California Labor Laws Guide

California wage laws

First on our list are regulations concerning wages.

We’ll begin by breaking down the minimum wage requirements and exceptions, and then explaining the specifics of California Reporting Time Pay Law — as well as what constitutes a Split Shift Premium.

Minimum wage in California

The state of California does not rely on the Federal Minimum Wage, and uses its own state legislation to place restrictions around minimum employee earnings.

As of January 2022, the minimum wage in California for employers employing more than 25 workers is $15 per hour.

For employers with 25 or fewer employees, the minimum wage is $14 per hour, and is scheduled to be increased to $15 per hour starting January 1, 2023.

Let’s also take a look at how California regulates its tipped minimum wage, as well as local minimum wages set by California municipalities.

California tipped minimum wage 

The US Department of Labor defines a tipped employee as someone who “engages in an occupation in which he or she customarily and regularly receives more than $30 per month in tips.”

As such, many states allow employers to pay their tipped workers a special, reduced minimum wage, which cannot be lower than the federally prescribed amount of $2.13. 

This is not the case in California, as it does not allow employers to pay their tipped employees at a rate lower than minimum wage.

Employees are also entitled to the full amount of their earned tips.

In other words, the regular minimum wage still applies to tipped employees in California — $14 for employers with up to 25 employees, $15 for places employing more workers.

Food delivery tips in California

California is the first state to pass legislation concerning food delivery businesses, and their transparency around tipping.

Passed in October 2021, the Assembly Bill 286 prohibits an online food delivery platform from retaining any amount designated as a tip or gratuity.

That is to say, the food delivery platform is required to pay out the entire amount of a tip to the person delivering the food or beverages, or to the food facility in case of a pickup order.

Local minimum wages in California

Municipal authorities can decide to place their own requirements for specific local minimum wages, which cannot be lower than the state-mandated ones. 

In cases where there are overlapping requirements for federal, state, and local minimum wage requirements, the employer is required to follow the strictest of the applicable standards, and the one most beneficial to the employee.

In other words, employee wages are calculated according to the highest applicable rates.

Here, we have a list of all California municipalities which employ special local minimum wage rates.

Keep in mind these rates are subject to change, and you should always check and confirm this piece of information with the local authorities.

Exceptions to minimum wage in California

An employee cannot legally agree to work for less than minimum wage, unless they belong to a particular category which is exempt from this requirement.

In California, exemptions to minimum wage law apply to:

• Outside salespersons
• Employee who is the spouse, parent, or child of the employer
• Apprentices indentured with respect to California Division of Apprenticeship Standards (DAS)

Additional cases — which are still subject to the minimum wage law but provide specific exceptions to minimum wage rates — include the following:

• Physically or mentally disabled employees, and nonprofit organizations that employ disabled employees (sheltered workshops) — In order to pay special wage rates, these organizations must apply for a license with the California Division of Labor Standards Enforcement. The subminimum wage paid to disabled employees must be commensurate with their productivity as compared to non-disabled employees doing the same type of work. This exception is scheduled to be phased out — more information coming in the next heading.
• Learner-employees during their first 160 hours of work in occupations where they have no previous experience — Here, employers are allowed to pay learners a rate that amounts to 85% of the minimum wage. In California, this amounts to $11.9 for establishments employing 25 or fewer employees, or $12.75 in companies hiring 26 or more employees..

Subminimum wage in California

As previously stated, the current law allows employers with special certificates to pay employees with disabilities a subminimum wage.

However, the recently passed Californian Senate Bill 639 requires that the subminimum wage be phased out by January 1, 2025.

This means that no employers will be allowed to pay employees with disabilities at rates lower than minimum wage.

Wages and Reporting Time Pay in California

In brief, California law acknowledges that “reporting time pay constitutes wages”. 

This means that employers are required to pay out the employee if they’ve:

• Physically appeared at the place of work in time for the beginning of the shift,
• Logged on to their computer if working remotely,
• Appeared at a client’s job site,
• Set out on a trucking route, or
• Telephoned the store two hours prior to the shift.

Exceptions and exemptions to this rule apply in cases when there are imminent threats of violence, failures of public utilities, or weather emergencies.

Wages and Split Shift Premium in California

According to the California Department of Industrial Relations, employees working a split shift are entitled to a premium equal to one hour of pay at the state or local minimum wage rate.

This payment should appear as a separate item on the pay stub, and it’s the employer’s responsibility to keep track of any split shifts. 

To qualify for the premium, the following conditions must be met:

• The work schedule must be interrupted with non-paid and non-working hours longer than a bona fide meal break, within a single workday.
• This interruption must be established by the employer. Voluntarily picking up an extra shift or requesting a break for their own convenience does not qualify the employee for the premium.
• The employee does not reside at their place of employment.

Additionally, employees earning more than the minimum wage can also be eligible for a split shift premium. 

However, the higher their wage — the lower the premium will be. 

California payment laws

In most circumstances, California mandates that employers be paid at least two times per calendar month on regular paydays.

It is the duty of employers to set these paydays in advance, and to provide details on when, where, and how the compensation will be paid.

There are also requirements as to when the wages for particular pay periods will be paid, listed in the following table:

California overtime laws

For all nonexempt employees, overtime in California constitutes any additional hours worked over the limit of 8 hours in a workday, 40 hours inside a workweek, or six days in a workweek.

The employer is required to pay the employee’s overtime work at the following rates:

• One and a half times the regular rate of pay — This rate applies to all hours worked in excess of 8 hours, and up to and including 12 hours in a workday. Additionally, the same rate is used to calculate wages for the first 8 hours worked on the seventh consecutive day of work in a workweek.
• Double the regular rate of pay — Paid out for all hours worked in excess of 12 hours inside a workday, and all hours worked in excess of 8 hours on the seventh consecutive workday in a workweek.

Under California legislation, all overtime hours must be paid, whether authorized or not.

This is the case because the law holds that the employer is responsible for keeping track of all overtime hours worked, and should be aware of the employee’s activities.

However, the employee is prohibited from undertaking unauthorized overtime work, hiding this information from the employer, and then claiming recovery.

Overtime exceptions and exemptions in California

California recognizes many cases where overtime provisions are calculated on a basis different than the state standard, or cases where they do not apply at all.

In the first case scenario — where non-standard calculations are used — these are what we call overtime exceptions.

These exceptions may apply to the following categories of employees:

• Employees working on an alternative workweek schedule
• Employees within the health industry, working on an alternative workweek schedule
• Employees working in hospitals and care centers with patients residing on the premises
• Camp counselors
• Personal attendants employed by a nonprofit organization
• Resident managers in retirement homes with less than 8 beds
• Employees providing 24-hour residential care for minors
• Ambulance drivers or attendants
• Employees in ski establishments
• Live-in employees

The other important category — the exemptions — include employee cases and occupations where overtime provisions are not guaranteed.

Some of the employee categories included on this list are:

• Executive, administrative, and professional employees
• Employees in the computer software industry
• Employees of the State and any of its political subdivisions
• Outside salespersons
• Individuals who are the spouse, child, or parent of the employer
• Drivers
• Taxicab drivers
• Airline employees

California break laws

Employees in California are entitled to a rest period during work hours.

This rest period is calculated based on the total number of hours worked each day and must be at least ten minutes long for each 4 hours worked, or if the employee has worked for a major fraction (more than 2 hours) of the 4 hour period. 

All rest periods are considered working time, so employers are required to pay for them at regular rates.

The rest period is calculated from the moment the employee reaches the designated rest area, and should be taken as close to the middle of working hours as possible.

Additionally, employers must provide adequate resting facilities for employees, and these must be in areas separate from toilet rooms.

California meal break law

California employment laws include a right to a 30 minute meal break after five consecutive hours of work.

This is only a requirement if the total number of hours worked in a day is more than six. In this case the meal break can be skipped upon mutual agreement between the employer and employee.

If the number of hours worked exceeds 10, the employee is entitled to a second meal break.

This meal break can only be waived if the total number of hours worked does not exceed 12, and there is, again, an agreement between the employer and the employee.

If the employee is not relieved of all duties and/or required to stay on the work site — the meal break must be paid in total. 

Meal break penalty California

If the employer does not provide the employee with the adequate meal breaks, they need to pay a meal penalty.

For each day the employee did not have a meal break, the employer must pay one additional hour at the regular pay rate.

Exceptions to break laws in California

Some exceptions also apply when it comes to resting periods. 

Here are some of the occupations and situations where non-standard rules are applied to breaks: 

• Employees whose total work time inside a workday is less than three and a half hours are not required to have a break.
• Employees working in residential care facilities may have their rest period limited.
• Dancers, skaters, swimmers, and other performers who do strenuous work are entitled to additional rest periods.
• Construction workers may have their rest periods staggered by the employer, so as not to interfere with the workflow.
• Crew members of commercial fishing boats need to have at least 8 hours resting time during an overnight trip.

California breastfeeding laws

When it comes to lactation accommodation, all employers are required to provide breaks for employees looking to express breast milk.

Additionally, the employer needs to provide a hygienic area and a reasonable amount of time for this activity.

If it is possible to do so, the employee should take their lactation break in accordance with break periods already provided by the employer.

However, if this is not a possibility, the employer is not required to pay for the lactation break.

If the employee suffers any violation of this regulation, they can file a complaint with the Bureau of Field Enforcement (BOFE), who can then issue a citation for $100 for each day the employee was denied adequate room and time to express milk.

California Day of Rest law

In 2017, one Nordstrom, Inc. employee filed a lawsuit against their employer, accusing them of illegally scheduling more than six out of seven days a week of work.

Following this, the Supreme Court issued a clarification to the Labor Code, where they explain that the prohibition of working more than 6 consecutive days is to be calculated according to the employer’s workweek.

This effectively means that working 7 days in a row in California can be legal. In fact, the worker can be scheduled to work for up to 12 consecutive days, if the rest days are scheduled on the first day of week one and the last day of the following workweek.

California leave requirements

Here is some information about the types of leaves that employers in California are and are not required to provide.

California required leave

First off, we have the required types of leave.

Family and medical leave 

The leave covered by the Family and Medical Leave Act (FMLA) guarantees certain employees the right to 12 weeks of unpaid, job-protected leave per year. 

Employees may be eligible for this type of leave in cases when:

• The employee has given birth and is taking care of a newborn child.
• The employee has adopted a child or taken one into foster care.
• The employee needs to take care of a member of their immediate family due to a serious health condition.
• The employee has a serious health condition that renders them incapable of work.

Sick leave  

Employers must give sick leave to all employees who have worked for them for more than 30 days, to care for themselves or a close kin.

The sick leave is accrued at a rate of one hour for 30 hours worked, and can be carried over from one year to the next (can be capped at 48 hours).

Jury duty leave

The employer must allow their employee to be absent from work on days when they need to attend jury duty, though the leave does not have to be paid.

Voting time leave

Employers need to provide at least 2 hours time for employees to vote, after receiving the employee’s notice 3 days in advance.

Domestic violence or sexual assault leave

Victims of domestic violence or sexual assault can request to take the time off necessary in order to protect themself and their children.

Employers with 25 or more employees also need to provide time off for medical examinations, or other domestic violence and sexual assault care services.

Emergency response leave

If the employee needs to attend emergency duties as a volunteer firefighter, rescue personnel, or as a peace officer, the employer has to give them unpaid leave.

Additionally, employers hiring 50 or more employees need to provide up to 14 days of unpaid leave for employees looking to acquire training in these occupations.

Organ and bone donation leave

Employers must provide up to 60 days a year to employees requesting bone marrow or organ donation leave.

The first 30 business days must be paid, and the following 30 can be unpaid.

Additionally, the employer may request that the employee uses up to 5 days of their accrued paid time off inside their bone marrow donation leave, and 15 days off for organ donation leave.

School leave

Employers are required to allow employees to take unpaid time off to attend the disciplinary meetings or hearings of their school-age children.

The employee is also entitled to up to 40 hours of time off inside a calendar year for general school involvement activities for their children.

Military leave

Employers are required to provide leaves to active service members of the Armed Forces for the duration of their deployment, as well as the same conditions of employment once they return.

For members of the National Guard or the Naval Militia, employers must provide 17 days of unpaid leave, and 15 days for members of the state military reserve.

Additionally, larger companies (25+ employees) must provide the spouse of a military service member with 10 days of unpaid leave while their spouse is on leave from deployment.

California non-required leave

On the other hand, the employer is not required to provide leave in the following cases.

Bereavement leave

There are no requirements for employers when it comes to employee bereavement leave.

Vacation time 

Employers are not legally required to provide vacation time. However, if their company policy promises such benefits, employers need to pay their workers any unused vacation time.

Holiday leave

Employers are not required to give employees any holiday time off.

California child labor laws

In order to be able to work in California, minors have to acquire an Employment Certificate, otherwise known as a Work Permit. 

These are issued by the California Department of Labor, or the school these minors attend. 

The exception to this is minors working in entertainment, who can only get their certificate through the state Labor Department.

There are also restrictions that apply to minors when it comes to work hours and night work. These restrictions are different for two age groups: minors under 16 and minors aged 16 or 17.

Labor laws for minors under 16 years of age

Minors younger than 16 years can work up to 8 hours a day, 48 hours per week, or 6 days per week when school is not in session. 

While the school's in session, this age group is restricted to 3 hours of work per school day, or 18 hours per week.

For the time period ranging from 9 p.m. June 1 through Labor Day, work is prohibited from 7 p.m. to 7 a.m.

Labor laws for minors aged 16 and 17

For minors aged 16 and 17, up to 8 hours of work per day, 48 hours per week, a maximum of 6 days are allowed in a week while school is out of session. 

For the duration of a school week, these minors can work 4 hours per day and a combined time of 28 hours for work and school activities per week.

Work is prohibited during the following hours: 10 p.m. (or 12.30 a.m. before non-school day) to 5 a.m.

Prohibited occupations for minors in California

California has adopted all federal regulations concerned with protecting minors from working in hazardous environments.

These regulations forbid employers from hiring minors for some of the following occupations:

• Handling explosives
• Operating a motor vehicle
• Mining
• Quarrying
• Logging
• Operating a circular or band saw, or guillotine shears
• Operating power-driven machinery

Hiring laws in California

As per regulations under the California Fair Employment and Housing Act (FEHA), employers are prohibited from discriminating against employees on the basis of any of the following characteristics:

• Race (including hair texture, protective hairstyles, and other race-related characteristics)
• Religion, race, and ethnicity; national origin and ancestry
• Physical or mental impairments
• Medical problems
• Information on the human genome
• Relationship status
• Pregnancy (including childbirth and related medical issues)
• Age
• Sex (including breastfeeding and related conditions)
• Sexual orientation
• Gender identity/expression
• Military service status

The FEHA prohibits any harassment and retaliation against people who report discrimination on any of these accounts.

Cal-COBRA laws

The Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) is a law allowing employees and their families the ability to continue group health benefits once they lose employer-sponsored coverage.

This law provides temporary health coverage (18-36 months), under circumstances of voluntary or involuntary job loss, a reduction in job hours, transition in jobs, divorce, death in the family, or other major life events.

In California, Cal-COBRA additionally extends the period of health coverage to 36 months, if the employee federal coverage was 18 months.

Termination laws in California

California is one of the states that employs an “at-will employment” approach.

This means that neither the employer nor the employee need to provide particular reasoning for terminating the employment relationship.

Concerning termination regulations, California has rules around paying out the final paycheck, as well as a recently mandated mass layoff notification act. 

So, here’s some more information on these coming up.

Final paycheck in California

Upon termination, the employer is required to pay the employee their final wage immediately, if the employee has provided at least 72 hours notice of the intent to terminate. 

If the employee provided the termination notice within less than 72 hours of resignation, the employer should pay the final wage within 72 hours of the moment of employment termination.

Any accrued, unused vacation time also has to be paid out at the end of employment.

Mass layoff notification in California

California uses the Worker Adjustment and Retraining Notification (WARN) Act to protect employees, their families, and communities by requiring employers to notify affected employees and other state and local representatives 60 days before a plant closure or mass layoff.

This requirement applies to employers with 75 or more full-time or part-time employees, and employees who have worked for at least six of the 12 months preceding the required notice date.

Additionally necessitating notice are cases when a plant closes, plans a layoff, or relocation of 50 or more employees in less than 30 days, regardless of the percentage of the workforce.

Occupational safety in California

The standards working on providing safe working conditions for California employees are regulated by the California Division of Occupational Safety and Health (DOSH).

To prevent injuries and illnesses resulting from work hazards, the Cal / OSHA conducts on-site investigations.

The employee has every right to refuse to work under hazardous conditions, and can report any violations to appropriate authorities.

Miscellaneous California labor laws

Here we can list some of the miscellaneous labor laws in California, which do not strictly fit into the previously explored categories.

In particular, we will mention the following regulations:

• California Warehouse Quotas law
• COVID-19 exposure act
• COVID-19 vaccination order for healthcare workers
• California whistleblower protection laws
• California background check laws
• Employer use of social media regulations
• The Employee monitoring law
• Drug and alcohol testing laws
• Sexual harrassment training laws
• The “Silenced-No-More” Act
• Cal-COBRA laws
• Expense reimbursement laws
• Record-keeping laws

California Warehouse Quotas law

California’s Warehouse Quotas law limits the quotas warehouse distribution center employers can place on their employees.

A single distribution center hiring 100+ employees, or 1000+ employees at several locations has to comply with this law as of January 1, 2022. 

A quota is considered illegal and employees may pursue legal action against the employer requesting it if:

• It prevents employees from using meal or rest breaks. 
• It prevents employees from using bathroom facilities.
• It prevents employees from being in compliance with occupational health and safety standards.

Employees who believe the quotas their employers are mandating are violating their rights can file a report of a labor law violation with the California Department of Industrial Relations.

Whistleblower protection laws

When employees have reason to believe their employer is violating a state or federal statute, the California Whistleblower Protection Act encourages them to notify appropriate authorities.

These authorities might be:

• A law enforcement agency
• A person with authority over the employee
• Another employee with authority to investigate, discover, or correct the violation or noncompliance

State officials and employers are banned under this act from retaliating in any way against the employee filing complaints.

Independent contractor ABC test

California recognizes what is called an ABC test, used to determine whether a worker is considered an employee or an independent contractor.

A worker is considered an independent contractor only if the following conditions are met:

• While performing their work activities, they are free from control and direction by the hiring entity, both in terms of the contract and in fact.
• The worker performs a type of work that is outside the usual course of the hiring entity’s business.
• The worker customarily engages in an independently established trade, occupation, or business of the same or similar type to the work being performed.

Misclassification of independent contractors carries penalties and damages, and employers may be required to pay $5.000 to $25.000 for each violation.

Background check laws

In California, ban the box law regulating background checks by employers took effect in 2018. 

This law applies to all employers with 5 or more employees, and it forbids them from asking job applicants about their criminal history before making the offer.

Additionally, once the job offer has been made, it cannot be rescinded without a written report only because of gaining knowledge about the applicant’s criminal past.

Exceptions to this law apply for:

• All community care license applicants
• Community care licensees
• Adult residents of community care facilities
• Volunteers and employees of community care facilities who have contact with clients

People with convictions more serious than a minor traffic violation cannot work or be present at community care facilities, unless they receive an exemption from the Care Provider Management Bureau (CPMB).

Employer use of social media

According to a law regulating the employer use of social media, California employers cannot request employees or job applicants to provide information that would allow them to access the worker’s private social media accounts.

Additionally, an employer cannot threaten, discipline, discharge, or retaliate against an employee who does not comply with this kind of request.

Employee monitoring law

According to a Senate BIll in effect since 2004, electronic monitoring of California employees without a court order is prohibited and constitutes a misdemeanor. 

Without prior notice, the employer can legally electronically monitor the employee only if they suspect unlawful conduct, of which the electronic monitoring would provide evidence.

Drug and alcohol testing laws

California allows the administration of drug and alcohol testing.

However, the circumstances and necessity justifications are clearly defined and are the following:

• Testing a job applicant, during the hiring process
• Testing upon reasonable suspicion
• Testing after a serious injury
• Testing employees and operators engaged in commercial transportation
• Testing an employee enrolled in a drug or alcohol rehabilitation program

Sexual harassment prevention training 

The Department of Fair Employment and Housing requires all California employers with 5 or more employees to provide sexual harassment prevention training.

At least one hour of sexual harassment and abusive conduct prevention is required for non-supervising employees, and at least two hours for supervisors and managers, once every two years.

The training needs to include practical examples based on gender identity and expression, as well as sexual orientation.

Silenced No More Act

California’s Silenced No More Act prohibits separation agreements that would ban the disclosure of information of illegal workplace activities concerned with:

• Sexual assault
• Sexual harassment
• Sex-based harassment
• Sex-based discrimination
• Retaliation against reporting violations concerning these kinds of matters

This law effectively banned confidential settlement agreements in sex-based claims. 

Expense reimbursements law

Under the section on employee obligations, California Labor Code deals with employee reimbursements.

It states that the employer must pay out all the necessary expenditures and losses an employee may incur while attending to their work duties.

In other words, the employer is responsible for all costs an employee needs to endure for their work, including:

• Travel expenses
• Using a personal phone for business purposes
• Conference fees
• Cost of a work uniform
• Entertaining business associates
• Driving costs, mileage reimbursements and tolls included
• Postage
• Training and education fees 

Record keeping laws

In effect since January 1, 2022, Senate Bill No. 807 requires employers to keep job applicant personal information for 4 years (the previous requirement was 3 years).

Personal records that fall into this category can be used to determine an employee’s qualifications for promotion, additional compensations, disciplinary action, or termination.

Some examples of personal records employers should keep include:

• The employment application
• Payroll authorization form
• All types of notices, including absence, vacation, education, warnings, termination, etc.
• Performance reviews
• Attendance records

Conclusion/Disclaimer

We hope this California labor laws guide has been helpful. We advise you to make sure you’ve paid attention to the links we’ve provided, as most of them will lead you to the official websites and other relevant information.

Please note that this guide was written in Q1 2022, so any changes in the labor laws that were included later than that may not be included in this California labor laws guide. 

We strongly advise you to consult with the appropriate institutions and/or certified representatives before acting on any legal matters. 

Clockify is not responsible for any losses or risks incurred, should this guide be used without further guidance from legal or tax advisors.