California Employment Rights: Complete FAQ

As of January 1, 2024, California's statewide minimum wage is $16.00 per hour for all employers regardless of size.

However, many cities and counties have higher local minimum wages:

• San Francisco: $18.67/hour
• Los Angeles (City): $16.78/hour
• San Jose: $17.55/hour
• Oakland: $16.50/hour
• Berkeley: $18.07/hour

California overtime is calculated using a daily AND weekly threshold - you get overtime based on whichever calculation is more favorable to you:

• 1.5x regular rate: Hours over 8 in a workday OR over 40 in a workweek
• 2x regular rate: Hours over 12 in a workday OR over 8 on the 7th consecutive workday

Your regular rate is not just your base hourly wage - it includes:

• Base hourly pay
• Non-discretionary bonuses (production bonuses, attendance bonuses)
• Commission payments
• Shift differentials
• Piece-rate compensation

Example calculation: If you earn $20/hour base + $200 weekly production bonus, your regular rate for a 40-hour week is ($800 + $200) / 40 = $25/hour. Overtime is $37.50/hour (1.5x) or $50/hour (2x).

California has strict final paycheck deadlines under Labor Code Sections 201-202:

• Fired, laid off, or discharged: All wages due immediately at the time of termination
• Quit with 72+ hours notice: All wages due on your last day of work
• Quit without notice: All wages due within 72 hours
• Seasonal employment ending: Within 72 hours or immediately if employment is over

Example: If you earned $200/day and your employer paid your final check 15 days late, you could recover $3,000 in waiting time penalties on top of your unpaid wages.

Under Labor Code Section 512, California employees are entitled to unpaid meal breaks:

• First meal break: 30 minutes if you work more than 5 hours
• Second meal break: 30 minutes if you work more than 10 hours

Critical requirements for compliant meal breaks:

• Must be at least 30 consecutive minutes
• Must be duty-free (completely relieved of all duties)
• Must be taken before the end of the 5th hour of work
• Employee must be free to leave the premises
• Cannot be interrupted for work tasks

Penalty calculation: One hour of premium pay at your regular rate for each workday a compliant meal break was not provided. If you earn $20/hour and were denied meal breaks on 100 workdays, that's $2,000 in penalties.

California requires paid 10-minute rest breaks for every 4 hours worked (or major fraction thereof):

• 3.5 to 6 hours worked: 1 rest break
• 6 to 10 hours worked: 2 rest breaks
• 10 to 14 hours worked: 3 rest breaks

Key requirements:

• Rest breaks are paid time
• Must be in the middle of each 4-hour work period when practicable
• Employees must be relieved of all duties
• Employers cannot require employees to remain on-site

Meal break waivers are permitted only in limited circumstances:

First meal break waiver:

• Only if your shift is 6 hours or less
• Must be by mutual consent - employer cannot require waiver
• Should be documented in writing

Second meal break waiver:

• Only if shift does not exceed 12 hours
• Only if you took the first meal break
• Must be by mutual written consent

On-duty meal periods: These are only permitted when the nature of the work prevents relief from all duties AND there's a written agreement that can be revoked at any time. This is rare and typically applies only to specific jobs like sole security guards.

Yes. Under California law, accrued vacation and PTO are considered earned wages that must be paid upon termination.

Key rules:

• All accrued, unused PTO/vacation must be paid out at your final rate of pay
• Applies whether you quit, are fired, or are laid off
• "Use it or lose it" policies are illegal in California
• Employers cannot forfeit already-earned vacation time
• Failure to pay out PTO triggers waiting time penalties under LC 203

What employers CAN do:

• Cap accrual (e.g., stop accruing at 200 hours until some is used)
• Set reasonable accrual rates
• Require waiting periods before accrual begins

Under Labor Code Section 2802, California employers must reimburse employees for all necessary business expenses incurred in performing their job duties:

• Cell phone usage: Proportionate share if you use personal phone for work
• Home internet: Reasonable portion for remote work requirements
• Mileage: For business driving (typically at IRS rate)
• Tools and equipment: Required for the job
• Uniforms: Purchase, maintenance, and cleaning costs
• Work-related travel: Transportation, lodging, meals
• Home office equipment: If required to work from home
• Software/subscriptions: Required for work tasks

For 2024, the IRS standard mileage rate is 67 cents per mile for business driving.

Key points about mileage reimbursement in California:

• While California doesn't mandate a specific rate, reimbursement must cover actual costs
• Most employers use the IRS rate as a safe harbor
• Employers can use a lower rate only if they can prove actual costs are less
• Commuting to your regular workplace is NOT reimbursable
• Driving between work locations during the day IS reimbursable

What counts as business miles:

• Driving between client sites or job locations
• Trips to the bank, post office, or supply store for work
• Travel to meetings, conferences, or training
• Delivery or transportation for work purposes

California uses the ABC test under AB 5 to determine worker classification. You're presumed to be an employee unless the hiring entity proves ALL three factors:

• (A) Freedom from control: You're free from control and direction in performing work, both contractually and in fact
• (B) Outside usual business: You perform work outside the usual course of the hiring entity's business
• (C) Independent business: You're customarily engaged in an independently established trade, occupation, or business of the same nature

Misclassified workers can recover substantial damages including:

• Unpaid overtime: All hours over 8/day or 40/week at 1.5x-2x rate
• Minimum wage differences: If your effective hourly rate fell below minimum wage
• Meal break penalties: 1 hour pay per day when denied
• Rest break penalties: 1 hour pay per day when denied
• Unreimbursed expenses: Mileage, phone, equipment, etc.
• Waiting time penalties: Up to 30 days' pay
• Wage statement penalties: Up to $4,000
• PAGA penalties: Recoverable on behalf of all aggrieved employees

Statute of limitations: 3 years for most Labor Code violations, 4 years for UCL claims. Act promptly to maximize recovery.

Generally no. California law does not require severance pay. However, it may be required if:

• Your employment contract promises severance
• A collective bargaining agreement provides for it
• Company policy establishes a severance program
• The employer made promises you relied on

Why employers offer severance: In exchange for you signing a release of claims, giving up your right to sue for potential violations. The more potential claims you have, the more leverage for negotiating higher severance.

Absolutely. Severance is almost always negotiable, especially if you have potential legal claims. Consider negotiating:

• Higher payment: Especially if you have wage, discrimination, or retaliation claims
• Extended health insurance: COBRA subsidy or premium payments
• Neutral reference letter: Pre-agreed language for future employers
• Extended equity vesting: Acceleration of stock options or RSUs
• Outplacement services: Career coaching, resume help
• Non-disparagement modifications: Make it mutual
• Unemployment cooperation: Employer won't contest claim

No. Non-compete agreements are void and unenforceable in California - even if you signed one.

What the law says:

• B&P Code 16600 voids any agreement that restrains someone from engaging in a lawful profession, trade, or business
• SB 699 (effective January 1, 2024): Makes it unlawful for employers to even enter into or attempt to enforce non-competes
• Applies to agreements signed in other states if you work in California
• Employers must notify current and former employees (employed after Jan 1, 2022) that existing non-competes are void

It depends on what the agreement restricts:

Non-solicitation of employees:

• Generally unenforceable under the same B&P Code 16600 principles
• Courts have increasingly struck these down as indirect non-competes
• Employees are free to recruit former coworkers to new opportunities

Non-solicitation of customers:

• More nuanced - may be enforceable in very limited circumstances
• Only if it protects legitimate trade secrets, not just customer relationships
• Customer lists and relationships alone are typically not protectable
• The narrower and more time-limited, the better chance of enforcement

While California is an at-will employment state, termination is wrongful if based on:

Discrimination (FEHA):

• Race, color, national origin, ancestry
• Sex, gender, gender identity, gender expression
• Sexual orientation
• Religion, religious creed
• Age (40+), disability, medical condition
• Marital status, military/veteran status

Retaliation for protected activities:

• Reporting Labor Code violations (LC 1102.5)
• Filing workers' compensation claims
• Taking FMLA/CFRA leave
• Reporting safety violations (OSHA)
• Whistleblowing on illegal conduct
• Filing wage claims or complaints

Other wrongful termination:

• Refusing to commit illegal acts
• Exercising legal rights (voting, jury duty, military service)
• Breach of implied contract
• Breach of covenant of good faith and fair dealing

Deadlines vary by claim type - act promptly to preserve your rights:

Claim Type	Deadline
FEHA discrimination/harassment	3 years to file with CRD, then 1 year after right-to-sue
Labor Code retaliation (LC 1102.5)	3 years
Breach of written contract	4 years
Breach of oral contract	2 years
WARN Act violations	3 years
Wage claims	3-4 years

Filing a wage claim with the Division of Labor Standards Enforcement (DLSE) is straightforward:

Step 1: File your claim

• Online at dir.ca.gov/dlse/howtofilewageclaim.htm
• In person at your local Labor Commissioner's office
• By mail to the appropriate office

Step 2: Include complete information

• Your name, address, and contact information
• Employer name, address, and contact information
• Dates of employment
• Detailed list of all unpaid amounts with dates
• Supporting documents (pay stubs, timesheets, contracts)

Step 3: DLSE investigates

• Deputy reviews your claim
• Attempts informal settlement with employer
• If no settlement, schedules a Bolin hearing

A Bolin hearing is an administrative trial before a Deputy Labor Commissioner:

What to bring:

• All evidence (pay stubs, timesheets, contracts, emails)
• Witnesses who can testify to the facts
• Clear calculation of all amounts owed
• Copies for yourself, the employer, and the hearing officer

Hearing process:

• Less formal than court but follows evidentiary rules
• You present your case first (testimony, documents)
• Employer responds and presents their defense
• Both sides can ask questions
• Typically lasts 1-3 hours

After the hearing:

• Deputy issues an Order, Decision, or Award (ODA) within ~15 days
• Either party can appeal to Superior Court within 10 days
• Appeals result in a trial de novo (completely new trial)

Timeline varies significantly based on case complexity and DLSE backlog:

Stage	Typical Timeline
Initial processing	2-4 weeks
Settlement conference	4-8 weeks after filing
Bolin hearing (if no settlement)	3-6 months from filing
Decision after hearing	~15 days
Total (typical)	6-12 months

If appealed to Superior Court: Add another 12-18 months for trial scheduling and proceedings.

The best option depends on your situation:

DLSE Wage Claim - Best for:

• Straightforward wage claims (unpaid wages, overtime, break violations)
• Claims where you need investigation help
• Situations where you can't afford an attorney
• Pros: Free, staff helps investigate, no attorney needed
• Cons: Can be slow, limited remedies

Small Claims Court - Best for:

• Claims under $12,500 (or $6,250 for business plaintiffs)
• Straightforward cases with clear evidence
• When you want faster resolution
• Pros: Quick (2-3 months), direct decision
• Cons: Must prove your own case, no attorneys allowed

Hire an Attorney - Best for:

• Claims over $12,500
• Complex misclassification cases
• Discrimination, harassment, or retaliation claims
• Whistleblower cases
• When employer has attorneys
• Pros: Maximize recovery, handle complexity, attorney fees recoverable
• Cons: May require contingency fee (typically 33-40%)

An effective demand letter for unpaid wages should include:

Header information:

• Your name, address, and contact information
• Date sent
• Employer's name and address
• "VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED"

Body content:

• Your dates of employment and position
• Specific Labor Code sections violated (cite them)
• Detailed calculation of amounts owed:
  • Unpaid regular wages
  • Unpaid overtime
  • Meal break penalties
  • Rest break penalties
  • Waiting time penalties
  • Unreimbursed expenses
• Reference to supporting evidence
• Clear deadline (typically 10-14 days)
• Statement of intent to pursue DLSE claim and/or lawsuit if not resolved

See our unpaid wages demand letter guide

Under Labor Code Section 226, employers must provide accurate itemized wage statements. Common violations include:

• Missing total hours worked
• Incorrect pay rates
• Wrong employer name or address
• Missing pay period dates
• Incomplete deduction information
• Missing employee ID or last 4 of SSN

Penalties:

• $50 for the first violation
• $100 for each subsequent violation per pay period
• Maximum of $4,000 total

Statute of limitations varies by claim type:

Claim Type	Deadline
Unpaid wages (statutory)	3 years
Overtime violations	3 years
Meal/rest break penalties	3 years
Written contract claims	4 years
UCL (unfair competition) claims	4 years
PAGA penalty claims	1 year from most recent violation

Yes. California provides for one-way attorney fee shifting in wage cases:

• If you win, the employer pays your reasonable attorney fees
• If the employer wins, they typically cannot recover fees from you (unless your claim was frivolous)

PAGA (Private Attorneys General Act) allows employees to sue as private attorneys general to recover civil penalties on behalf of themselves and ALL aggrieved employees.

Penalty amounts:

• $100 per employee per pay period for initial violations
• $200 per employee per pay period for subsequent violations
• 75% goes to the Labor and Workforce Development Agency (LWDA)
• 25% goes to aggrieved employees

Process:

1. Give 65-day notice to LWDA and your employer
2. If LWDA doesn't investigate within 65 days, you can file suit
3. Case covers all employees affected by the same violations

Maintain comprehensive records to support your claim:

Essential documents:

• Pay stubs: Employers must provide under LC 226
• Your own time records: Clock-in/out times, actual hours worked, breaks taken
• Employment documents: Offer letters, contracts, job descriptions
• Employee handbook: Company policies on pay, breaks, expenses
• Communications: Emails, texts, or voicemails about pay or hours
• Expense receipts: All business expenses you paid personally
• Mileage logs: Dates, destinations, business purposes, miles

No. California law provides strong protections against retaliation:

Protected activities include:

• Filing a wage claim with DLSE
• Complaining about wage violations to your employer
• Testifying in a coworker's wage claim
• Refusing to violate labor laws
• Discussing wages with coworkers

Retaliation includes:

• Termination
• Demotion or discipline
• Reduced hours or unfavorable schedule
• Negative performance reviews
• Hostile work environment

Employer financial difficulties do not excuse wage obligations. Wages are earned and must be paid regardless of business circumstances.

If the company is struggling:

• Act quickly before assets disappear
• Consider filing a lien on business property
• Wage claims have priority in bankruptcy (up to limits)

If the company goes bankrupt:

• File a claim with the Employment Development Department (EDD)
• Apply for payment from the State Wage Claim Fund (up to $7,500)
• File a proof of claim in the bankruptcy case

Create a comprehensive damages calculation by adding all applicable categories:

1. Unpaid Regular Wages

• Hours worked x regular hourly rate
• Include any unpaid final wages

2. Unpaid Overtime

• Hours over 8/day or 40/week x 1.5x rate
• Hours over 12/day or 8 on 7th day x 2x rate
• Remember to calculate proper regular rate (including bonuses)

3. Meal Break Penalties

• 1 hour of pay x number of days with violations
• Maximum one hour per day regardless of multiple missed breaks

4. Rest Break Penalties

• 1 hour of pay x number of days with violations
• Separate from meal break penalties

5. Waiting Time Penalties

• Daily rate x days late (up to 30 days)
• Applies if final paycheck was late

6. Wage Statement Penalties

• $50 first violation + $100 each subsequent
• Up to $4,000 maximum

7. Unreimbursed Expenses

• All documented business expenses
• Mileage at IRS rate

8. Interest

• 10% per year on unpaid wages

9. Attorney Fees (if applicable)

Use our California Wage Damages Calculator