Posted on February 15th, 2015
We know that California Labor and Employment laws can be confusing and difficult to navigate for employers and business owners like you. But it is important that you take the time to understand them so you can protect everything you have worked so hard for!
The last thing you want is a disgruntled employee filing a suit which could potentially cost you thousands of dollars or possibly even your business.
What’s The Best Way To Protect My Business?
I am not going to mess around and beat around the bush. Here is the secret. The most effective way to reduce the chances of your business being served with an employee claim or labor lawsuit is to have Employee Policies and Procedures package.
Notice I said reduce your chances. Just because you have signed employee policies it does not mean an employee can’t make a claim against you. But based on my many years of experience as a labor attorney who exclusively protects employers, the chances of it are much lower and you also increase your chances of winning claims against you, if you have the package and they are done properly.
So what do you need to have in your Policies and Procedures? Great question! To remove some of the confusion and make these laws easier to understand, we have taken the most important points and put them below so that you can be sure you’re taking the most important steps you need to protect your business from employee issues.
If you are already dealing with an employee claim, first of all I’m sorry to hear that, I know it’s stressful! Secondly you can always contact us for a free 15 minute consultation and we will give you some advice on your options. Book Now
Overview Of California Employment Laws
- California’s employment laws are much different from those of other states and from Federal laws.
- California’s employment laws are VERY favorable to employees so it is imperative that employers very carefully follow these laws or else the employer may face severe penalties (which may include paying monetary damages and even the attorneys fees of the employee).
WAGES & HOURS
- The minimum wage in California as of July 1, 2014 is $9.00 per hour.
- As of January 1, 2016, the minimum wage in California will go up to $10.00 per hour.
OVERTIME
- An employee must be paid overtime, at the rate of 11⁄2 times their normal hourly wage, for all hours:
(a) in excess of 40 hours worked in any given week.
AND/OR
(b) in excess of 8 hours worked in a given day.
AND/OR
(c) for the first 8 hours worked on the 7th day of work in any given week.
An employee must be paid overtime, at the rate of 2 times their normal hourly wage, for all hours:
(a) in excess of 12 hours worked in any given day.
AND/OR
(b) in excess of 8 hours worked on the 7th day of work in any given week.
- If at least 2/3 of the employees in a particular department or work unit/group vote in favor, then in certain circumstances, the employees in that department or work unit/group can work 10 hours per day of work within a 40-hour work week without the payment of daily overtime.
- In such case, hours worked in excess of 10 hours in a given day or in excess of 40 hours in a given week still must be paid applicable overtime.
- There are some limited exemptions from overtime pay for certain “executive,” “administrative,” and “professional” employees provided certain legal parameters are met (e.g., the employee spends at least half his/her time on the duties meeting the applicable test)
EMPLOYEE MEAL PERIODS AND REST BREAKS
- Employers must provide meal periods and rest breaks to employees.
- To satisfy the law, employees must be informed of their rights to take these breaks and be given a genuine opportunity to actually take them.
- Employers must keep accurate records of meal periods.
- Each employee is entitled to an unpaid, uninterrupted meal period of not less than 30 minutes before 5 hours of work is completed and he/she must be free to leave the premises.
- Each employee is entitled to a second meal period of 30 minutes if he/she works more than 10 hours in a given day.
- An employee may voluntarily choose not to take the first meal period if his/her work schedule for that day is 6 hours or less.
- An employee may voluntarily choose not to take the second meal period if his/her work schedule for that day is 12 hours or less.
- Each employee is also entitled to a 10-minute paid rest break for every 4 hours of work.
- Employers with outdoor places of employment (e.g., over 85 degrees Fahrenheit) must permit employees to take cool down periods in the shade of not less than 5 minutes at a time on an “as needed” basis to prevent overheating.
VACATION DAYS
- Employees must be allowed to carry over their accrued and unused vacation days; however, employers can cap the number of vacation days that can be carried over.
- Accrued and unused vacation days are treated as wages and may not be forfeited.
- If an employee quits or is terminated, he/she must be paid for all unused accrued vacation based on his/her rate of pay when employment ends.
DEDUCTIONS FROM EMPLOYEE WAGES
- An employer may not make any deduction from an employee’s wages to compensate the employer for loss or damage caused by an employee’s mere negligence – deductions may only be made in the case of an employee’s gross negligence, willful misconduct or dishonesty.
- An employer may not make any deduction from an employee’s final paycheck to recover an unpaid debt (e.g., a loan or cash advance) unless the employee specifically agrees to the deduction in writing at the time of termination.
INFORMATION REQUIRED ON PAYCHECKS AND PAYSTUBS
Employee paychecks and pay stubs must generally include the following information:
- Gross wages earned.
- The last 4 numbers of the employee’s Social Security #.
- Total number of hours worked.
- The name and address of the legal entity that is the employer.
- If the employee is paid on a piece-rate.
- All applicable hourly rates in effect during basis, the number of piece-rate units the pay period and the corresponding earned (and any applicable piece rate) number of hours the employee worked at each hourly rate.
- All deductions from pay.
- Net wages earned.
- For paychecks, the name and address of a business in California state where the check was printed.
- The dates of the applicable pay period can be cashed on demand without a discount.
- The employee’s name.
PAYMENTS TO DEPARTING/TERMINATED EMPLOYEES
- If an employee quits but has given at least 72 hours advance notice, he/she must be paid their final paycheck (including all accrued and unused vacation days) on the last day of work.
- If an employee quits but has given less than 72 hours advance notice, then they must be paid their final paycheck (including all accrued and unused vacation days) within 72 hours of when they gave notice.
- If an employee is terminated or laid off, then upon termination he/she must immediately be paid for all wages and for all accrued and unused vacation days.
EMPLOYER MUST PROVIDE CERTAIN INFORMATION TO NEW EMPLOYEES
Employers must give each newly hired, non-union employee written notice of the following information:
- The employer’s name and mailing address.
- The employee’s rate (or rates) of pay.
- The basis on which their wages are to be calculated (whether hourly, piece rate).
- Applicable overtime rates.
- The designated regular pay day.
- Employers must also notify employees of any changes to any of this information within 7 days of such change commission, annual, etc.).
SICK LEAVE
- California does not currently require employers to provide sick leave (but if they do, employees must be allowed to use up to half of their sick leave to care for a sick child, spouse or domestic partner).
- Starting in July 2015, California employers generally will have to provide their employees with at least 3 paid sick leave days per year.
MISCLASSIFICATION OF EMPLOYEE AS “CONTRACTOR”
- California presumes workers are employees and is hostile to the independent contractor classification, meaning it is difficult to convince the Labor Board or a court that a person was a contractor and not an employee under the law.
- There is a very complex multi-factor legal test an employer must satisfy to establish that a particular person was a contractor and not an employee.
HARASSMENT
- Employers must prohibit harassment and also must take all reasonable steps necessary to prevent and correct harassment and discrimination.
- Employers will be strictly liable for any hostile environment harassment by a supervisor.
- All employers that have 50 or more employees must provide at least two hours of classroom or other interactive harassment training to its supervisory employees – and this training must be provided every 2 years or within 6 months of an employee assuming a supervisory position.
IMMIGRANT ISSUES
- Employers can’t threaten to contact, or contact, immigration authorities because an employee complained he/she was being paid less than the minimum wage.
- Employers can’t discriminate, retaliate or take any adverse action against an employee because the employee updates, or attempts to update, his/her personal information.
- An employer may have his/her/its business license revoked (and may be found guilty of criminal extortion) for reporting, or threatening to report, the immigration status of any employee because the employee complained about employment issues.
MONEY AN EMPLOYER MAY OWE IF AN EMPLOYEE WINS HIS/HER CLAIM
- If an employee is successful (e.g., wins) with any Labor Board claim or with any claim in a California court/lawsuit, the employer may have to pay the following amounts:
- All Of The Back Wages Owed (Often Due To The Employee Within 10 Days) -> But If Those Back Wages Owed Aren’t Paid In Time, The Employer May Also Owe Triple (3x) The Amount Of Any Damages To The Employee.
- All Of The Employee’s Attorney’s Fees.
- In The Case of A Former Employee Who Hasn’t Been Paid His/Her Last Paycheck, Up To 30 Days Pay As An Additional Penalty.
- Where Employees Were Not Given Proper Meal/Rest Breaks, One Hour Pay For Each Past Violation (Up To 3 Years Of Payments).
- Interest On Any Of These Amounts Due To The Employee.