California HR Compliance
for Small Businesses

The minimum wage in California is $16.90/hour (Jan 1, 2026). Fast food: $20.00. Healthcare: $25.00 (large hospitals July 1, 2026). LA City: $18.42 (July 1, 2026).. California does not allow a tip credit — tipped workers must receive the full minimum wage. Exempt salaried employees must earn at least $70,304/year (2x min wage x 2080hrs) annually. Always verify the current rate at the start of each calendar year — many state rates are indexed to CPI and adjust annually.

In California: involuntary terminations — IMMEDIATE at time of termination. Voluntary resignations — Last day of work (if 72+ hours notice given). Penalty for late payment: 1 day wages per day late, up to 30 days (Cal. Lab. Code 201-203). Accrued PTO must also be paid out on separation — PTO = wages in CA. Must pay out at termination.. Never hold a final paycheck over unreturned equipment or unsigned paperwork — that exposes you to wage claims regardless of the circumstances.

Yes. California requires paid sick leave. 5 days/40 hours per year. Expanded 2024 to include jury duty and witness appearances.. Track accrual, carryover rules, and permissible uses carefully — enforcement actions typically follow audits of smaller employers with incomplete records.

Yes. California has a state paid family and medical leave program. California Paid Family Leave: state-administered wage replacement. CFRA: 12 weeks unpaid job-protected leave for 5+ employees.. Understand your contribution obligations, posting requirements, and how the program coordinates with any employer-sponsored short-term disability policy.

Yes. California requires pay transparency in job postings. SB 1162: 15+ employees must include pay ranges in job postings. SB 642 (2026): broadens wages definition to include bonuses, stock options, allowances.. Non-compliance can result in fines and enforcement action — audit all active job listings and internal promotion announcements to ensure full compliance.

FULL BAN. Bus. & Prof. Code 16600. Violations = unfair competition, $2,500/violation. Applies regardless of where signed. Audit and void any existing noncompetes with affected employees before enforcement action or litigation.

California uses the following test to determine worker classification: ABC test (AB 5). Workers presumed employees. Very strict.. Misclassification exposes employers to back taxes, penalties, and liability for benefits and wage-hour violations. When in doubt, consult counsel before engaging contractors for ongoing work.

No. California prohibits employers from asking job candidates about their prior salary or compensation history. Violations can result in discrimination claims and enforcement penalties. Train your recruiters and update any intake forms, application portals, or interview scripts that still ask about prior pay.

Meal breaks: 30-min unpaid before 5th hour; second before 10th hour. $1 premium per missed break.. Rest breaks: 10-min paid per 4 hours worked. $1 premium per missed break.. Missing a required break can trigger a premium pay penalty — make sure managers understand that breaks are mandatory, not optional, and document compliance in timekeeping records.