Several Labor Law Basics for the State of California

Labor Law in California provides workers with a range of protections. These include minimum wages, overtime pay, paid vacations, and other safeguards for employees against discrimination and retaliation. These rules also permit workers to file lawsuits on their own behalf and seek civil penalties against employers for violations, so it’s important to know some things about it.

Minimum Wage

The minimum wage in California (https://minimumwage.com/state/california/) is a basic expectation for all employees. It’s the rate most workers must be paid in order to make enough money to live off of, taking into account the rising cost of living in the state.

The state minimum wage is adjusted annually in accordance with inflation. Local minimum wages may differ from city to city and may exceed the state minimum wage in some cases; thus, employers must ensure they adhere to both local requirements as well as both state and federal minimum wage laws.

If an employee is paid less than the minimum wage, they have the right to pursue civil lawsuits against their employer for the difference. They may also file a discrimination/retaliation complaint with the Labor Commissioner.

Though the minimum wage may be beneficial to employees, it can have negative repercussions for business owners and managers. They may need to make tough financial decisions such as letting staff go or raising prices without warning.

Workers who have been injured may find that an increase in minimum wage negatively impacts their Workers’ Compensation benefits. If an employee is terminated for filing a complaint or threatening to do so, they may have grounds for filing a retaliation claim against their employer.

Minimum wages are often criticized as too high, yet they remain essential to guarantee working people the means to support themselves and their families. Minimum wages help reduce income inequality.

There are certain exceptions to the minimum wage law (which you can read here) which includes those for apprentices and certain mentally or physically disabled workers. To these workers, the Labor Commission must issue certificates granting them a subminimum wage.

Another exception to the minimum wage applies to learners – employees who learn new skills. They may be paid no less than 85 percent of the minimum wage for their first 160 hours of employment.

In many cases, there are various exemptions to the minimum wage, such as those for commissioned employees and outside salespersons. Employees working under a collective bargaining agreement are exempt from paying minimum wage requirements.

Overtime Pay

Overtime Pay is compensation owed to employees for working beyond their normal working hours. It’s calculated based on an employee’s regular rate of pay, which may include hourly earnings, salary, piecework wages and commissions. Nondiscretionary bonuses may be granted based on production or proficiency levels.

The Fair Labor Standards Act (FLSA) sets the requirements for overtime wages. However, many state laws can supersede federal regulations in certain instances; this is especially true in California with strong labor-friendly state regulations that protect employees.

Employees typically qualify for overtime pay when they work more than 8 hours in a day or 40 hours per week, depending on the law that applies to their job. Exceptions exist however, such as when an employee is an exempt employee or works from home.

Overtime must always be paid. If an employee is not paid for their overtime hours, they can file a complaint with the Labor Commissioner or hire an employment lawyer to sue for unpaid wages. In case of success in court, workers could receive liquidated damages as well as attorney’s fees associated with suing for unpaid wages.

Overtime payments can affect the cost of workers’ compensation insurance. Different states have differing methods for calculating these premiums, but most do take into account overtime pay as this is built-in to the pay structure, as a whole.

In California, workers’ compensation premiums are usually calculated as a percentage of an employer’s payroll. The larger the company’s earnings, the higher these payments must be made.

Overtime pay is typically calculated at 1.5 times the regular rate of pay for employees who work more than 40 hours in a workweek. In certain instances, this amount may increase to double time for those employees working an additional 12 hours during any given day.

Paid Vacations

Employees are not mandated to take vacation time, yet many do. Employers have the freedom to provide such benefits if it does not violate any federal or state regulations.

The California Labor Law safeguards employees’ right to earn and use vacation time. However, it also sets certain limitations on employers’ practices and policies regarding how they must provide this benefit.

Employers may have vacation policies that require employees to take off during certain times of the year, and some allow employees to bank unused days for later use. While these limitations are legal and beneficial for employees who wish to take time off work, employers should still ensure employees understand when these limitations apply.

Under California law, employees who take a vacation during their first year of employment cannot be denied payment for it – this is known as an “introductory period.” The DLSE upholds this policy provided it isn’t discriminatory.

In California, employers can also limit the amount of vacation or paid time off that employees can earn. It doesn’t need to be a set number but should be reasonable according to DLSE guidelines.

The DLSE has recommended that a cap should be no less than 1.75 times the annual accrual rate. While this number seems conservative, it’s easy to understand why this would be considered reasonable.

A cap is also essential, as it prevents employees from taking more vacation than they have already earned. Employers commonly set limits on how much vacation an employee may accrue.

California is unique in that while some states have passed laws mandating paid vacation, its laws don’t follow suit. Instead, its policies are based on the idea that vacation time should be treated like wages – accrued as soon as work is done.

When an employee leaves, a final paycheck must be issued at their termination. This paycheck should include all earnings, including any vacation pay accumulated.

Misclassification

Misclassification is the intentional and willful denial of an employee’s basic rights as a worker, usually through misclassifying them as independent contractors or freelancers. This deprivation includes earning minimum wage, overtime pay, meal and rest period premiums and other benefits normally reserved for employees; it also encompasses unemployment benefits and medical care if injured on the job.

In California, this site states that workers misclassified as independent contractors are entitled to several protections. These include minimum wage, overtime pay, paid sick leave, unemployment insurance coverage and the right to sue their employer for damages or wrongful termination as well as sexual harassment complaints or other HR issues.

Misclassification has devastating effects for those affected, law-abiding employers who compete with these companies for business opportunities, and the public at large. Denying employees their rights leads to decreased purchasing power which in turn undermines the economy as a whole.

Misclassified workers pose an industry competitive disadvantage when it comes to bidding against law-abiding businesses and must subsidize their costs by paying higher workers’ comp payouts and/or what’s known as unemployment insurance taxes. Unfortunately, these expenses are passed along to consumers and taxpayers, who suffer the economic repercussions of lost tax revenue or high health care premiums.

Typically in the industry, misclassified employees don’t have access to unemployment benefits and other employment-based benefits that would otherwise be available to them. This creates a greater need for high-quality public assistance, which in turn raises taxes across all different levels of the government.

Misclassification can have a devastating effect on workers’ compensation benefits, so it’s critical for law-abiding companies to take proactive steps to guarantee their employees are classified correctly and paid as such. Companies should review their contracting and employment relationships with all contractors in order to guarantee they are abiding by the law.