There was a period of time when someemployers would take advantage of their employees by paying extremely low wages for long, hard work in unsafe working conditions. The federal government put a stop to this in 1938 when it passed the Federal Labor Standards Act (FLSA), which established a number of federal labor laws, including overtime laws, working condition laws, minimum wage laws, and child labor laws. Employers must follow these laws or face stiff consequences; however, there may be additional state laws that employers must follow as well. For example, California has its own labor laws that are even stricter than those outlined in the FLSA. As an employer, it’s incredibly important that you abide by all of California’s labor laws in addition to the federal labor laws. Become familiar with the following California labor laws and how they differ from the federal labor laws.
California Civil Statute of Limitations Laws
If an employer is accused of wrongdoing, there is a certain timeframe within which a lawsuit must be filed. This is known as a statute of limitations. The reason there is a statute of limitations on California’s labor laws is to prevent unfinished legal matters from hanging over the heads of those being accused. It can affect a way an employer does business in a negative manner. To prevent abuses, there are time limits for each labor law in California. The following are the statute of limitations for filing a lawsuit against an employer for a wrongful action:
- Wrongful termination that violates public policy: two years after the date of termination.
- Wrongful termination based on harassment, retaliation, or unlawful discrimination: one year after the date of termination.
- Wrongful termination based on a breach of a written contract: four years after the date on which the breach of contract occurred.
- Wrongful termination based on a breach of an implied contract: two years after the date on which the breach of contract occurred.
- Unpaid overtime: Three years from the date on which the employee was supposed to be paid overtime.
- Being paid less than minimum wage: three years from the date the employee was supposed to be paid.
- Unpaid wages: three years from the date the employee was supposed to be paid.
- Unpaid reimbursements: three years from the date on which the employee should have been reimbursed for business expenses.
- Meal and rest break violations: three years from the date an employee was paid for not receiving a meal or rest break.
The statute of limitations on wage-related claims can be extended from three to four years based upon an unfair competition claim. The statute of limitations on labor laws in California is longer than for federal labor laws. The statute of limitations on federal labor law violations is two years, although this is extended to three years on willful violations.
California Overtime Laws
Overtime laws were put into place for a number of reasons. First, they help prevent employers from taking advantage of their employees. Most employers won’t want to require their employees to work more than the established standard workday or workweek because they will have to pay them overtime. Secondly, because overtime pay is more, it encourages employers to hire new workers instead. Lastly, overtime pay helps reward employees.
State and Federal Statutes
California statutes differ a little from federal statutes when it comes to overtime laws. The following is a brief breakdown of what the California Labor Code and the FLSA entails for overtime:
In California, the standard workday is established at eight hours, while the standard workweek is established at 40 hours. If an employee works more than eight hours a day or 40 hours a week, they must be paid overtime. Additionally, they must be paid overtime for any hours of work performed on the seventh consecutive day of work performed in a single work week. California also has two tiers of overtime pay based on the number of hours of overtime worked. There are some exceptions based on alternative workweek schedules.
The overtime laws outlined in the FLSA are much more straightforward than those in the California Labor Code. Overtime is only defined by the FLSA as any hours of work completed in excess of the standard 40-hour workweek. There is no daily overtime or seventh consecutive day overtime laws on the federal level.
California Overtime Pay Rates
The following is a breakdown of California’s overtime pay rates:
- 1.5 x the normal wage rate for any hours worked in excess of eight hours in a workday.
- 2 x the normal wage rate for any hours worked in excess of 12 hours in a workday.
- 1.5 x the normal wage rate for any hours worked in excess of 40 hours in a workweek.
- 1.5 x the normal wage rate for any hours worked on the seventh consecutive day in a workweek.
- 2 x the normal wage rate for any hours worked in excess of eight hours on the seventh consecutive day in a workweek.
Common Overtime Violations
Violating California overtime laws can result in extremely harsh financial penalties as well as potential criminal charges. The following are some of the most common overtime violations in California:
- Misclassifying your employees – Classifying employees that are non-exempt as being exempt or as being independent contractors is a clear violation, which is why you need to make sure you classify your employees properly.
- Requiring employees to work off the clock – Asking employees to work off the clock or not counting certain tasks as being work-related (such as preparing equipment for use).
- Claiming voluntary work – You can’t claim that your employees volunteered to work without pay. You are required to pay for overtime even if your employees did offer to work overtime voluntarily.
- Miscalculating overtime pay – Not calculating the overtime owed correctly is a common mistake. Employers often forget that they must account for bonuses and commissions paid during weeks that they are calculating overtime pay for.
- Poor recordkeeping – Even if you require employees to keep track of their hours, you will be in violation if you don’t pay overtime where it’s owed even if they miscalculated their hours. It’s why you need to track your employees’ hours carefully.
California Wage and Hour Laws
California has a number of wage and hour laws that are meant to protect employees from being underpaid and overworked. In addition to the overtime laws that were previously discussed, California wage and hour laws include the following:
- Minimum wage – The minimum wage for employers with 25 employees or less is currently $11/hour. For employers with more than 25 employees, it’s $12/hour. The minimum wage is set to increase by a dollar every year until 2023, when it will be $15/hour across the board.
- Meals and breaks – Meal and rest breaks are required by state law. Employees are required to have a 10-minute paid rest period for every four hours that they work. If they work more than five consecutive hours (with some exceptions), they must have a 30-minute, unpaid meal break.
There are no laws requiring employers to provide leave (such as holiday leave or paid sick leave). However, they cannot terminate or retaliate against employees who must take off for jury duty. You aren’t required to pay wages for those who are on jury duty. Of course, employers often do provide paid sick leave and holiday leave as job perks. Employers often offer severance pay as well even though that too is not required by law.
The California wage and hour laws also includes penalties for violating laws pertaining to overtime, minimum wage, and meals and breaks. Initial violations result in a fine of $50 for each employee for each pay period during which the wage law was violated (plus back wages owed). Subsequent violations result in a $100 fine (plus back wages).
California Whistleblower Laws
California implemented whistleblower laws to help protect employees that report their employer for violating California labor laws or for breaching the public trust. The whistleblower law prevents the employer from being able to retaliate against the employee who reported them. The law covers employees who report state or federal violations to the police or a government official, who reports a suspected violation internally to a supervisor or someone else within the organization, or who reports a suspected violation to any public body conducting an investigation or hearing.
If retaliation does occur, the employee has the right to file a claim for any damages that were sustained, such as lost wages, damages pertaining to a damaged reputation, and reinstatement. Individuals found guilty of retaliation can face a misdemeanor charge resulting in up to one year in county jail and/or a $1,000 fine. If the company was found guilty of retaliation, it will result in a maximum fine of $5,000.
Fair Employment Practices
To prevent employers from discriminating against job candidates during the hiring process as well as to protect employees from losing their jobs as a result of discrimination, California passed the Fair Employment Housing Act (FEHA) in 1959. This made discrimination in the workplace against the law. More specifically, FEHA protects employees from discrimination on the basis of race, religion, national origin or ancestry, color, physical disability, mental disability, medical condition, genetic information, sex, sexual orientation, marital status, gender identity, gender expression, pregnancy, military status, and age. Additionally, FEHA requires employers to provide their employees with reasonable accomodations.
You are required to provide employees who are pregnant, have just given childbirth, or have experienced medical condition as a result of their pregnancy or childbirth, with reasonable accommodations, such as a modified work schedule, modified equipment, or modified duties.
Employers must provide religious accommodations to their employees (such as allowing them to take the day off on a religious holiday). If you refuse to provide such accommodations, you must show that doing so is significantly difficult to do, expensive to do, or will cause undue hardship.
You must make reasonable accommodations for employees who are disabled. For example, if they are in a wheelchair, you must make it easy for them to access their workspace.
You cannot pay two employees a significantly different wage on the basis of sex, race, or ethnicity for substantially similar work. You must be able to show that the pay differential is based on a factor other than that of discrimination if an employee claims unequal pay.
Discussion of Wages
Employees have the right to discuss their wages or the wages of other employees with anyone they want to and you cannot retaliate or discriminate against employees who chose to do so.
Access to Personal Files
Both current and former employees have the right to access their personal files at any time. You must make their records available to the person requesting them at a reasonable time and interval–and no later than 30 days after receiving a written request. You’re allowed to charge a fee only if it equals the actual cost of copying the documents in the file.
Recruiting and Hiring
When it comes to recruiting and hiring new employees, there are a lot of rules that you will need to be aware of to stay compliant with the law, including the following:
- If you drug test a job candidate, you must provide a notice of the drug testing requirement.
- You can only perform credit checks on job candidates for certain positions (such as law enforcement positions). You must also provide notice that you require a credit check to the candidate. You must also notify the candidate of any adverse actions you take on the basis of that credit check.
- You can only perform a criminal background check if it’s related to the job and only after making a conditional offer to the candidate. Certain types of criminal history cannot be used to make a hiring decision. This includes arrests that did not result in convictions; convictions that were sealed, expunged or eliminated; arrests, court depositions, or detentions that occurred while the candidate was a minor; non-felony marijuana possession convictions that are more than two years old.
- You can investigate consumer reports but you must provide a written notice to the candidate.
- If you have five or more employees, you cannot include job application questions asking about the candidate’s criminal conviction history.
- You cannot use a job candidate’s previous salary history to determine whether to make a conditional offer or how much salary to offer.
It Always Pays to Stay on the The Right Side of the Law
Glancing over California’s labor laws might give you the idea that many of them are common sense (such as not discriminating against your employees). However, if you’re not familiar with the specific laws, you may break them accidentally. In many cases, such as the overtime laws, employers will break the law without meaning to (such as miscalculating the overtime pay of an employee). It’s a good idea to familiarize yourself with California’s labor laws. Doing so will help you avoid trouble with the law, which can result in hefty fines. Violating California’s labor laws can also hurt your company’s reputation with the public as well as with your employees.
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