Understanding Employer Rights and Responsibilities in California

Building a business in California comes with tons of exciting milestones—whether it’s hiring your first employee or making your first sale. But growing a small business also comes with the less exciting—and sometimes downright stressful stuff, like understanding California employer rights and responsibilities.

Fortunately, figuring out the legal side of being an employer isn’t as complicated as it might seem. Once you get the hang of it, following those rules will feel like second nature.

Ready to explore the world of California employer rights and responsibilities? Let’s dive right in.

What are employer rights and responsibilities?

Employer rights are a series of rules and regulations that protect businesses that employ workers. The goal of employer rights is to help businesses grow while being able to safely hire employees to support their goals. Employer rights often cover things like the right to hire the employees you want and to create company policies that best fit your business needs.

On the flip side, employers also have responsibilities to their employees. While most employers want the best for their employees, it’s unfortunately not uncommon for businesses to put their employees on the back burner—even though it’s been proven to impact productivity and business success. Employee rights are created to make sure employees can have a safe and successful work experience.

Why is understanding employer rights important

All the extra rules and red tape might feel like a pain—but ultimately, they are designed to protect you and your employees. Employers that prioritize their employer rights and responsibilities benefit from:

• Better business decisions: Your rights can help you make informed decisions around hiring and managing your employees.
• Increased employee happiness: Staying on top of your responsibilities as a business helps build trust with your employees, making them happier and more engaged with their work.
• Stronger employer brand: Being known as a company that creates a safe and positive work environment can help you attract employees and customers.
• Protection from liability: Employer rights provide clear-cut guidance for what employers are and aren’t allowed to do, protecting you and your business in the event of a legal dispute.
• Legal compliance: Your responsibilities as an employer aren’t optional and workplace violations can cost you. Even accidentally violating labor laws can result in hefty fines, lawsuits, or even jail time.

Ultimately, understanding your rights and responsibilities empowers you to make decisions that are best for your business while making sure your employees are taken care of.

What are the 10 employer rights and responsibilities in California?

Labor laws vary from state to state, which is why it’s important to understand which rules apply to your business.

Here are some of the rights and responsibilities that employers should be aware of in California.

1. Right to minimum wage

Employers in California have the right to determine how much they pay their employees. With one caveat: they must meet the minimum wage requirements.

The Fair Labor Standards Act (FLSA) has minimum wage requirements that cover employers across the U.S. However, states like California have higher minimum wage requirements that supersede the FLSA minimum wage rules.

California’s minimum wage for all employers, regardless of size, is $15.50 per hour. Certain local jurisdictions have higher minimum wages, such as Sunnyvale with a minimum wage of $17.95. There are also different wage rules based the number of employees you have.

Salaried employees who are exempt from hourly rules are also entitled to a minimum salary

Tip for tips: Federal minimum wage and many states have a lower minimum wage for employees who earn tips, such as servers in a restaurant. But in California, the minimum wage is the same—regardless if your employee earns tips or not.

2. Right to breaks

As an employer, you have the right to have employees on shift who are performing at their best. But to help employees do that, they also have the right to breaks during the work day.

In California, employees are entitled to take a 10-minute paid rest period during each four-hour shift. If an employee works a shift that’s less than 3.5 hours, a break is not required by law.

For shifts longer than five hours, you’re required to provide a meal break of 30-minutes or longer. In California, the meal break is unpaid if your employee has no work-related responsibilities and is allowed to leave. But if you need them to stay on-site or if they’re required to be available to work during their break, you’ll have to include them as working hours and pay them.

Employees who are working shifts that are 12 hours or longer as also allowed additional breaks by law.

3. Right to paid time off sick leave

Another way to help your team stay in top shape? Giving them time to rest and recuperate when they’re not feeling well.

As of January 1st, 2024, California requires employers to provide full-time employees with 40 hours of paid sick leave every year—or five days. This is up from the three days previously required.

You can provide all hours together as a lump sum. Or you can choose to have your employees accrue their sick hours based on the hours worked.

Employers in California are not required to provide vacation time. However, employers are allowed to combine sick days with other paid time off policies, as long as employees are provided with the minimum time off to be used as sick days.

Paid time off policies made painless: Create PTO policies and track accruals and balances for sick and vacation leave in one place. And once your employees are ready to take time off, you can approve PTO in just a few clicks.

4. Right to employ minors

Those summer and high school jobs are where memories are made. But hiring minors is a little more complicated than a kid walking right into their neighborhood store as they might lead you to believe in the movies.

In California, employers do have the right to hire minors. But there are some things you want to keep in mind if you do so:

• Anyone under the age of 18 must have a permit to work.
• Minors who are 12 or 13 years of age can only during days off of school or summer holidays. No after-school shifts are allowed.
• Certain industries and positions are off-limits to 15 years old and under, like those that operate machinery.
• The Code of Federal Regulations also states that minors can’t work jobs that are deemed hazardous.

So while many employers are hesitant to discuss age due to concerns of discrimination, it’s important to understand the age of minors on your payroll. But speaking of discrimination…

5. Right to protection from workplace discrimination

Employers have a responsibility to protect employees from workplace discrimination. Practicing workplace diversity and inclusion isn’t just best practice, it’s the law.

Everyone deserves—and has the right to—a workplace that’s free of discrimination and harassment. So you have to create policies that prevent those situations from occurring. Not only does this include how you treat current and potential employees, but also interactions between employees.

According to the California State Senate, protected classes include, but aren’t limited to:

• Race or color
• Age
• Sex, gender identity, or sexual orientation
• Marital status
• Physical or mental disability
• Medical status

6. Right to overtime pay

In California, employers have the right to ask employees to work overtime. But non-exempt employees in California, and any other state, are entitled to overtime pay.

The FLSA defines overtime as any hours worked over 40 hours a week. So any time employees work over 40 hours a week, you’ll need to pay those extra hours at 1.5x their regular hourly wage.

Unauthorized overtime? Not with Homebase. Minimize overtime hours by getting notified any time an employee has reached 40 hours a week. Homebase’s time clock and timesheet apps keep track of all employee work hours—regular and overtime—to keep you organized ahead of payday.

7. Right to family and medical leave

Under the Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA), employees in California are entitled to take time away from work to take care of family and loved ones. The leave doesn’t have to be paid but you have to allow employees on eligible leave to return to their job without any consequences or repercussions.

The FMLA and CFRA are similar laws and cover things like personal health concerns, health concerns with family members, and welcoming a new child to the family. They both require employees to have worked 1,250 hours in the past 12 months for their employer before being eligible for leave.

The biggest difference is the number of employees before the laws come into effect. The FMLA only applies to companies larger than 50 employees. But in California, the CRFA applies to any employer with 5 or more employees, so if you’re in California, you’ll need to default to the rules of the latter.

8. Right to protection from wrongful termination

No one wants to lay off or fire an employee, but sometimes it needs to happen. Business needs can change over time or the employee-employer relationship might just not be working out. That’s why in California, employers have the right to terminate at-will employees.

But employees are protected from wrongful termination—AKA they can’t be fired for an illegal or unlawful reason. Common of examples of wrongful termination include discrimination, retaliation, or employer contract violations.

9. Right to correct employee classification

In California, different classifications of employees have different rights. For example, independent contractors typically aren’t eligible for sick days and salaried employees usually don’t qualify for overtime.

And while employers have the right to hire for the types of roles that support their business goals, you can’t skirt the rules by classifying employees incorrectly. And California Assembly Bill 5 (AB5) is one way that California is making triple sure of that. Federally, the FLSA also has rules around what types of employees can be classified as salaried and exempt from things like overtime.

The goal of making sure employees are classified correctly is to make sure that they’re getting the benefits they’re entitled to.

10. Right to safe working conditions

Employers in California legally have the responsibility to keep their employees safe in the workplace. While this seems obvious, workplace accidents and injuries are surprisingly common, with over 2.8 million injury and illness cases in the U.S. in 2022.

How you keep your employees safe can vary depending on your industry and type of business. But generally, this includes things like having workplace safety policies, providing necessary safety equipment, and properly reporting accidents or injuries.

Clear-cut compliance in California: Get the latest on the state of labor laws and employer rights and responsibilities in California with this handy guide.

California employer rights laws and legislation

There are many federal laws that employers need to follow. But states also have the flexibility to enact labor laws. California is one state that has several legislations that impact employers. Two laws that small businesses in California should be aware of? CFRA and AB5.

What is the California Family Rights Act (CFRA)?

The California Family Rights Act generally allows employees to take time off for health and family-related reasons. This time off is unpaid but CFRA protects their job, so employees can step back into the same role and compensation at the end of their leave.

The CFRA has been in effect since 1983. However, like most laws, this one has been updated over the years to include new rules that impact both employees and employers. Most recently, it was expanded in January of 2021 and 2022 to cover additional employers and employees.

Here’s the gist of the CRFA as of 2024:

• The CFRA covers employers with 5 or more employees.
• Eligible employees can take up to 12 weeks of CFRA leave.
• CFRA leave can be used to care for an employee’s own serious medical condition, the serious medical condition of a family member, or to bond with a new child.

What is the California Assembly Bill 5 (AB5)

California Assembly Bill 5 (AB5)—AKA the gig worker law—requires employers to classify gig workers as employees rather than just independent contractors. AB5 went into effect on January 1, 2020.

AB5 requires companies to treat workers as employees and issue W-2s unless they meet all three of the following requirements—also known as the ABC test. Here’s the gist:

1. The worker’s work and performance aren’t under the control of the company.
2. The worker’s work isn’t part of the core service or product of the company.
3. The worker regularly does similar work independently.

California AB5 helps protect workers by providing them with the right tax documents as well as making them eligible for benefits like sick days and insurance.

Implications of California employer rights for business owners and employees

But most importantly? Following the rules isn’t just the law. By keeping on top of your employer rights and responsibilities, you can create long-lasting business success while providing a positive work experience for your team.

And we get it—laws and legislation can certainly be complicated to decipher. But at the end of the day, these rules exist to protect your business and your employees. They aren’t always perfect—and can feel inconvenient at times—but these laws will continue to be updated to make sure that you and and employees are supported as much as possible.

Want to make staying compliant simple?

Homebase’s all-in-one employee management app helps you skip the stress and stay on top of labor laws in your region. From getting tracking employee time to getting help from HR experts, Homebase does it all. Get started today.