Labor and Employment Law Overview: California

Labor and Employment Law Overview requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: XpertHR Editorial Team

Summary

  • State law prohibits an employer from discriminating and retaliating against employees in a variety of protected classes. See EEO, Diversity and Employee Relations.
  • California permits drug testing, but limits credit checks to certain positions. See Recruiting and Hiring.
  • In California, there are many requirements relating to the minimum wage, overtime, meal and rest breaks and child labor. See Wage and Hour.
  • California has a number of laws that relate to employee pay and benefits, including temporary disability, paid family leave, health care continuation and wage notice requirements. See Pay and Benefits.
  • Under California law, employees are entitled to a number of leaves including family and medical leave, pregnancy disability leave, domestic violence leave and time off for jury duty. See Attendance and Leave.
  • California law requires employers to provide a safe working environment for their employees. See Health and Safety.
  • Most California employers must comply with notification requirements before a plant closing or mass layoff. See Organizational Exit.

Introduction to Employment Law in California

California is considered one of the most employee-friendly states. Many consider it the state with the most proscriptive variances from federal law. A California employer must tread cautiously to ensure compliance with the complex and ever-changing employment laws in the state.

Select California employment requirements are summarized below to help an employer understand the range of employment laws affecting the employer-employee relationship in the state. An employer must comply with both federal and state law.

An employer must also comply with applicable municipal law obligations affecting the employment relationship, in addition to complying with state and federal requirements.

EEO, Diversity and Employee Relations

Key California requirements impacting EEO, diversity and employee relations are:

The California Fair Employment and Housing Act and Protected Classes

The Fair Employment and Housing Commission (FEHC) is the primary civil rights agency in the state. Among its responsibilities, FEHC is responsible for administering the California Fair Employment and Housing Act (FEHA). The FEHA provisions generally apply to most employers and offer one of the most extensive lists of protected classes in the country against which an employer is prohibited from discriminating, including:

  • Race, color and religion;
  • Sex (including pregnancy, childbirth, breastfeeding and related medical conditions);
  • Ancestry and national origin (includes language use restrictions);
  • Disability (mental and physical, including HIV and AIDS), genetic information and medical condition;
  • Age (age 40 and above);
  • Gender (including gender identity and expression) and sexual orientation; and
  • Marital status.

Harassment is a form of illegal discrimination and is prohibited under the FEHA.

The FEHA and the FEHC regulations also prohibit retaliation against a person who opposes, reports or assists another person in opposing unlawful discrimination.

Discrimination in Compensation - California Equal Pay Act

The California Equal Pay Act prohibits discrimination between the sexes in the payment of wages. Accordingly, male and female employees in the same classification who perform substantially the same quantity and quality of work are entitled to equal pay, unless pay differentials are based on bona fide factors other than sex, such as seniority or merit.

Whistleblower Protection

A California employer may not make, adopt or enforce any rule, regulation or policy preventing an employee from being a whistleblower. Also, an employer may not retaliate because an employee:

  • Is a whistleblower;
  • Refuses to participate in an activity that would result in a violation of a state or federal statute, or a violation or noncompliance with a state or federal rule or regulation; or
  • Exercises his or her rights as a whistleblower in any former employment.

A whistleblower is an employee who discloses information to a government or law enforcement agency where the employee has reasonable cause to believe that the information discloses:

  • A violation of a state or federal statute;
  • A violation or noncompliance with a state or federal rule or regulation; or
  • Unsafe working conditions or work practices in the employee's employment or place of employment.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on discrimination, harassment and whistleblower protection in California can be found in the California Handbook: Table of Contents, Disabilities (ADA): California, EEO - Discrimination: California, EEO - Harassment: California, Employee Discipline: California, California Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in California? Federal requirements can be found in Disabilities (ADA): Federal, EEO - Discrimination: Federal, EEO - Harassment: Federal and Employee Discipline: Federal.

Recruiting and Hiring

Key California requirements impacting recruiting and hiring are:

Drug Testing

Drug testing of job applicants is allowed in California, with certain restrictions (e.g., testing employees without suspicion) established by the courts. An employer should be aware that California has laws establishing certain protections for individuals who use marijuana for medical reasons.

Credit Checks

An employer may perform credit checks only for certain positions, (e.g. a law enforcement position). If an applicant is applying for a position for which a credit check is permitted, the employer must provide the applicant with notice that a credit check will be performed. Further, the employer must notify applicants of any adverse action taken on the basis of the credit check.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on recruiting and hiring practices related to background checks in California can be found in the California Handbook: Table of Contents, Preemployment Screening and Testing: California and Does This Law Apply to My Organization in California? Federal requirements can be found in Preemployment Screening and Testing: Federal.

Wage and Hour

Key California requirements impacting wages and hours are:

Minimum Wage

California's minimum wage is higher than the federal minimum wage. Currently, the state minimum wage is $10.00 per hour. Starting January 1, 2017, the minimum wage in California will vary depending on the size of the employer and increase to $15.00 per hour over the next six years.

Overtime

California law requires an employer to pay employees overtime for all hours worked in excess of 40 hours in a workweek. Under California law, an employer is also required to pay employees overtime when they work more than eight hours in a workday or work a seventh consecutive day in a workweek.

A California employer must pay overtime to nonexempt employees at the rate of one and one-half times the employee's regular rate of pay for all hours worked in excess of eight, and up to and including 12 hours in any workday and for the first eight hours of work on the seventh consecutive day of work in a workweek. An employer is further required to pay double the employee's regular rate of pay for all hours worked in excess of 12 in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.

Rest Breaks

A California employer must provide nonexempt employees with a paid 10-minute rest period for each four-hour work period. Rest periods must be given as close to the middle of the work period as is practicable. An employee is entitled to one hour of pay for each workday that the rest period is not authorized or permitted.

Meal Breaks

An employer in California must provide nonexempt employees with no less than a 30-minute meal period if they work more than five hours a day. A second meal period of no less than 30 minutes must be provided when the employee's work period is more than 10 hours. An employee is entitled to one hour of pay for each shift that the meal period is not provided.

Breastfeeding Breaks

A California employer must provide a reasonable amount of break time to accommodate an employee desiring to express breast milk for the employee's infant child. When possible, the break time should run concurrently with any break time already provided to the employee. Break time that does not run concurrently with the existing break time does not have to be paid. An employer is not required to provide an employee break time for lactation if doing so would seriously disrupt the operations of the employer.

A California employer must also make reasonable efforts to provide the employee with the use of a room or other location, other than a toilet stall, in close proximity to the employee's work area, for the employee to express milk in private.

Child Labor

Child labor laws in California restrict the occupations in which minors may be employed and the number of hours and times during which they may work. California also has many additional regulations that are specific to the entertainment industry.

For most occupations, California had adopted the federal standards into its own regulations. However, California's regulations also forbid minors under the age of 16 from working in many additional occupations. In fact, the prohibited occupations are so extensive and wide-ranging that an employer should consult with an attorney or with California's Department of Industrial Relations if the particular occupation in which it wishes to employ a minor is not expressly permitted.

California also has a complex set of requirements that govern the times during which minors may work. These requirements differ depending on the age of the minor, with separate working time restrictions set out for 16- and 17-year-olds, for 14- and 15-year-olds and for 12- and 13-year-olds.

California requires almost all minors to have a permit to work.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on wage and hour practices in California can be found in the California Handbook: Table of Contents, Minimum Wage: California, Overtime: California, Hours Worked: California, Child Labor: California, California Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in California? Federal requirements can be found in Minimum Wage: Federal, Overtime: Federal, Hours Worked: Federal and Child Labor: Federal.

Pay and Benefits

Key California requirements impacting pay and benefits are:

Temporary Disability Insurance

California's State Disability Insurance (SDI) program is a state-run plan administered by the Employment Development Department. SDI provides partial wage replacement to eligible workers who are unable to perform their regular or customary work due to a nonwork-related illness or injury, including pregnancy-related conditions.

The program is funded entirely by taxes withheld from employees' wages. An employer has the option of establishing a Voluntary Plan for the payment of disability insurance benefits to its employees in lieu of the mandatory state plan.

The SDI program also provides for paid family leave (PFL) under a Family Temporary Disability Insurance program. Eligible employees receive partial wage replacement when taking time off to care for a child, parent, spouse, registered domestic partner, grandparent, grandchild, sibling or parent-in-law.

Vacation

California law does not permit "use it or lose it" vacation policies. Vacation accruals may be capped, but may not be forfeited. Unused, accrued vacation must be paid out at the end of employment.

Cal-COBRA

The California Continuation Benefits Replacement Act (Cal-COBRA) requires employers and group health plans that cover from two to 19 employees to offer continuation coverage to qualified beneficiaries (employees and their dependents) upon a qualifying event. Cal-COBRA contains provisions for notice requirements, cost and length of coverage.

Cal-COBRA also has a provision that requires group health plans to offer up to 18 months of continuation coverage to individuals who exhaust their coverage under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) if they are entitled to less than 36 months of continuation coverage under COBRA.

Wage Notice Requirements

The Wage Theft Prevention Act requires an employer to provide notice of certain pay related information (e.g. the employee's rate of pay and the basis for such rate, the employer's regular pay period, the name of the employer, etc.), to nonexempt employees at the time of hire and any time the information changes.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on pay and benefit practices related to temporary disability, paid family leave, health care continuation and wage theft notices in California can be found in the California Handbook: Table of Contents, Insurance and Disability Benefits: California, Health Care Continuation (COBRA): California, Payment of Wages: California, California Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in California? Federal requirements can be found in Insurance and Disability Benefits: Federal, Health Care Continuation (COBRA): Federal and Payment of Wages: Federal.

Attendance and Leave

Key California requirements impacting attendance and leave are:

California Family Rights Act

The California Family Rights Act (CFRA) requires covered employers to provide eligible employees with job-protected leaves for qualifying reasons. While the CFRA and the federal Family and Medical Leave Act (FMLA) parallel each other to a large degree, there are areas in which they differ, such as whom an employee may take leave for, qualifying reasons for leave and what is considered a serious health condition. Accordingly, a California employer must look at both laws when making family and medical leave decisions.

Other Leave Laws Affecting California Employers

In addition to the CFRA, a California employer is also required to comply with more than a dozen other leave laws, such as:

  • Pregnancy disability leave (covering employers with five or more employees);
  • Kin care leave;
  • Family-School partnership leave (covering employers with 25 or more employees);
  • School-Required leave;
  • Paid sick and safe time;
  • Leave for organ and bone marrow donors (covering employers with 15 or more employees);
  • Leave for victims of domestic violence, sexual assault and stalking;
  • Crime victims' leave;
  • Election/Voting leave;
  • Leave for jury duty and appearance as a witness;
  • Emergency responder leave (covering all employers for emergency responder duties, and employers with 50 or more employees for emergency responder training);
  • Family military leave (covering employers with 25 or more employees);
  • Drug and alcohol rehabilitation leave (covering employers with 25 or more employees); and
  • Civil air patrol leave (covering employers with 15 or more employees).

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on attendance and leave practices in California can be found in the California Handbook: Table of Contents, FMLA: California, Jury Duty: California, Other Leaves: California, USERRA: California, California Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in California? Federal requirements can be found in FMLA: Federal, Jury Duty: Federal, Other Leaves: Federal and USERRA: Federal.

Health and Safety

Key California requirements impacting health and safety are:

California Occupational Safety and Health Act

California operates its job safety and health programs covering the private sector under a state plan approved by the Occupational Safety and Health Administration.

Under the California Occupational Safety and Health Act, a California employer must provide and maintain a safe and healthful workplace for employees and, to that end, is required to develop and maintain a written, effective Injury and Illness Prevention Program that includes, among other things, instruction on safe workplace practices.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on health and safety requirements in California can be found in the California Handbook: Table of Contents, HR and Workplace Safety: California, California Workplace Labor and Employment Law Posters and Does This Law Apply to My Organization in California? Federal requirements can be found in HR and Workplace Safety (OSHA Compliance): Federal.

Organizational Exit

The California Worker Adjustment and Retraining Notification Act (Cal-WARN Act) provides employees and their families time to prepare for a prospective job loss by requiring an employer to provide advance notice of a plant closing or mass layoff. While the state law is modeled after the federal Worker Adjustment and Retraining Notification Act (WARN Act), there are areas in which they differ, such as the definition of covered employer. In general, the Cal-WARN Act is more restrictive than the federal law.

Be aware that where there is overlap between federal, state and/or local law, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Additional information on organizational exit practices in California can be found in the California Handbook: Table of Contents, Involuntary Terminations: California and Does This Law Apply to My Organization in California? Federal requirements can be found in Involuntary Terminations: Federal.