Top HR Mistakes Series...Applying Federal Laws to CA Employees

Thursday, March 22, 2018

We’re revisiting our series on the Top HR Mistakes Made by Small Employers!  Each week we’ll dig in on another mistake we see frequently occurring in small businesses – and if we’re honest, they’re probably happening in larger companies too!

One of the biggest issues we see here in California is applying federal laws to California employees. While some federal laws apply to California employees too, California maintains numerous laws that are more stringent than the federal versions, including payment for (and taking of) meal and rest breaks, overtime, and final payment of terminating employees.

Minimum Wage

A well-meaning employee who Googles “what is minimum wage?”  may stop as soon as they see that the federal minimum wage is $7.25 per hour. Without looking further though, they won’t discover that California, like 28 other states, has a minimum wage that is greater than the federal wage: ours is $10.50 per hour if you have 25 employees or less, and $11.00 per hour if you have 26 employees or more. And on top of THAT, there are 22 cities or jurisdictions in California who have minimum wages even higher than the state’s! Willful violation of minimum wage can cost you $10,000 or more, so make sure you’re looking for the right minimum wage!


In most states, overtime only kicks in once a non-exempt employee works over 40 hours in a week. That’s true in California too…but we also pay overtime when a non-exempt employee works more than 8 hours in a day.

Meal and Rest Breaks

The Fair Labor Standards Act (FLSA), which is the federal wage and hour law, actually doesn’t require meal/rest breaks at all! In California, however, employees who work more than 5 hours in a day must receive an off-duty, unpaid meal break of at least 30 minutes, and that break can’t occur any later than the end of the employee’s 5th hour of work. Sound complicated? It is. Employers need to be sure they are complying with this law from day one – this is one of the most common employee complaints we hear!


Final Payment 

California requires employers to pay all monies owed to a voluntarily terminating employee on their last day of employment, provided the employer has received at least 72 hours of notice from the employee of their resignation. (If an employee does not give 72 hours of notice, the employer has 72 hours to pay the employee.) This includes any accrued vacation, PTO, sick, etc time (except Paid Sick Time required by CA Law.)

If the termination is involuntary, that is, you’re letting the employee go, then this must be paid to the employee upon notice of their termination. Bring it with you when you let them know their employment with your company is ending!

Other California-Specific Items

California also provides for some additional benefits that aren’t in every state, including Disability, Paid Family Leave, and Paid Sick Time,  and has very specific laws regarding hiring and background checks, asking for salary history, legalization of recreational marijuana, and COBRA. This is by no means an exhaustive list, and anything on this list can change at any time – so be sure to do your homework!

California is a great place to live and work – but as an employer you’ve got to do that homework, and know where to go to find answers when you need them. An HR professional is a great place to start!

The Fine Print: Each employment situation is unique and requires its own analysis, so while we encourage you to use this information as a guideline, it should not be considered legal advice.