California Employee Rights: Everything You Need to Know
California employee rights are protected by both state and federal laws. 8 min read
2. Top California Labor Law Issues
3. California Labor Issue: 1. Overtime Pay
4. California Labor Issue: 2. Independent Contractor
5. California Labor Issue: 3. Exempt and Nonexempt Employees
6. California Labor Issue: 4. Meal and Rest Breaks
7. California Labor Issue: 5. Calculating Work Hours/Travel Time
8. California Labor Issue: 6. Family Medical Leave Act (FMLA) and California Family Rights Act (CFRA)
9. California Labor Issue: 7. Sexual Harassment
Updated November 10, 2020:
California Employee Rights
California employee rights are protected by both state and federal laws. Federal regulations prohibit employers from making hiring decisions due to the following:
- Race, color, or religion
- Sex (as well as pregnancy), age, or national origin
- Genetic information or disability
If a company has 15 employees or more, it must adhere to all federal laws. When it comes to age discrimination, the company size must be 20 employees or more in order for mandatory compliance.
Federal laws create minimum guidelines to regulate employee protection, but states are able to create stricter standards, and often do so in regards to minimum wage or anti-discrimination. After that, companies often utilize their HR team to not only enforce California employee rights, but also create company-specific policies regarding employees, hiring, firing, and benefits.
Top California Labor Law Issues
While there are many labor law issues prevalent in California today, seven stand out as the most relevant. They deal with: calculating overtime pay, working with independent contractors, distinguishing between exempt and non-exempt employees, correctly scheduling breaks, calculating work and travel time, understanding the Family Medical Leave Act and the California Family Rights Act, and preventing sexual harassment.
California Labor Issue: 1. Overtime Pay
Make sure your company is correctly calculating overtime pay for employees by identifying any eligible hours. Figure out their "regular rate" through HR and then determine whether the overtime hours should be paid time and a half or double time.
Overtime breaks down into two categories for non-exempt employees. The 1.5 times rate comes when the employee does one of the following:
- Works more than 40 hours in one workweek
- Works beyond 8 hours on a single workday, up to 12 hours
- 8 hours worked on the seventh workday in a row in a single workweek
The double pay rate is valid when a nonexempt employee does one of the following:
- Works beyond 12 hours in a single workday
- Works beyond 8 hours on the seventh workday in a row in a single workweek
California Labor Issue: 2. Independent Contractor
As an employer, you're required to keep different tax forms for independent contractors compared to regular employees. When you hire a contractor, you'll need a 1099-MISC on file. You'll also implement different withholdings from their paychecks and pay an alternative amount for their taxes.
While you can relieve some of the legal burden caused by both federal and state employment regulations when you hire an independent contractor, make sure you hire them in the correct manner. Also note that in California, administrative agencies and courts usually use common law principles when deciding the status of an independent contractor.
California Labor Issue: 3. Exempt and Nonexempt Employees
Figuring out if your employees in California are classified as exempt or nonexempt is extremely important and affects both job responsibilities and minimum salary requirements.
According to California employee rights, exempt individuals are required to earn at least twice the amount of minimum wage for a full time individual, on a monthly basis.
To qualify as an exempt employee, the person must spend more than half their work time doing job duties considered exempt. If necessary, this can be done by performing a strict duties test. This is performed by the California Labor Commissioner and involves evaluating the employees' work from a full week.
California Labor Issue: 4. Meal and Rest Breaks
Employees are guaranteed a meal period of a minimum of 30 minutes every time they work more than five hours. The mealtime is off-duty and unpaid and should be taken before the employee reaches six hours on a shift.
California employees are also entitled to a second meal break of at least 30 minutes if they work in excess of 10 hours in a single workday. The second break must be taken before the employee's 11th hour of work begins. On-duty meals are only allowed in certain situations.
Nonexempt employees are also allowed an uninterrupted rest period if they work at least 3.5 hours in a day. For every four hours worked, they may take a 10-minute rest period. Even if they work a "major fraction" of four hours, they're entitled to the break. That usually constitutes any time worked over two hours.
To encourage compliance with this law, employers are required to pay the employee an extra hour of regular pay every time the employee isn't allowed to take an appropriate meal period. The employee gets up to three years to claim this additional pay. One hour of pay should also be given for any missed or interrupted rest break and should be included in the employee's next pay period.
California Labor Issue: 5. Calculating Work Hours/Travel Time
In some cases, employees are able to claim working hours when performing job-related activities such as traveling, attending a training, or receiving some other type of education for work -- even though these activities aren't technically considered "work time." To help correctly calculate work hours for California employees, employers are expected to maintain clear and consistent meanings of both the company's workday and the workweek. Employers must also communicate any changes in rate due to traveling or other special circumstances.
Rather than getting paid overtime, employees can ask for makeup time, which lets them instead take leave for personal reasons. As an employer, you can certainly allow for makeup time if your employee asks for it, but you're not required to permit it. If you're a private employer that is subject to the Fair Labor Standards Act, you're not allowed to give employees compensatory time instead of overtime.
It's also important to understand rules surrounding the seventh consecutive day of work, which entitles non-exempt employees to overtime pay. There may also be additional requirements from both California and the federal government on how many hours may be worked in certain periods. Additionally, any California company employing piece-rate workers must also compensate those workers for their rest periods on top of the money paid at their piece rate. This should be determined by a pre-determined hourly rate.
To protect the company from employee claims, it's important to keep comprehensive records on file pertaining to all employees' work hours and compensation. If your company is in a relevant industry, you may qualify for different record-keeping rules under the California Labor Code and Industrial Welfare Commission (IWC) Wage Orders.
Depending on the employee's age, the company's industry, and the time of year, there may be limits on how many hours can be worked under both federal and state law. However, some circumstances permit extended working hours. There is also a limit on how many hours a minor may work.
California Labor Issue: 6. Family Medical Leave Act (FMLA) and California Family Rights Act (CFRA)
If your company has 50 employees or more, you're subject to both the Family Medical Leave Act (FMLA) and the California Family Rights Act (CFRA). The former is a federal law and the latter is a state law. They allow for employees to be allowed a certain amount of time off for personal situations such as:
- Illness (either for the employee or a family member)
- Birth of a child
- Adoption of a child
- Difficulty related to family member's military service
Eligible employees may utilize this leave time for as many as 12 weeks each year. The time bumps up to 26 weeks per year if it's used to care for an injured military service member. It's especially important to comply with these laws because they're one of the most common abuses of California employee rights, often resulting in litigation and huge liabilities. Employers also may not discriminate or retaliate against an employee because they've chosen to take off time through either FMLA or CRA.
These family and medical leave laws are targeted to employers with 50+ employees at least 20 calendar weeks of this year or the previous year. The laws also apply to any public employer, no matter how small. Eligible employees include those on the payroll, even if they haven't yet received any compensation, as well as commissioned workers and part-time workers.
However, some restrictions do apply in order for an employee to be eligible. According to CFRA, they need to work at the employer's company for at least a year. During that time, they should total at least 1,250 hours before taking any leave. Once on family or medical leave, the employee can either use up all 12 weeks consecutively or use the time in shorter periods, such as weeks, days, or even hours. In the event they use their time in smaller chunks, the employer can put the employee in a different position temporarily, as long as they receive the same benefits and pay rate.
If an employee takes intermittent or reduced schedule family/medical leave, the employer can require the employee to temporarily transfer to a position better suited to that schedule with which the employee will have an equivalent pay and benefits.
It's also important for employers to understand that 12 weeks refers to regularly scheduled workweeks. If an employee is eligible but works a non-traditional schedule, the 12 weeks maximum is calculated by working days in a proportional manner. Employers have a choice of four ways to choose the 12-month period for entitled leave to occur.
Employers may also request some type of medical certification if the employee is taking leave for their own illnesses or due to a sick family member. Medical privacy laws must still be adhered to and can limit exactly what kind of information is required. Additionally, a serious health condition must meet specific definitions to qualify for leave.
California employees should have access to an explanation of their rights concerning family leave by their employer posting educational notices. While family and medical leave are unpaid, employees can use their paid sick days or paid time off during their leave time. They're also entitled to continue receiving their health benefits through the employer, as well as their retirement and pension benefits.
As family and medical leave time is approved, the employer must also provide assurance that the employee will be able to return to their same position, or at least a comparable one. Any violation of these laws can result in a civil lawsuit against the employer; moreover, supervisors can be held personally liable for any violations. To help avoid these situations, an employer should have a family and medical leave policy on file that is specific to their organization.
California Labor Issue: 7. Sexual Harassment
Employers in California should know how sexual harassment is defined and how they can effectively prevent and stop it from occurring in their own workplace. Sexual harassment is considered to be any workplace sexual conduct, both verbal or physical, that is unwelcome. This is broken down further into two categories: quid pro quo or hostile environment.
Title VII of the Civil Rights Act of 1964 forbids sexual harassment and applies to employers with 15 or more employees for 20 or more weeks in this year or the previous year. In California, additional protections are extended through the California Fair Employment and Housing Act, and includes applicants, unpaid interns, employees, and independent contractors.
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