Employment Laws In California

Working in an office today is an exciting topic. Businesses can use different models that fit their needs to run their organization, such as incorporating a hybrid or fully remote office model. Integrating a hybrid or fully remote office comes with challenges. In our previous article, we discuss the topics for handling this model, and you can learn more about setting expectations for remote and hybrid employees to manage a few of these challenges. This brings up another interesting discussion about understanding the laws of each state when dealing with employment. A state that stands out is California, with introduced new employment laws that took effect in 2023.

Does your work policy comply with California employment laws?

California has been known to have stringent employment laws to protect its workers. The pandemic has transformed employment laws, and it is necessary to learn the state’s employment regulations to ensure employee compliance. This is even more important for California workers, and you can learn more about these policies by visiting California’s Department of Industrial Relations website to learn more about their latest news.

At the beginning of 2023, California Legislature passed several new employment laws that will impact employers. Below are the new laws enacted with a brief excerpt explaining the update or change:

Minimum Wage and Salary Requirements: The California minimum wage increased to $15.50 for all employers, and exempt employees must earn an annual salary of at least $64,480. Some cities and counties may have higher local minimum wage rates.
Leaves of Absence: AB 1041 expanded leave options under the California Family Rights Act (CFRA) and Paid Sick Leave to include a “designated person” related to or associated with the employee. Employers can limit an employee to one designated person per 12-month period.
Bereavement Leave: AB 1949 ensures that employees employed for at least 30 days by employers with five or more workers are eligible for up to five days of bereavement leave upon the death of a family member. The leave can be paid or unpaid, depending on the existing policy.
Pay Transparency Requirements: SB 1162 requires employers to disclose more pay data and provide pay ranges to employees upon request and in job postings. Employers must maintain wage rate history records and submit pay data reports for employees. Failure to comply may result in civil penalties.
COVID-19 Notice Requirements: AB 2693 extends California’s COVID-19 notice requirements until January 1, 2024. Employers can provide notification of exposure by posting a notice in the workplace, including the location and dates of exposure. Employers must keep a log of the posted notices and provide written information to the exclusive representative, if any.
Workplace Safety Measures: SB 1044 prohibits adverse action against employees refusing to report to an unsafe workplace during an emergency condition. Employers must allow employees to access their mobile devices for emergency purposes. AB 2068 requires employers to post Cal/OSHA citations or special orders in multiple languages.
Contraceptive Equity Requirements: SB 523 prohibits employers from requiring employees to disclose information or discriminating based on reproductive health decision-making.
Mandated Retirement Plans: SB 1126 expands the eligibility criteria for the state-run retirement savings program (CalSavers) to include employers with at least one non-owner employee. Employers with five or more employees must have a payroll deposit savings arrangement for employee participation in CalSavers.
Privacy Rights: Proposition 24 (California Privacy Rights Act) added new privacy protections, eliminating exemptions for employment-related personal information. Employees now have the right to correct inaccurate personal data and limit the use of sensitive personal information collected by businesses.

A great resource about the new California employment laws passed as of February 2023 provided by Loeb & Loeb covers many of these areas in detail for employees to learn more about the policies. Employers employing California workers are encouraged to review any new policies to confirm compliance with any new California law.

The Importance of Being Compliant with California Employer Laws and Understanding the Violations.

As stated earlier, California employment laws are taken very seriously to protect workers in California. The Labor Enforcement Task Force (LETF) coalition was formed as a collaborative effort in California to combat labor law violations and promote compliance. It comprises multiple state agencies and departments that work together to protect workers’ rights and enforce labor laws. The LETF includes entities such as the Department of Industrial Relations, Employment Development Department, Division of Labor Standards Enforcement, and others.

The LETF is known to combat what is known as the “underground economy,” which refers to economic activities conducted outside the boundaries of legal regulations and official oversight. It encompasses a range of informal and illicit financial transactions not reported to the government for taxation or regulatory purposes. The underground economy operates outside the traditional framework of laws, regulations, and formal business structures.

Below are some examples of well-known violations that were already in place before 2023, which are taken seriously and how to avoid them:

Failure to pay minimum wage

California has its own minimum wage laws, which are higher than the federal minimum wage. Employers must ensure that all employees are paid at least the applicable minimum wage for each hour worked.

To avoid this violation, employers should regularly review and update their payroll systems to ensure compliance with California’s current minimum wage rates.

Unpaid overtime:

Non-exempt employees must be paid overtime wages for all hours worked beyond 40 hours in a workweek or 8 hours in a workday. Overtime pay should be calculated as 1.5 times the regular hourly rate.

To avoid unpaid overtime violations, employers should accurately track and record the hours worked by their employees and ensure that overtime wages are correctly calculated and paid.

Meal and rest break violations:

In California, employees are entitled to meal and rest breaks based on their work hours. Generally, employees are entitled to a 30-minute unpaid meal break after working for 5 hours and a 10-minute paid rest break for every 4 hours worked.

To avoid meal and rest breaks violations, employers should provide employees with the required intervals and ensure they are kept from taking them.

Misclassification of employees

Misclassifying employees as independent contractors is a common violation. California has strict criteria for determining whether someone should be classified as an employee or an independent contractor.

To avoid misclassification violations, employers should carefully review the nature of the work relationship and consult with legal counsel to ensure proper classification. They should also ensure compliance with tax and employment laws applicable to employees.

Failure to provide accurate wage statements:

Employers must provide itemized wage statements to employees that contain specific information, such as hours worked, rates of pay, and deductions.

To avoid violations related to wage statements, employers should ensure that the wage statements provided to employees are accurate and include all required information specified by California law.

Businesses that do not comply with these regulations may face several violations, which will be enforced until the correction is made. The LETF provides a collection of resources for businesses working with California employees. The document “All workers have right in California” is also an excellent place to start to see the latest updates on California employment policies. You can learn more about The Labor Enforcement Task Force (LETF) by visiting the Department of Industrial Relations website.

Our Partners