California Labor Laws

California labor laws are put in place to protect you. The California labor employment law and the California prevailing wage law ensures that your employer does not violate wage and hour issues.  Although California boasts some of the strictest state labor laws in the country with stiff penalties for violations, California labor lawsuits are on the rise: The most common issues are misclassified workers such as rideshare drivers and other gig economy workers; and wage and hour violations such as overtime.

 

An increasing number of employees in all kinds of professions find themselves working longer hours without overtime, from IT to domestic workers. Perhaps they have been discriminated against when layoffs occur, or overlooked for bonuses or promotion.

California has unique state overtime pay laws that protect employees from working extensive hours. With differences between state labor law and federal regulations on overtime pay, employers (sometimes accidentally) often misclassify employees. Some employees classify hourly employees as exempt to avoid paying overtime wages and therefore violate California labor laws.

If you believe you have been the victim of unfair employment practices, there are remedies available to you. The majority of California labor lawsuits are being filed over the following issues:

Minimum Wage
Overtime
Meal and Rest Breaks
Misclassification
Donning and Doffing

Wrongful Termination
Harassment
Discrimination

The California Labor Commissioner's Office under SB 588 and AB 970 has the power to collect back wages and penalties from employers who fail to pay minimum wage and overtime, force employees to work off the clock, refuse to offer meal and rest breaks, make illegal paycheck deductions and more California labor code violations.

Minimum Wage

As of 2021, California’s minimum wage is  $14.00 per hour (or $13.00 per hour for employers with 25 or fewer employees). However, some cities in California have chosen to increase that amount and employees cannot agree to be paid less than the minimum wage. 

This increase can also affect exempt employees, including salaried employees, such as retail managers and assistant managers, and commissioned salespeople. Most of the California wage exemptions require that exempt employees earn a monthly salary equivalent to no less than two (2) times the state minimum wage. As of January 1, 2021, the minimum annual salary to qualify for an exempt employee would be $58,240 (Double the state minimum wage $14.00/hour for employers with 26 or more employees). For employers with 25 or fewer employees, the minimum annual salary would be $54,080. By 2023, in keeping with minimum wage increases, the amount will rise to $66,560 from $58,240 and $62,400 from $54,080.

Employers should undertake a compensation review of their exempt employees to ensure compliance with updated California labor law requirements.

Liquidated Damages

An employer who fails to pay the new minimum wage will be required to pay liquidated damages to the employees in addition to the existing penalties. “Liquidated damages” is financial compensation awarded to an employee for a loss or injury resulting from the employer’s failure to pay the minimum wage.

Meal and Rest Breaks

The California Labor Code § 226.7 prohibits employers from requiring employees to work during meal or rest periods. Employees can sue for violations of California meal and rest break provisions going back a period of three years. In addition, it is likely that employees would be able to go back a total of four years under unfair competition laws.


• Employees who work more than five hours per shift are required to receive a 30-minute break.

• During a 10-hour workday, an employee is required to receive two 30-minute breaks.

• If the workday is no more than six hours, the meal break may be waived by mutual consent of both the employer and employee.

• During more than 10 hours a day, a second meal period of not less than 30 minutes is required. If the total of hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and employee only if the first meal period was not waived.
 

• Non-exempt workers receive a 10-minute paid rest period for every four hours worked.

Individuals employed in agriculture and outdoor work such as landscaping and farming are legally entitled to sufficient rest breaks (minimum five minutes in the shade, on an “as needed” basis) when temperatures exceed 85 degrees Fahrenheit. This new law applies to everyone, including illegal immigrants, who have a number of rights and protections under Bill 263.

Donning and Doffing 

Putting on and taking off protective gear, including personal protective equipment such as PPE during COVID-19, is called donning and doffing. It is required by some industries and companies to prevent the risk of injury or illness on the job. Some employees need to don and doff during breaks as well as starting and ending their shifts. Donning and Doffing lawsuits claim that employees should be paid for the time spent donning and doffing.

Similar lawsuits are being filed when employees are required to carry out tasks prior to starting their shift or after ending it, such as cleaning work equipment, logging into computer systems, or undergoing security checks. Lawsuits claim that employers who engage in these practices benefit from this time and should pay for it, which usually constitutes overtime pay.

Wage and Hour Penalties

If an employee does not receive the proper meal and rest periods, including “recovery periods” or “cool down period afforded an employee to prevent heat illness,” the employer must pay to the employee one hour of pay as a penalty. Employers are advised to review California OSHA recommendations to preventing heat illness.

Employers owe a penalty of one hour of pay at the employee’s regular rate for every workday in which a meal break is not provided – same rule applies for rest breaks. For instance, if you work an eight-hour shift without meal and rest breaks you are entitled to receive one hour for the missed meal period and one hour for the missed rest breaks.

If your final paycheck is late or it doesn’t include all wages and vacation pay (and maybe overtime) you’re owed, you can collect waiting time penalties. For every day your employer makes you wait, you are entitled a full day of wages at your regular rate, up to a maximum of 30 days. For instance, if you earn $90 per day, and your employer is ten days late with your check, you can collect $900 in waiting time penalties.

California Overtime and Misclassification

California Overtime laws require non-exempt employees be paid one-and-one-half times their regular rate of pay for any hours worked over eight in a day or 40 in a week. Furthermore, non-exempt employees should be paid two times their regular rate of pay for hours worked over 12 in a day or over eight on the seventh day of a workweek. 

According to California labor law, overtime pay is based on hourly wages, salaries, shift differentials, non-discretionary bonuses and commissions. Failure to include those when determining overtime pay is an overtime bonus violation. 

If you are an hourly employee, you have the right to overtime pay that independent contractors may not have. Unfortunately, some employers misclassify their employees as exempt from overtime, either due to a lack of understanding of the exemptions or to save money. For example, retail employees who have the title of assistant manager or manager may spend more than 50 percent of their time doing non-managerial work, such as cleaning or stocking shelves. If that person is not being paid overtime the employer is violating California’s Labor Code.

ABC Test

In 2018 the California Supreme Court adopted the “ABC Test” for determining whether an individual is an employee or independent contractor.  First, there is a presumption that the worker is an employee. The burden is on the hiring entity to establish that the worker is an independent contractor who was not intended to be included within the wage order's coverage.

The ABC test requires a company to clear three hurdles to determine workers as independent contractors and disprove employment status:

1. The worker is free from the control of the hiring entity in connection with work performance – both under the performance contract and in fact;
2. The worker performs work outside the hiring entity’s usual business;
3. The worker is customarily engaged in an independent business of the same nature as the work performed.

For instance, it is not enough to simply give someone a job title with the word “administrative” in it to exempt that person from overtime. The employee must be involved in administrative job duties to be exempt. 

Domestic Work Employees 

Under the Domestic Worker Bill of Rights domestic workers are entitled to the minimum wage, with the exception of babysitters under the age of 18 and the employer’s parent, spouse, or child. The Labor Commissioner may enforce local minimum wage laws if the work is performed in a city and/or county that has a higher minimum wage ordinance.

Bill AB 241 provides for specific overtime pay for certain in-home employees; i.e., “domestic work employee who is a personal attendant.” In-home care givers and individuals who require in-home care should study AB 241 to determine whether this law applies to them because it includes specific definitions and exclusions.

Outdoor Workers, Including Illegal Immigrants

Bill No. 263 prohibits an employer from engaging in "unfair immigration-related practices" when an employee asserts protected rights under the Labor Code. For instance, if you are an illegal immigrant and complain to your employer that you are not receiving minimum wage ($14 per hour, see above), your employer cannot threaten to report you to immigration authorities.

An employer may neither request additional immigration documentation, use E-Verify when not authorized, threaten to file or filing a false police report, nor threaten to contact or contact immigration authorities.

The state of California can suspend or revoke an employer's business license if the employer reports, or threatens to report, the immigration status of a current or former employee, or an employee' family member;  and/or if an employee makes a complaint about employment issues.

An employer who violates the California labor laws is liable for a civil penalty up to $10,000 per employee for each violation. Here is a list of laws that prohibit retaliation and discrimination.

California Tip Pooling

Employees who work in restaurants or other industries that typically receive tips must still be paid the minimum wage without factoring in the tips. Employers cannot use tips as a credit towards the minimum wage (minimum $14 per hour or more, depending upon location--see above). Further, they cannot take wage deductions or credit card processing fees from tips.

An employer is prohibited from sharing or keeping any portion of a tip left for an employee by a customer. Any tip that is left behind is the property of the employee or employees they were left for. This allows employers to enforce tip pooling with other employees—such as busboys—but does not allow managers, owners or supervisors to share in that tip pool. 

California Wage Theft Protection Act 

Employers can now be subject to stop-work orders, levies against their bank accounts and liens against their property. Employers, as well as owners, directors or managing agents acting on behalf of an employer, can be subject to criminal and personal liability. Previously, companies could avoid judgments by changing names. Now successor companies will be deemed liable if they engage in substantially the same work.

California's Wage Theft Protection Act of 2011 (Assembly Bill 469) requires employers to provide all employees with written notice of information at the time the employees are hired. Information given to the employee includes the rate of pay and how pay is determined, any allowances, regular paydays, employer's name, physical address of main office or principal place of business, employer's telephone number, contact information of the worker compensation insurance carrier and other information as deemed necessary by the California Labor Commissioner’s Office.

California Prevailing Wage

California construction projects—such as highway improvements, school construction or repair, work on city or county buildings, or bridge construction—are often paid for with public funds. California workers who provide labor for California public works projects or for California public improvements that exceed $1,000 in cost are entitled to receive wages at the prevailing rate—or “prevailing wage.” California public works projects include those that are federally funded.

The prevailing wage rate for any publicly funded construction project is based on the basic hourly rate that a majority of workers who are engaged in similar work within the nearest labor market area are receiving. Public works laborers must be paid based on what the prevailing wage for their specific job is determined to be.

Because government contracts for public improvements are highly sought after, some bidders seek to submit lower bids by lowering wage rates. California prevailing wage laws require that all bidders on a public works contract must submit bids based on the same cost of labor—i.e., no bidder can use a lower wage rate in an attempt to "win"a contract. Prevailing wage law ensures that work performed by the winning bidder on a public works contract is paid for according to the set prevailing wage rates. California prevailing wage includes not only the hourly rate of pay but also designated rates for overtime and holiday pay.

If a public works project in California is federally funded, the California state prevailing wage rate is used if that rate is higher, and if the project is controlled or carried out by a California awarding body.

Wrongful Termination

California Wrongful Termination means that an employee in California has been fired or laid off for reasons that violate the employee's legal rights. Even though California is an "at-will" state, there are situations in which the firing of an employee could be considered wrongful termination, and remedies are available.  Laws protecting employees from wrongful termination are covered in the California Fair Employment and Housing Act. 

Compliance

California employers are subject to many laws that protect the rights of employees and ensure employees are aware of their rights and their employer's responsibilities. Employers who break those laws could face fines and regulatory actions as well as lawsuits from their employee. 

As well as wage and hour laws, California employment laws also cover drug and alcohol testing, workers' compensation, employee termination, information provided on pay stubs, proper pay records, calculating travel time for employees, and mass layoff notices. Depending upon the size of the workplace, these regulations may change.

Some employers unknowingly make mistakes regarding their employees while others violate the law on purpose. In either case, employees are denied the rights and protections they are entitled to. Such situations can result in employees filing lawsuits against their employers.

California Sexual Harassment and Discrimination Law

SB 292 amends the definition of harassment. This law states that sexually harassing conduct does not need to be motivated by sexual desire. Further, hostile treatment can amount to unlawful sexual harassment regardless of whether the treatment was motivated by any sexual desire.  The law states that employers may not take adverse employment action against a victim of domestic violence or sexual assault when they take time off from work to attend to related issues. Law SB 400 includes protections to victims of stalking. 

A hostile work environment includes harassing behavior so severe and pervasive that it creates an intimidating and offensive work environment, and actually alters the terms and conditions of employment. Harassment victims may be entitled to monetary damages under California law, depending on the circumstances of the harassment.

A number of laws protect employees from discrimination, including the Age Discrimination in Employment Act, the Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964, and the Americans with Disabilities Act. The California discrimination statutes involve unequal pay, and sex and gender discrimination.

Discrimination Protection for Military and Veterans

Law AB 556 includes "military or veteran status” to the classes protected from employment discrimination. This law allows employers to identify members of the military or veterans for purposes of awarding a “veteran’s preference as permitted by law,” but employers are advised to proceed with caution when inquiring about military service in job applications or hiring decisions. 

California Whistleblower Protections

Bill SB 496, introduced in 2013, expanded whistleblower protections from California’s general whistleblower statute to include reports alleging a violation of a local rule or regulation. It also protects employees who report suspected illegal behaviour internally to "a person with authority over the employee" or to another employee with the authority to "investigate discover, or correct "the reported violation” and/or externally to any "public body conducting an investigation, hearing, or inquiry."

Additionally, SB 496 declares unlawful any employer's rule, regulation, or policy that prevents the disclosure of reasonably-believed violations of local (in addition to state and federal) laws, rules, or regulations.

Finally, SB 496 prohibits retaliation against an employee because the employer "believes the employee disclosed or may disclose information."

California ERISA

The Employee Retirement Income Security Act (ERISA) is a federal law governing employers who offer benefits such as health insurance, pensions and stock options. Under ERISA laws, lawsuits can only be filed in certain situations and employees are not eligible for punitive damages against employers. See more ERISA information.

FMLA

The Family Medical Leave Act (FMLA) is a federal act that requires covered employers to provide up to 12 weeks of unpaid leave to eligible employees for the following reasons: birth and care of the employee's newborn child; care for a child after adoption or foster care placement; care for the employee's spouse, child or parent with a serious health condition; or for a serious health condition that affects the employee's ability to work. 

Employees are eligible for FMLA coverage if they have worked for a covered employer for at least one year, for 1,250 hours over the previous 12 months (not necessarily consecutive months) and if a minimum of 50 employees are employed by the same employer within 75 miles. 

The California Family Rights Act (CFRA) was established to ensure employees had leave rights for the birth of a child; adoption or fostering of a child; serious health conditions of the employee's child, parent or spouse; or for the employee's own serious health condition. See more FMLA information

Federal vs. California WARN ACT Violation

The California Worker Adjustment and Retraining Notification (California WARN Act) provides protection above and beyond the Federal WARN Act, to protect California employees from mass layoffs. In addition to your rights under the Federal WARN Act, the California rules cover the following:

• Employers staffing 75 or more employees over the past 12 months, which is lower than the federal mandate of 100 employees
• Part-time employees who are part of the 75-employee count as long as they have worked more than six months in the past year
• No requirements for one-third of the workforce or a period of six months or more for a layoff, as long as 50 or more employees are let go
• Employees retain their rights in a company buyout

California Statute of Limitations

It is generally better to file a wage and hour complaint sooner than later as there are strict time limits in which charges of unpaid wages must be filed. The statute of limitations for California wage and hour lawsuits is three (3) years from the date when the most recent violation has occurred. You might have other legal claims with shorter deadlines, so you might want to consult with an attorney before filing a claim.

 

California Labor Law Legal Help

California employees who feel their rights have been violated may have the opportunity to bring their complaint before the courts. If you are employed in the State of California and feel that your employer or a co-worker has violated a state or federal employment law, you may qualify for damages or remedies that may be awarded in a possible class action or lawsuit. Please click the link below to submit your complaint to a lawyer for a free case evaluation.

 

Last updated on Mar-1-21