount is approximately 60-70% of wages (subject to maximum weekly benefit, $1,619 for 2024). PFL runs concurrently with CFRA for job protection. Employees can take PFL even if not eligible for CFRA job protection.

California State Disability Insurance (SDI) provides wage replacement for employees unable to work due to non-work-related illness or injury. Benefits last up to 52 weeks, with 7-day waiting period. Funded by employee payroll deductions. SDI provides job protection when combined with CFRA or other leave laws.

Paid Sick Leave is mandatory in California. Employees accrue at least 1 hour of paid sick leave for every 30 hours worked, up to 24 hours (3 days) per year, or employers can provide 24 hours upfront. Employees can use sick leave for their own illness, family member care, or certain other purposes. Unused sick leave carries over (up to 48 hours) but employers can cap usage at 24 hours per year. Many California cities have more generous paid sick leave requirements.

Pregnancy Disability Leave (PDL) provides up to 4 months of job-protected leave for pregnancy, childbirth, and related conditions. Applies to employers with 5+ employees. Runs concurrently with FMLA/CFRA when applicable but can provide additional leave. Health benefits must continue during leave.

School activities leave allows employees to take time off (up to 40 hours per year, but not more than 8 hours per month) to participate in children's school activities. Applies to employers with 25+ employees. Leave can be unpaid, but employees can use accrued vacation or other paid time off.

Victim leave provides job-protected leave for employees who are victims of domestic violence, sexual assault, or stalking. Applies to employers with 25+ employees. Employees can use leave for medical attention, counseling, safety planning, or legal assistance.

Bereavement leave isn't mandated by state law, but many local ordinances require paid bereavement leave.

California Protected Classes and Discrimination

California's Fair Employment and Housing Act (FEHA) provides broader protections than federal law.

FEHA coverage applies to employers with 5+ employees (much lower than federal 15+). Protects against discrimination based on race, color, ancestry, national origin, religion, age (40+), disability, sex (including pregnancy, childbirth, breastfeeding, gender identity, gender expression), sexual orientation, marital status, military/veteran status, genetic information, and medical condition.

Additional protected characteristics in California include: marital status, sexual orientation, gender identity, gender expression, medical condition, genetic information, and military/veteran status (broader than federal). California also protects against discrimination based on reproductive health decision-making.

Harassment protections are broader. FEHA prohibits harassment based on protected characteristics, and California law doesn't require harassment to be severe or pervasive (unlike federal hostile work environment standard). A single incident can create liability if it's sufficiently severe. Employers are strictly liable for harassment by supervisors, and can be liable for coworker or third-party harassment if they knew or should have known and failed to take immediate corrective action.

Reasonable accommodation requirements are similar to ADA but apply to smaller employers (5+ employees versus federal 15+). California also requires accommodation for pregnancy, childbirth, and related conditions.

Criminal history restrictions are significant. California's "ban the box" law (Fair Chance Act) prohibits employers with 5+ employees from asking about criminal history until after conditional offer. Employers can only consider criminal history if it has direct relationship to job duties, and must follow specific process (individualized assessment, notice, opportunity to respond) before rescinding offer.

Salary history bans prohibit employers from asking about or considering salary history in compensation decisions. Employers can consider salary expectations if applicant voluntarily discloses.

California Independent Contractor Classification

California's worker classification rules are among the strictest in the nation, making it much harder to classify workers as independent contractors.

ABC test (from Dynamex and codified in AB 5) presumes workers are employees unless employer proves all three: (A) worker is free from control and direction in performance of work, (B) work is outside usual course of business, and (C) worker is customarily engaged in independently established trade. The B prong is particularly difficult—if the work is part of the business's usual operations, the worker is an employee. This differs dramatically from federal and most state tests that weigh multiple factors.

Professional services exemptions exist for certain occupations (doctors, lawyers, architects, engineers, accountants, real estate agents, and others) who can still use the more flexible "Borello" test (weighing multiple factors). However, these exemptions are narrow and don't apply to most workers.

Misclassification penalties are severe. Employers face liability for unpaid wages, overtime, meal/rest break premiums, unpaid benefits, workers' compensation, unemployment insurance, and penalties. The Private Attorneys General Act (PAGA) allows employees to sue on behalf of the state for labor code violations, with 75% of penalties going to the state and 25% to employees.

California Workplace Safety

California operates its own OSHA program (Cal/OSHA) that is generally more protective than federal OSHA.

Cal/OSHA standards are often stricter than federal. California has specific standards for ergonomics, heat illness prevention, workplace violence prevention in healthcare, and other hazards not covered by federal OSHA.

Heat illness prevention requires employers in outdoor industries to provide water, shade, rest breaks, and training when temperatures exceed certain thresholds. High-heat procedures (temperatures above 95°F) require additional measures.

Injury and Illness Prevention Program (IIPP) is required for all employers. Employers must have written program identifying hazards, implementing controls, providing training, and maintaining records. The program must be site-specific and updated regularly.

Record-keeping and reporting requirements are similar to federal but with some differences. Cal/OSHA requires reporting serious injuries within 8 hours (similar to federal) and has additional reporting requirements for certain industries.

California Termination Requirements

At-will employment exists in California but is more limited than in many states. California recognizes implied contracts (employee handbooks, oral promises, length of service) that can modify at-will status. Employers should include clear at-will disclaimers in handbooks and employment documents.

Final pay timing is immediate upon termination (or within 72 hours if employee quits with 72 hours notice). Accrued vacation must be paid out. Waiting time penalties apply if final pay is late.

Mass layoff notice requirements (WARN Act) apply to employers with 75+ employees (lower than federal 100+) who lay off 50+ employees at single site. California requires 60 days notice (federal requires 60 days but applies to fewer situations).

Non-compete restrictions are largely unenforceable in California except in very limited circumstances (sale of business, dissolution of partnership). California's strong public policy against non-competes makes most restrictions void.

Severance agreements releasing age discrimination claims must comply with Older Workers Benefit Protection Act (federal) and California requirements. Employees must have 21 days to consider (45 days for group terminations) and 7 days to revoke.

Key California Thresholds and Differences

Minimum wage: $16.00 (26+ employees) or $15.50 (25 or fewer) for 2024, with many cities higher. Exempt salary minimum: $66,560 annually (2024). Daily overtime: 1.5x after 8 hours, 2x after 12 hours or 8 hours on 7th day. Meal breaks: required for shifts over 5 hours. Rest breaks: 10 minutes per 4 hours. CFRA coverage: 5+ employees. FEHA coverage: 5+ employees. Final pay: immediately upon termination. Wage statement penalties: $50-$100 per violation. Waiting time penalties: up to 30 days wages. PAGA penalties: $100-$200 per employee per pay period for initial violation, $200-$250 for subsequent violations.

Common California-Specific Misconceptions

"Federal rules apply in California" ignores that California often provides greater protections, and employers must comply with whichever is more protective. "Weekly overtime is enough" misses daily overtime requirements that create significant additional liability. "Meal breaks are optional" are mandatory with premium pay penalties for violations. "Independent contractors are fine if they agree" ignores ABC test that makes most classifications invalid regardless of agreement. "Small employers don't need to worry" ignores that many California requirements apply at 5+ employees, much lower than federal thresholds. "Non-competes are enforceable if reasonable" are largely void in California regardless of reasonableness. "Final pay can wait until next payday" must be immediate upon termination.

Cross-References

For federal employment law requirements that also apply in California, see US Employment Law Primer. For universal employment law concepts, see Employment Law Primer. For payroll and benefits administration in California context, see US HR Operations Primer (which covers California-specific payroll and benefits requirements).