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What are the requirements relating to advertising open positions?
Advertisements must not suggest a preference against applicants or independent contractors on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition (eg, cancer-related conditions or genetic characteristics), genetic information, marital status, sex, gender identity, gender expression, age (40 years and older), sexual orientation, or military and veteran status of any person.
What can employers do with regard to background checks and inquiries?
(a) Criminal records and arrests
As a general matter, employers are prohibited from making any non-job-related inquiry of applicants or employees that directly or indirectly expresses a limitation, specification, or discrimination about any protected characteristic. In addition to the federal Fair Credit Reporting Act governing the use of background checks in employment, California employers must also comply with certain requirements in the California Investigative Consumer Reporting Agencies Act and the California Consumer Credit Reporting Agencies Act.
An employer may not ask an applicant about any arrest or detention which did not result in a conviction (California Labor Code, §432.7). Neither can employers ask applicants to disclose information regarding a conviction for certain marijuana-related crimes or possession of certain drug-related paraphernalia when the conviction is more than two years old (California Labor Code, §432.8). With limited exceptions, employers may not ask for juvenile convictions or inquire or use information about juvenile arrests, detentions, or court dispositions in making an employment determination.
Los Angeles employers are subject to ban-the-box local laws which prohibit inquiries on criminal records until after a conditional job offer has been made. San Francisco employers cannot inquire about applicants’ criminal records until after the initial job interview.
(b) Medical history
As a general matter, employers may not inquire about any mental or physical disability or medical condition, but may ask the applicant if he or she can perform the essential functions of the job.
The Fair Employment and Housing Act prohibits employers from requiring applicants to take a medical or psychological examination before the initial job offer (California Government Code, §§ 12900-12996). After extending an initial job offer, the employer may ask the applicant to undergo a pre-employment medical exam or laboratory test, so long as it relates specifically to the essential functions of the job.
Background check reports may not include medical information without the employee’s or applicant’s authorisation (California Civil Code, §1786.12(f)).
(c) Drug screening
There is no specific statute on drug screening but California courts have generally permitted employers to require employees to pass a drug test as a condition of employment, so long as it tests all applicants and does not single out certain applicants due to protected characteristics. Note that employers in certain safety-sensitive industries such as transportation and aviation are subject to federal drug testing laws.
The California Supreme Court has held that an employer may refuse to hire an applicant who tests positive for marijuana even where it is prescribed for medicinal purposes (Ross v RagingWire Telecomms, Inc, 42 Cal 4th 920 (2008)).
(d) Credit checks
Under the California Consumer Credit Reporting Agencies Act, employers generally may not obtain a consumer credit report or perform a credit check of an applicant or employee except in limited circumstances, such as where the position of the person for whom the report is requested involves:
- a managerial position;
- access to confidential/proprietary information or regular access to $10,000 or more of cash belonging to the employer/customer/client; or
- regular access to individuals’ bank or credit card account information or date of birth, or in cases where the person is, or would be, either a named signatory on the employer’s bank or credit card account, authorised to transfer money on the employer’s behalf or authorized to enter into financial contracts on the employer’s behalf.
Before obtaining a consumer credit report for employment purposes, employers must give written notice to the consumer specifying the exemption it is using to obtain the report (California Civil Code, §1785.20.5; California Labor Code, §1024.5).
(e) Immigration status
The federal Immigration Reform and Control Act sets out certain requirements to establish authorization to work in the United States. California has additional requirements prohibiting employers from engaging in unfair immigration-related practices, such as using E-Verify to check a person’s authorisation status at a time or in a manner not required under federal immigration law, or in retaliation for a person’s exercise of his or her employment rights under the Labor Code.
Under the recently enacted Section 1019.1 of the Labor Code, employers may not:
- request more or different documents than required under federal law to verify work authorization status;
- refuse to honor documents that look genuine;
- refuse to honor documents or work authorizations based on the specific status/term accompanying the authorization to work; or
- attempt to re-investigate or re-verify an incumbent employee’s authorization to work using an unfair immigration-related practice.
A penalty of up to $10,000 per violation may be recovered by the applicant, employee or the labor commissioner.
(f) Social media
While there is no specific statute prohibiting retrieval or review of applicant or employee social media information, relying on such information to make employment decisions can raise a host of issues under the state’s anti-discrimination and privacy laws. For example, an employer may be liable for discrimination if it conducts a social media search which reveals an applicant’s protected characteristics and then relies on such information in deciding whether to hire.
In addition, Section 7 of the National Labor Relations Act prohibits employers from discriminating or taking adverse action against employees who engage in protected concerted activity, which may include online discussions of wages, hours or other working conditions.
California employers must also refrain from asking applicants to access a personal social media account in its presence and may not require employees to provide log-in information for their social media accounts (California Labor Code, §980(b)).
Employers may not demand or require applicants or employees to take a polygraph test nor request an applicant or employee to take a polygraph test without first advising him or her of rights under Section 432.2 of the Labor Code.
Likewise, California employers cannot use the results of applicant or employee HIV tests for employment purposes (California Health and Safety Code, §120980(f)).
Wage and hour
What are the main sources of wage and hour laws in your state?
The California Labor Code and the Industrial Welfare Commission Wage Orders are the statutory laws dealing with wage and hour issues.
Wage claims can be especially problematic because an employee who prevails on a wage claim is usually entitled to an award of reasonable attorneys’ fees in addition to any damages received. Employee wage claims are typically brought before a state government labor agency or through the federal or state civil judicial system.
What is the minimum hourly wage?
For employers with at least 26 employees, the state minimum wage is $10.50 as of January 1 2017, and will increase as follows:
- $11 per hour from January 1 2018;
- $12 per hour from January 1 2019;
- $13 per hour from January 1 2020;
- $14 per hour from January 1 2021; and
- $15 per hour from January 1 2022 (California Labor Code §1182.12).
Note that there are local ordinances with higher minimum wages (eg, $11.50 in San Diego).
What are the rules applicable to final pay and deductions from wages?
In California, an employee who is terminated by the employer for any reason must receive payment on the date of termination for all wages earned through the final day of employment (including all accrued but unused vacation entitlement) (California Labor Code, §201). If the employee resigns, the employer has 72 hours from the date of resignation to provide payment of final wages (California Labor Code, §202). An employer’s willful failure to pay an employee’s final wages in a timely manner can result in the imposition of a significant waiting time penalty, equal to one day of the employee’s wages for every day that payment is withheld, up to a maximum of 30 calendar days (California Labor Code, §203).
Hours and overtime
What are the requirements for meal and rest breaks?
Employees who work five hours or more per day must be provided with a duty-free uninterrupted 30-minute meal period. Meal periods must also be timely, meaning they are taken before the end of the employee’s fifth hour of work. If the employee is required to remain at the work site or facility during the meal period, then the meal period is on duty and must be paid. If a meal period is not provided, is interrupted or otherwise non-compliant, the employer must pay a premium equal to one hour of wages to that employee.
Employers must authorize and permit non-exempt employees to take a duty-free uninterrupted 10-minute paid, off-duty rest break for every four-hour work period or major fraction thereof. Rest breaks should be taken in the middle of the work period insofar as practicable. Employees working less than 3.5 hours are not entitled to a rest period.
What are the maximum hour rules?
Non-exempt employees must generally be paid 1.5 times the regular rate of pay for all hours worked over eight in a day up to and including 12 hours in any workday, as well as the first eight hours worked on the seventh consecutive day of work in a work week (California Labor Code, §510). Non-exempt employees must be paid double the regular rate of pay for work performed over 12 hours in any workday and over eight hours on the seventh consecutive day of work in a work week (California Labor Code, §510).
How should overtime be calculated?
The California Department of Labor Standards Enforcement relies on the Fair Labor Standards Act regulations to determine the regular rate of pay for the purposes of calculating overtime. The regular rate must include all remuneration for employment paid to or on behalf of an employee (Huntington Memorial Hosp v Sup Ct, 131 Cal App 4th 893, 902-05 (Cal Ct App 2005)). This typically includes hourly, salary and piecework earnings, commissions, on-call pay, non-discretionary bonuses (ie, production and attendance bonuses), shift differentials, the value of certain meals and lodging.
Payments generally not considered to be remuneration and therefore not included in the regular rate calculation include:
- payments for occasional periods when no work is performed (ie, holiday and sick pay);
- gifts and rewards for service that are not tied to hours worked;
- production or efficiency (ie, gifts for holiday/special occasions);
- discretionary bonuses (only if the employer has sole discretion over both the fact and amount of payment and the bonuses are not part of a contract or promise);
- payments under a bona fide profit-sharing plan or thrift or savings plan which is not tied to hours worked, production or efficiency (Title 29 of the Code of Federal Regulations, §§778.200-778.225; California Labor Code, §200(a); Department of Labor Standards Enforcement Manual, §§35.4.4, 35.7, 49.1 to 22.214.171.124 (2002)).
What exemptions are there from overtime?
Employees may be exempt from overtime if they satisfy the salary basis test (double minimum wage, currently $43,680) and their duties fall under the executive, administrative or professional exemptions. Unlike the federal exemption analysis, California employees are subject to a strict duties test, meaning that they must perform exempt job duties for over 50% of an employee’s working time in order to be exempt from overtime. This is a quantitative, not qualitative test and the exemption must be met every week.
California also recognizes limited exemptions applicable to:
- computer software professionals (as of January 1 2017, salary test of $42.35 per hour or at least $88,231.36 annually for full-time work) who primarily conduct systems analysis or design, develop, document, analyze, create, test or modify computer systems or programs;
- commissioned employees (with earnings which exceed 1.5 times the minimum wage and greater than 50% of earnings represent commissions); and
- outside salespersons (primarily engaged in sales activity and who spend over 50% of their working time away from the employer’s place of business).
What payroll and payment records must be maintained?
Employees must keep accurate information related to each employee (ie, name, address, occupation, social security number and date of birth), as well as:
- time records showing when the employee begins and ends each work period, meal periods, split shift intervals and total daily hours worked (rest periods and meal periods during which operations cease do not have to be recorded);
- payroll records showing total wages paid for each payroll period, including the value of any board, lodging or other compensation actually furnished to the employee;
- wage statements which should contain all of the information required under Section 226(a) of the Labor Code, including the balance of available paid sick leave available or paid time off/vacation time in lieu thereof;
- total hours worked in the payroll period and the applicable rates of pay; and
- for piece rate or incentive plan employees, the piece rates or an explanation of the incentive plan formula and accurate production records (Industrial Welfare Commission Wage Order No 15, § 7).
All required records must be written in English, properly indicate the month, day and year, and be kept on file for at least three years at the place of employment or at a central location in California (California Labor Code, §226).
Records of wage and wage rates, job classifications and other terms and conditions of employment must be maintained for all employees for at least three years (California Labor Code, §1197.5(d)).
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