California Compliance Checklist: The Key to Avoiding Lawsuits

Compliance with local, state, and federal laws is important, especially in a state like California, where local and state lawmakers are busy crafting new laws aimed at businesses and putting their own spin on federal workplace requirements. In many instances, California employers are subject to state laws that are significantly more favorable to workers than the equivalent federal law.

There are significant differences between CA state and federal laws.

California lawmakers have created significant differences between state and federal requirements in several different areas, including:

• Anti-discrimination protections
• Overtime
• Higher minimum wage
• Rest and meal breaks
• Family leave
• Sick leave

Many federal laws specifically state that covered employers must comply with state or local requirements if they provide greater benefits or protection.

California compliance: Broader anti-discrimination protections

Federal laws guarantee equal opportunity in the workplace for legally protected workers. Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against job applicants and employees on several grounds. Legally protected classes under Title VII include:

• Color
• National origin
• Race
• Religion
• Sex, including gender identity, pregnancy, and sexual orientation

Title VII applies to private employers with 15 or more employees. Local, state, and federal employers must also comply with federal law. Genetic information is also protected from discrimination under federal law. The Genetic Information Nondiscrimination Act of 2008 forbids employers from discriminating against employees or job applicants based on genetic information.

Protected classes in California

The Golden State has its own equal employment opportunity laws. California law forbids employers with 5 or more employees from engaging in workplace discrimination. Legally protected classes include:

• Age
• Color
• Gender identity/gender expression
• Genetic information
• Marital status
• Medical condition
• Military or veteran status
• National origin and ancestry
• Physical or mental disability
• Pregnancy (including childbirth and related medical conditions)
• Race (including hair texture and hairstyles)
• Religion
• Sex
• Sexual orientation

Legal experts have noted that California has a longer list of legally-protected classes than those protected under federal law. For example, there is no federal requirement that employers refrain from discriminating based on hair texture and hairstyles commonly associated with race.

There are more legally-protected classes in California compared to federal law.

However, a San Diego, California, employer was sued by a man who claimed that the state's CROWN Act had been violated. CROWN stands for "Create a Respectful and Open World for Natural Hair." Several cities and states have adopted CROWN Act laws. The anti-discrimination laws address bias against hairstyles commonly associated with race.

Higher minimum wage

California's required minimum wage is also more generous to workers than the federal minimum wage. The minimum wage under federal law is $7.25 an hour. In California, the minimum wage depends on the size of the employer. Smaller employers with 25 or fewer employees must pay workers $14 an hour. Larger employers with 26 or more employees must pay workers $15 an hour. Employees have taken employers to court, alleging that they violated state pay laws. For example, Aldi, a nationwide discount grocer, paid $2 million in 2020 to settle a class action lawsuit brought by California workers. The plaintiffs claimed Aldi violated state law requirements for minimum wage and overtime pay.

California compliance for meal and rest breaks

Federal law does not require that employers grant workers lunch or coffee breaks. However, when employers provide workers with rest breaks that last 20 minutes or less, federal law requires that workers be compensated for the breaks. If the break is 30 minutes or longer, then the break does not have to be paid as long as the employee is relieved of all work responsibilities. In 2020, several Army contractors agreed to pay $1.1 million to settle claims under the Fair Labor Standards Act (FLSA) that the workers should have been paid for 15-minute rest breaks. A California compliance checklist will consider additional requirements for meals and rest breaks. Non-exempt employees in the state must be given rest breaks and meal periods after working a set number of hours. A California employer must provide employees with a paid 10-minute rest break for every 4 hours worked. The rest breaks must be given as close to the middle of the work period as possible.

Federal law doesn't require lunch or coffee breaks, but these are required under CA law.

As for meal breaks, California employers must provide non-exempt employees with a 30-minute meal break if they work more than 5 hours a day. If the employee works more than 10 hours, a second meal break of at least 30 minutes must be provided. Red Robin restaurants in California agreed to pay $8.5 million to settle class action allegations that employers were not adequately compensated for meal and rest breaks.

Overtime in California

Under federal law, employers must pay workers 1.5 times the employee's regular rate of pay if the employee works more than 40 hours in a workweek unless an exemption applies. California has its own overtime pay rules. Employers must provide "daily overtime" to employees who work more than 8 hours a day and those who work on the 7th workday in a workweek. There is also a weekly overtime law. A California employer must pay non-exempt employees 1.5 times the employee's regular rate of pay for all hours worked over 40 in a workweek. But only one rule governs at a time, Natasha DeCourcy, an attorney in the Walnut Creek, California office of employment law firm Little Mendelson, told TriNet via email. One high-profile employer paid a hefty fine over allegations that Golden State compensation laws were violated. McDonald's paid $26 million in 2019 to settle claims that it violated California's overtime pay rules.

Paid family leave

There is no federal law mandating that private employers provide paid family leave, but California has a paid family and medical leave requirement. Unless expressly excluded by the regulation, all employers must offer up to 8 weeks of paid leave for the care of a child, spouse, parent, or domestic partner in certain described circumstances under the state mandate.

Unpaid family leave

California employers must also offer unpaid family and medical leave. Employers with 5 or more employees must provide the benefit. Employees can take up to 12 weeks of job-protected, unpaid leave to care for a family member. You can combine time off from work with up to 4 months of maternity leave. Federal law has an unpaid family leave requirement. The Family and Medical Leave Act requires that employers with 50 or more employees allow eligible workers to take unpaid, job-protected leave for up to 12 weeks in certain circumstances.

Paid sick leave

Unlike their federal counterparts, California lawmakers also require all Golden State employers to provide 24 hours of paid sick leave to eligible workers. California also has several local sick leave ordinances, and the local laws often differ from the state requirements. California employers must also follow many other leave laws such as bone marrow and donor organ leave, kin care leave, and family military leave.

Importance of a California compliance checklist

It's essential to keep up with the laws, rules, and regulations in a state like California, where lawmakers love to present businesses with employee-friendly obligations that, if not followed, can land an employer in court or lead to a damaged reputation. If you have several offices scattered across the U.S., it's important to have a compliance checklist for each state to avoid lawsuits and H.R. headaches later on.