A California Employment Law Checklist

The statutory and regulatory requirements imposed on California employers are probably the most rigid and complex of any state in the Union – often exceeding the requirements of federal law in those areas (such as minimum wage) that they jointly regulate, and transcending the employee protections enacted in most other states. Even companies that have long done business in the state are often surprised by a California employment law or regulation that they never knew existed or had long ago forgotten about. Moreover, California appellate courts sometimes reach novel interpretations of formerly settled law in addressing employment disputes first decided in the trial courts, where in some counties one-third of dockets involve employment-related litigation. The following checklist serves as a convenient refresher and a guideline to business starting up in California or sending out-of-state employees into the state on a temporary basis.

Although the list is a working summary of issues that companies must confront, California employment law is extensive and fluid. The list is not intended to be a comprehensive guide on all of the nuances in compliance that businesses may face. Therefore, the document should be used as a starting point for further inquiry and not as a substitute for professional advice, including advice of counsel expert in the subject.

 Notice to New Employees: When hiring a new employee, an employer must, among other information, provide written notice of the rate and basis of pay, the regular payday, the location and telephone number of the employer’s office, and the name of its worker’ compensation carrier, and subsequent notice of any change to this information unless the change can be found in the pay statement.

 Mandatory Pay Statements: Pay statements must accompany pay checks or notices of automatic deposit and must include up to 9 separate current and year-to-date line items. Failure to comply subjects an employer to a maximum of $4000 per employee.

 Higher Minimum Exempt Salary: Exempt employees must be paid at least two times minimum wage, currently $33,280 per year and, starting July 1, 2014, $37,440 per year on a salary basis in order to quality as exempt.

 Computer Software Exemption: To qualify as exempt in California, computer software employees must be paid at least $36 per hour, $6250 per week and $75,000 per year. This increases to $84,130.53 per year or $7010.88 per month effective July 1, 2014.

 Written Agreements with Commissioned Employees: Employers who have employees in California who are paid on a commission basis must have a written agreement with each such employee defining the method of payment.

 Independent Contractors: Employers who willfully misclassify employees as independent contractors are subject to a civil penalty for each violation of between $5000 and $15,000 and, if a pattern and practice of misclassification is found, the civil penalty imposed for each violation ranges between $15,000 and $25,000.

 Group Health During Pregnancy Leave: Regardless of whether the employee is eligible for leave under the federal Family and Medical Leave Act, employers of 5 or more employees must continue group health coverage for pregnancy disability for up to 4 months.
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 Individual Liability: California employment law imposes liability for engaging in harassment on individual supervisors and holds employers strictly liable for such conduct. Federal statutes and case law are far narrower on these subjects.

 Interactive Process: While the federal Equal Employment Opportunity Commission has issued guidelines on the interactive process between an employer and a disabled applicant or employee necessary to determine whether a reasonable accommodation to the disability is available that would allow the applicant or employee to perform the essential functions of the job, the interactive process is mandated by California law and an employer may be sued on a separate cause of action for failing to engage in the process.

The above article was written by Arthur Silbergeld | Partner Fulbright & Jaworski LLP 555 South Flower Street, Forty-First Floor, Los Angeles, California 90071, United States
Tel +1 213 892 9235 | Fax +1 213 892 9494 arthur.silbergeld@nortonrosefulbright.com

Note: The article was condensed down to its original length. The full article can be obtained by sending an email to Art at the above email address.