California Labor Laws

Updated: 03/06/2020

California Minimum Wage

For 2020, California employers with at least 26 employees will pay minimum wages of $13/hour, and employers of 25 or fewer will pay $12/hour. These hourly rates will increase annually by $1/hour until all employers are paying $15/hour in 2023.

USA map with California superimposed

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History of California Labor Laws

California has a long history of trendsetting labor laws at the state level:

  • California was one of the first wave of states to introduce workers' compensation plans with voluntary workers' compensation plans in 1911 and legislation following quickly in 1913.
  • In 1937, California labor law and California employment law became one collection of rules — the California Labor Code.
  • Three years after the Federal OSH Act was enacted in 1970 (and partially due to the devastating 1971 explosion in the San Fernando Tunnel resulted in 17 worker deaths), California passed its own California Occupational Safety and Health Act.
  • In 1975, a farm labor law (the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975), followed to address concerns of migrant workers.
  • California also has strong laws to protect child actors in Hollywood, with the California Child Actor's Bill originally passed in 1939 and frequently updated to keep pace with the times.

Municipality Minimum Wage Laws

California allows its cities and counties to set their own minimum wage laws as long as they do not undermine state laws. However, while many cities have chosen to exercise that option, the law does not require a city to pass its own alternative minimum wage laws.

Los Angeles
The City of Los Angeles considers anyone who works at least two hours a week in the city to qualify for minimum wage under state or federal law. Like California, Los Angeles is raising its minimum wage to $15 per hour, but on a faster timetable.

City of Los Angeles minimum wage schedule:

Wage Effective Date Employers of 26 or more Employers of 25 or less
July 1, 2019 $14.25 per hour $13.25 per hour
July 1, 2020 $15 per hour $14.25 per hour
July 1, 2021 $15 per hour $15 per hour

Berkeley
On October 1, 2018, the City of Berkeley passed a minimum wage ordinance that put the statewide $15 per hour minimum wage rate into practice right away.

Effective July 1, 2019, that rate raised to $15.59 per hour. And, starting July 1, 2020, the wage will rise annually from the previous year's adjusted rate based on the Consumer Price Index.

Berkeley's statute applies to any employee who meets state or federal definitions of employee and who works at least two hours for an employer within the City of Berkeley during a week.

San Francisco
Like Berkely, San Francisco's minimum wage is $15.59 per hour. Starting July 1, 2020, this rate will increase from the previous year's rate based on adjustments following the Consumer Price Index so that the wage grows with the economy.

A small group of workers under 18 or over 55 who are in government-subsidized work or training programs are subject to a lower minimum wage of $13.79 per hour as of July 1, 2019.

San Diego
San Diego's minimum wage adjustments began most recently in 2016 and outpaced California rate hike schedules. However, the San Diego minimum wage adjustment period ends January 1, 2020, at $13 per hour without continuing to rise to the $15 per hour rate planned by the state in later years. If further adjustments are not approved, California state minimum wage will take over once it passes $13 per hour.

California Minimum Wage Law Exemptions

Workers not otherwise subject to minimum wage laws under federal rules may be exempt from California minimum wage rules in some cases.

Most common California minimum wage exemptions

Exempted Group Alternate Wage Requirement Explanation
Learners Entitled to at least 85% of the current minimum wage for the period during which they are designated as learners. Employees may be considered learners (regardless of age) in their first 160 days of employment if they have no prior experience that is similar or otherwise related to their job duties.
Mental and/or physically disabled a. Set individually by the commission if license approved.
b. Set by the commission on a facility basis.
a. Employers can request an annual special license to employ a mentally or physically disabled individual for less than minimum wage.
b. Employers who are nonprofit and operate sheltered work or rehabilitation facilities may request a facility license to employ mental and physically handicapped individuals at less than minimum wage.
Industry or occupation exemptions Varies by industry or occupation Some industries and occupations have alternative minimum wages set by California to address the challenges of those specific industries and occupations, such as outside salespeople.

California Posting Requirements

As of January 2020, California state law requires additional posters to the six federal posters.

These workplace posters must be displayed where they are easily accessible to employees. They must address minimum wage requirements, payday rules, sick leave, unemployment rights, and a number of discrimination and harassment rules that include protections against wrongful termination.

Required Posters

  • Minimum Wage
  • Payday Notice
  • Unemployment Insurance Poster
  • Unemployment Insurance/Paid Family Leave/Disability
  • Discrimination and Harassment
  • Safety and Health Protection on the Job
  • Emergency Numbers
  • Access to Medical & Exposure Records – (Industry-specific)
  • Rights as a Pregnant Employee (formerly “Notice A”)
  • Family Care/Medical Leave (formerly “Notice B”)
  • Workers’ Compensation (Injuries Caused by Work)
  • Time Off to Vote
  • Whistleblower's Protection
  • Paid Sick Leave
  • Transgender Rights in The Workplace

Tipped Wage in California

Unlike most states, California does not allow tipped employees to be paid a lower base minimum wage.

Employers must follow minimum wage rates for tipped employees at the same rate as set for other nonexempt workers. For 2020 that is $13/hour for employers of 26 or more and $12/hour for employers of 15 or less.

Employers may not use tips received by the employee or a tip pool as credit toward the minimum wage amount. California does allow tip pooling for the purpose of distributing tips to employees.

However, who can be included in the tip pool is limited to those considered in the "chain of service."

Those in the chain of service include cooks, dishwashers, cashiers, managers and supervisors. Bartenders, hosts, table bussers and servers are also generally considered in the chain of service.

Tips must be distributed in a way that is considered fair. Many employers use a method whereby distribution is based on the proportion of service each employee is expected to have provided to the customer, but California looks at every case individually when making a final determination of "fair" should a complaint be raised.

Not all funds left by the customer over the raw total are considered tips. For example, both federal and California law consider fees added to bills, such as "mandatory service charges," to be excluded from tips. The employer may keep these fees.

However, a 2014 change by the IRS may include some of those fees as wages to employees in certain cases. Also, while federal rules allow employers to reduce tips by the amount of credit card fees, California does not allow these reductions to tips.

Overtime in California

Overtime pay is mandatory in California for all covered workers (there are some exceptions such as special rules for agricultural workers).

Standards govern how many hours in a week, hours in a day, and days in a week can be worked before overtime pay is required.

Nonexempt workers over 18, as well as those 16 or 17 years old not required to be in school or otherwise prohibited from work, must be paid overtime.

Any hours worked from over 8, up to 12 hours in a single workday, up to 8 hours of work if working seven consecutive days in a single week, or any hours over 40, must be paid at 1.5 times the base wage rate. Any worked hours over 12 in a single workday or over 8 on the seventh consecutive day of work must be paid at double the base rate.

Employees on accepted alternative workweek schedules (a schedule that regularly requires more than 8 hours of work in a 24 hour period) may fall into exceptions or modifications to the standard California overtime rules.

For example, certain healthcare schedules that normally result in 10- to 12-hour days may not trigger normal overtime rules as long as double time is paid for hours worked over 12 in a day and time and a half is paid for hours over 40 in a workweek.

Full exceptions by industry and alternative schedule arrangements can be obtained from the California Department of Industrial Relations and include workers in categories such as camp counselors, personal attendants for nonprofit organizations, ambulance drivers, extras, minors, and sheepherders. Agriculture worker overtime pay is based on a separate set of regulations and do not all revolve around a 40 hour week, but is still subject to "statutory protections."

Child Labor Laws in California

In addition to federal law requirements under the Fair Labor Standards Act (FLSA), California does set wage and hour limits and conditions on minors working.

In January 1985, California passed the Omnibus Child Labor Reform Act (AB 1900), which updated rules on minor employment. AB 1900 covers both citizens and non-citizens who are minors and have not either graduated high school or gotten an equivalency certificate.

One notable change was that minors under 12 were barred from employment or even accompanying parents to workplaces considered hazardous to those under age 16. Specific work types considered hazardous are restricted and banned to minors based on age as well.

For jobs and industries deemed suitable for minor employees, minors must get a permit to work for the specific employer before work begins. The permit must be renewed annually.

Weekly hour restrictions and work during school sessions vary by age. In general, California allows minors between 14 and 17 to work while school is in session, but hours may be limited. Those aged 12 and 13 are prohibited from working while school is in session.

Minor pay is subject to normal minimum wage and overtime rules in California. Further, minors who have graduated high school (or obtained the equivalent certificate), or minors working certain late-night hours, must be paid as though they were an adult. Further, covered minors must be paid time and a half for all hours worked on a sixth consecutive workday.

There are special rules surrounding minors in the entertainment industry, including lower age workers. One of these additional requirements is sexual harassment prevention training and notification.

Employer Recordkeeping Requirements

California requires employers to keep certain records of when their employees work in addition to the federal FLSA, Equal Pay Act, and other federal law rules.

Start and stop times should be recorded for hourly nonexempt workers, along with mealtime starts and stops.

There is a four-year statute of limitations in California on class action lawsuits over labor and wages, so four-year storage of these records may be a good idea. California requires pay stubs to be kept at least three years under Labor Code section 226. California further requires personnel records and personnel files to be kept (and confidential) for at least three years after the date of termination as part of Labor Code 1198.5 (effective January 1, 2013).

Recent California Labor Law Updates

Family Care/Medical Leave - Mandatory - April 2019

Updated to reflect information on the New Parent Leave Act (NPLA). The NPLA requires employers with 20 or more employees to provide eligible employees with up to 12 weeks of unpaid, job-protected leave for the birth, adoption, or foster care placement of a child.

Minimum Wage - Mandatory - December 2018

Updated to reflect the 2019 rates of $12 per hour for employers with 26 or more employees and $11 per hour for employers with 25 or fewer employees, and it also includes the 2020 rates of $13 and $12 per hour. The meal and lodging credits table has also been updated.

Discrimination and Harassment - Mandatory - December 2018

The poster has been updated to reflect new training requirements. Employers with 5 or more employees and all public employers must provide training for all employees regarding the prevention of sexual harassment.

Unemployment/Disability/Paid Family Leave - Mandatory - July 2018

Information regarding filing a claim has been updated.

California Labor Law Frequently Asked Questions

California Combined Federal and State Kit plus Update Service

Have all of your state and federal required posters updated whenever the laws change.