CALIFORNIA LABOR & EMPLOYMENT LAW GUIDE

Employee Handbook

An employee handbook is not just useful to the organization of a business, it is also a powerful text that you can refer to when policies require clarification or reference. Although you can never predict the questions that will arise during the day to day operations of a business, employees often have the reasonable expectation that they will receive a handbook dictating workplace policies.

Is my employer required to distribute a handbook?

In the state of California, your employer is not required to have a handbook. However, if a handbook exists, it must include policies about written harassment, discrimination, and retaliation prevention policy. Additionally, employers who fall under the jurisdiction of FMLA and CFRA must outline a leave program compliant with regulations.

Can my employee handbook establish a drug-free workplace?

Yes, it can. Although California has legalized recreational marijuana, a private business still has the legal right to create and enforce drug-free policies. (To read more on this issue: Drug and Alcohol Testing)

Can my employee handbook override laws on meal and rest breaks?

Absolutely not. The California Supreme Court has ruled that employers must have a compliant meal and rest break policy. You should be able to review the policy in the employee handbook to ensure compliance.

Finally, it’s important to review and revise employee handbooks annually to reflect a changing technology and social landscape.

Drug and Alcohol Testing

California legalized recreational marijuana at the beginning of 2018. Since then, we’ve seen a variety of questions about workplace drug and alcohol testing.

Can my employer drug test me?

In the state of California, your employer has the right to administer drug tests. California courts review drug-testing cases individually to determine whether the testing was lawful. In some industries and professions, you may be subject to more strict testing policies. For example, aviation and engineering professionals can generally be tested more frequently than employees in other industries. The reason for this policy is that their drug use could reasonably affect public health and safety.

Can my job offer be rescinded for marijuana use?

During the hiring process, it is fully within the rights of an employer to perform a routine, suspicionless drug test. Although you would not suffer legal action for your recreational or medical marijuana use, the California Supreme Court ruled in Ross v. Ragingwire that employers still have the right to enforce their policies on a drug-free workplace. Thus, if you receive a conditional offer of employment, it can be rescinded following a drug test.

Can I be fired for using recreational marijuana?

The answer to this question depends on your employer and their existing policies. If your employer wishes to maintain a drug and alcohol-free workplace, they have the right to enforce that policy. The only requirement is that the policy is clearly and fairly outlined in the employee handbook or otherwise made available.

Furthermore, some private businesses that receive grants or contracts from the state government are actually required to ensure a drug-free workplace as a result of the California Drug-free Workplace Act of 1990. Similarly, if your company does work for the federal government or receives federal grants, they must also ensure a drug-free workplace as a result of the Drug-free Workplace Act of 1988.

Why can my employer take action against me if I’m not breaking the law?

It’s important to make a distinction between legal and private action. In this case, your employer cannot take legal action against you for exercising your lawful rights. Although the law does protect “lawful off-duty conduct” as stated in Labor Code section 96, 98.6, the California courts have yet to protect marijuana use under this policy. Furthermore, the law which legalized marijuana stated that it should not be interpreted as preventing or deterring employers from complying with state or federal law. This means that before you use drugs or alcohol, it’s important to check your employee handbook.

Family Medical Leave Act (FMLA)

The Family Medical Leave Act is a federal law that provides protection for employees who need to take an extended and unpaid leave of absence to attend to family or medical concerns. There are a lot of specifics to know with this federal law. We’ve answered some common questions below:

Does everyone qualify for FMLA?

You may not automatically qualify just because you have employee standing in your company. Only employers with fifty or more employees are legally required to comply with the act. This means that some small businesses will not be required to provide the leave when requested.

It’s also important to note that you must have been employed for at least twelve months preceding the request for leave.

What circumstances does the FMLA cover?

FMLA leave grants the right to take up to twelve weeks of unpaid leave to attend to any of the following circumstances:

• Birth or adoption of a child
• Caring for a spouse or family member with a serious health condition
• Providing care or attention to your own health condition

What exactly does the FMLA require?

One of the most important things to note is that this is not paid leave. You are simply entitled to take the time off with no reduction in title, salary, benefits or other terms of employment. You cannot be denied your previous position following FMLA leave, except under an extremely specific set of circumstances in which you are considered a “key” employee. An employment attorney can help determine whether your federal rights have been violated in regard to FMLA leave.

California Family Rights Act (CFRA)

In addition to the Family Medical Leave Act (FMLA), California labor law also offers additional protection for employees. The California Family Rights Act (CFRA) is very similar to the FMLA in terms of content, but generally offers clarifications regarding questions employers have had about the limits of the FMLA. To be clear, any leave which qualifies under the FMLA, would apply towards both CFRA and FMLA leave time allotments.

Does everyone qualify for CFRA?

You may not automatically qualify just because you have employee standing at your company. Only employers with fifty or more employees are legally required to comply with the act. This means that some small businesses will not be required to provide the leave when requested.

It’s also important to note that you must have been employed for at least twelve months preceding the request for leave.

What circumstances does the CFRA cover?

CFRA leave grants the right to take up to twelve weeks of unpaid leave to attend to any of the following circumstances:

• Birth or adoption of a child
• Caring for a spouse or family member with a serious health condition
• Providing care or attention to the employees own health condition

Can I combine CFRA with paid leave?

In some cases, you can combine CFRA with paid leave. In practice, what this means is that the time you are absent will count toward both your maximum PTO and maximum CFRA allowance.

What exactly does the CFRA require?

One of the most important things to note is that this is not paid leave. You are simply entitled to take the time off with no reduction in title, salary, benefits or other terms of employment. You cannot be denied your previous position following CFRA leave, except under an extremely specific set of circumstances in which you are considered a “key” employee. An employment attorney can help determine whether your rights were violated in regard to CFRA leave.

What do I do if I’m unsure whether I meet eligibility requirements?

California labor law can be difficult to understand, so it’s best to review only government regulated sources of information. If you have questions, consult the FAQ on the official Fair Employment and Housing website.

Employee Termination

One of the most important facets of protecting employees is establishing guidelines on lawful termination. Employee termination follows a specific procedure in order to avoid public policy violations and wrongful termination lawsuits.

What does “at-will” employment mean for me?

As you may know, California labor law dictates that we are an at-will state. This generally means that either the employer or the employee may terminate the employment for any reason and at any time. That said, the judicial system has previously upheld exceptions to this rule. Additionally, mutually agreed upon contracts and union agreements can override the “at-will” agreement. If your company has an employee handbook, this should also offer guidelines for termination.

Is there a difference between a lay-off and a termination?

Although the terms are often used interchangeably, there is actually a distinct semantic difference between layoffs and termination. If you are laid off, that means your employer will be eliminating your position rather than rehiring. If you are terminated, that means another employee will be hired to take over your position.

When do I have to be notified of termination or layoffs?

If you are being laid off, the Worker Adjustment and Retraining Notification Act requires that your employer notify you at least 60 days prior to the end of employment. If you are being terminated, California Unemployment Insurance Code 1089 requires employers to give written notice immediately upon termination, but it does not require your employer to give you advance notice.

For what reasons may my employer terminate me?

Your employer has an implied responsibility to base termination decisions strictly on job performance and the needs of the business at large. The reason for termination should be clearly outlined and defensible. Ideally, it should also be reflective of previous performance reviews or documented errors. You cannot be terminated based on any protected characteristics, such as gender, sexual orientation, physical disability, religious expression, or race. You also cannot be terminated as retaliation for whistleblowing or for reporting unlawful employment practices.

Can my employer terminate me based on a positive drug test for marijuana?

The recent legalization of recreational marijuana has raised questions for both employers and employees. Although marijuana is now legal in the state, it is still a Schedule 1 substance according to federal law. The legalization is not intended to override the rights of your employer to enforce a drug-free workplace. At this time, you can still be lawfully terminated for testing positive for marijuana use. However, it is worth noting that some laws do protect employees from being terminated on the basis of lawful private activities they’re engaged in outside of work. At this time, those laws do not encompass marijuana use, although future court cases may affect this decision.

What are my options if I believe I was wrongfully terminated?

Following the event, you have the right to file a wrongful termination lawsuit. This lawsuit can name your employer, the managers involved in the termination decision and even coworkers. You should consult with a wrongful termination attorney to determine the best course of action. At Blackstone Law, we’ve successfully represented employees in many wrongful termination suits. We are happy to discuss your case at no cost to you.

Exempt and Non-exempt Employees

California employment law operates much like the justice system. In a court case, you are innocent until proven guilty. In California, you are a non-exempt employee unless otherwise specified. This entitles you to certain protections and subjects your employer to specific regulations.

What is a non-exempt employee?

A non-exempt employee is any employee who is subject to standard wage, rest, and overtime laws. Most employees are considered non-exempt.

What is an exempt employee?

An exempt employee is “exempt” from one or more standard wage, rest, and overtime laws. In order to be classified as exempt, your employer must prove that you plainly and unmistakably meet the requirements for exemption. If you are an exempt employee, your employer is not required to adjust your pay to account for overtime or minimum wage laws.

Why might I be misclassified?

Issues with employee misclassification typically arise as a result of a deliberate avoidance of wage and overtime law. You may also be misclassified in error. Some employees are eligible only for partial exemption. In this case, if you are rightfully exempt from some but not all wage laws, you may have been unintentionally misclassified.

How do I know if I should be considered an exempt employee?

At a glance, to qualify as an exempt employee, you must meet the following criteria:

• Paid a salary of AT LEAST $45,760 for companies with 26 or more employees or $43,680 for companies with 25 or fewer employees. (As of January 1, 2018)
• Primary duties are administrative or managerial
• Regularly exercise independent judgment and discretion

The above is a very simplified version of the main exemption requirements pertaining to a minimum salary and job duties. Some professions have their own set of exemption regulations. These include physicians, computer professionals, salespeople, private school teachers, and union employees.

What are the specific salary requirements for an exempt employee?

An exempt employee receives a salary rather than hourly pay. The law does not require that an exempt employee receive overtime, but they instead must be paid a salary that is at least twice the state or federal minimum wage for full-time employment. In California, the state minimum wage is substantially higher than what is required by federal law. As a result, the minimum salary is determined by looking at state requirements. These requirements vary based on the size of the employing company. Additionally,  minimum wage increases every year, which means the minimum salary of exempt employees must be adjusted yearly.

What are the specific duty requirements for exempt employees?

The specific duties of an exempted employee can be a bit harder to qualify. Generally, the duties must be administrative or managerial, meaning that they are non-manual and are integral to management or general business operations. You may also evaluate whether or not the employee can make hiring or firing decisions, or whether the employee directs the work of others.

Are there exceptions to the above rules?

There are multiple exceptions to the classification rules above. For example, commissioned employees only need to be salaried at a rate of one and a half times the state minimum for full-time employment. Computer professionals may qualify for exemption only if their salary is at least $88,231.36 per year. The law is so complex regarding employee exemption, we recommend you consult with an employment attorney if you are unsure about your status.

What happens if I was misclassified?

If you were misclassified, you are likely eligible for a substantial wage claim through the Division of Labor Standards Enforcement. This claim might include unpaid overtime, rest periods and meal break penalties, waiting time penalties, and pay stub penalties. Although it may be possible to resolve the wage dispute with your employer, take caution to document everything in order to prevent future retaliation. The law requires employers to err on the side of non-exemption when doubt exists regarding the employee’s rightful classification. If you believe you may have been misclassified, you could benefit from consulting an employment attorney. We also suggest speaking with an employment attorney before approaching your employer with your concerns. They will be able to advise you on your specific situation and can help protect you if your case goes to court.

If I believe I may have been misclassified, where can I go to learn more?

The California Department of Industrial relations offers additional information on exempt employee classification. An employment attorney can also assist in clarifying California labor law.

Overtime Pay

California labor law is designed to protect the rights of employees to earn a living wage within a standard workweek. One major component of wage law is overtime pay.

What is overtime pay?

Overtime pay is an adjusted rate of pay earned for every hour in excess of eight hours a day or 40 hours in a workweek.

Who can receive overtime pay?

Any worker who is over the age of 18 and is not specifically exempt under the exemption classifications is entitled to overtime pay. In some specific cases, an individual who is 17 or 16 and is not required to be in school is also eligible provided they meet all other criteria. All non-exempt employees are eligible and entitled to overtime pay by default.

How can I calculate overtime?

The overtime rate cannot be less than 1.5x times the state minimum wage. In cases where the employee typically receives more than the state minimum wage, they are entitled to 1.5x times their usual rate. For every hour worked in excess of 12 in any workday, the employee is entitled to 2x times their usual pay. California presumes that no one is exempt from overtime laws unless specifically exempted in their employment agreement.

I worked overtime but it wasn’t authorized in advance. Can I still receive the overtime rate?

There are many circumstances that can necessitate overtime, and not all of them are foreseeable. Even if your employer did not authorize the overtime in advance, you are still entitled to your usual overtime rate. The absence of prior authorization does not enable your employer to withhold wages you are owed for hours worked. Unfortunately, your employer may still discipline you for working unauthorized overtime.

Can you earn overtime if you are salaried?

Even if you are a salaried employee, you earn overtime pay unless you meet all exemption criteria. To learn more, we suggest visiting the official website of the State of California’s Department of Industrial Relations. This will help you learn more about exemptions.

Meal & Rest Breaks

Short periods of rest and time to eat meals are integral to the productive functioning of any employee. California employment law includes specific provisions in order to protect employee rights to meals and rests. Although there are some industries, such as the entertainment industry, which are subject to different regulations, the following rules are generally applicable:

How are meal and rest breaks defined?

A meal period is defined as a stretch of time, not less than thirty minutes in which an employee is relieved of all duties and free to leave the premise. There are some professions that will necessitate an “on-duty meal period.” In an on-duty meal period, the employee cannot leave the premise or be relieved of all duties while they eat. A rest break is a 10-minute period of rest. It should generally fall in the middle of the work period as long as the nature of the job allows for it.

What meal and rest breaks am I entitled to?

You are entitled to a meal break of no less than 30 minutes every time that you work a shift longer than five hours. California labor law dictates that you must be relieved of all duties and free to leave during your 30-minute meal period. If this is not the case, under CA Labor Code Section 512 the meal period must be paid at the regular rate of pay. It is possible to waive your right to meal and rest periods. However, this must be done through a written agreement and cannot be coerced by your employer. Additionally, you are entitled to a 10-minute rest period for every four hours that you work. In a typical 8-hour shift, you would be entitled to two 10-minute rest periods. The rest periods are always paid.

If my employer fails to provide meal and rest breaks, how do I proceed?

In the case of Murphy v. Cole, the California Supreme Court held that employees must be compensated with one additional hour of pay for every meal and rest period violation. If your employer fails to pay after being alerted of their legal responsibility, you may then file a wage claim with the Division of Labor Standards Enforcement.

Remember, you are also entitled to the pay if your meal period or rest period was interrupted. You can also file a claim if you were discouraged from taking time away from your duties. Even if your meal period is generally unpaid, you are owed compensation.

Is there a statute of limitations for missed meal periods and rest breaks?

If your right to meal and rest periods were violated, you can file a wage claim with the Division of Labor Standards and Enforcement. Even if your meal periods are typically unpaid, you are rightfully owed an hour of regular wages for every missed or interrupted meal period. This is also the case for missed rest breaks. California wage law treats missed meal and rest periods as if they were unpaid wages. As a result,  the statute of limitations for filing a claim is 3 years.

What industries are exempt from these rules?

Some California industries fall under a different set of regulations than most professions. For example, actors, swimmers, athletes, and some healthcare professionals fall under different restrictions. You can review the relevant California wage law for exempt industries here.

How can I get more information about meal and rest periods?

If you feel you may have a claim for missed meal and rest periods, do not hesitate to contact our team. We have extensive experience trying cases involving California labor law. If you’d like to do some additional reading, you can learn more on the official website of the Department of Industrial Relations. Click here to learn more about meal periods and rest breaks.

Many employees avoid pursuing meal and rest period claims they perceive as minimal. Please note that, regardless of the size of your claim, you are within your rights to pursue a wage claim if your employer fails to provide your additional hour of pay for each violation.

Workers’ Compensation

Workers’ compensation benefits exist to provide you with the resources you need for medical treatment and recovery in cases where you have been injured on the job. Whether you were injured by one isolated event or as a result of repeated exposure to hazardous materials or conditions, you are entitled to medical care following a claim.

Does my employer have to provide workers’ compensation?

In California, Cal. Labor Code § 3700 requires that all employers, even those with only one employee, must have workers’ compensation insurance. This means that your employer must have a workers’ compensation plan in place or they are violating the law. While some very large companies can be considered “self-insured,” it is likely that they will have a policy with a licensed provider.

How do I know if I have workers’ compensation coverage?

In addition to requiring coverage, the state of California also requires that employers display a notice of workers’ compensation coverage along with the name of the insuring company. The notice should be in a conspicuous location, and ideally, it should have been pointed out to you when you were hired. The notice is often located in common rooms, lobbies, breakrooms and near time clocks.

What do I do if I have a workers’ compensation claim?

The first step is to report the work-related injury to your employer. This report should be made as soon as you see a doctor, miss work, or become aware that the injury is work-related. The guidelines are a bit more confusing if your injury is cumulative, like a stress fracture. You may be noticing pain long before you see a doctor, and it may be that you only become aware of the cause of the injury after seeing a doctor. Be sure to alert your employer as soon as possible. If you report the injury, you should receive a workers’ compensation claim form.

Do I need to see a specific doctor for my injury?

You may be regulated to specific care providers if the injury is non-emergent. If the injury could be considered an emergency, you can go anywhere you would like to receive medical care. No matter where you are treated, it is important for your claim to make the physician aware that your injury is work-related. They can note those circumstances in your chart.

I filed my claim, but it was denied. What do I do?

When there is a dispute regarding a workers’ compensation claim, you will need to file an application for adjudication with the Workers’ Compensation Appeals Board. It’s important to note that there is a time limit for this application. In most cases, you will have one year from the date of injury to file the application for adjudication. If the insurer has provided partial benefits but disputes some aspects of the claim, you will then have five years to file the application.

What do I do if my employer does not have workers’ compensation?

If you attempt to file a claim and discover that your employer is uninsured, you may need to file a personal injury lawsuit to recover the money you need for treatment. Consult with an employment attorney in order to determine the best course of action. In the meantime, you can seek financial relief through the California Uninsured Employers Benefits Trust Fund.

Independent Contractors

California employment law distinguishes between employees and independent contractors. This distinction is about more than just whether you receive a 1099 or a W-9 at tax time. In fact, the correct classification of independent contractors is vitally important.

What is an independent contractor?

Defining independent contractors can be a bit difficult in certain industries. Generally, an independent contractor is someone who is in business for themselves. This individual will likely perform work for multiple clients and complete tasks that are not part of a company’s core business. Most independent contractors work from home and have the freedom to set their own hours or use their own equipment. A true independent contractor should not be substantially controlled by their employer and are generally paid by project, rather than salaried or hourly. Some examples of independent contractors may include a plumber who fixes leaks or a graphic designer who works for many clients.

How do I know if I should qualify?

Although there is no comprehensive checklist for determining your status, ask yourself the following questions:

• Does your employer control how and when your work is completed?
• Do you work for only one company at a time?
• Are your tasks part of the core business structure of the company?
• Are you paid hourly or given a salary?

If you answered “yes” to the above questions, you should likely be considered an employee. Most independent contractors perform work on a by-project basis and are employed for a specific length of time.

What happens if I am misclassified?

Although misclassification is not always malicious, it should always be taken seriously. Some employers intentionally misclassify their workers as they attempt to circumvent tax law and California wage law. According to the California Labor Commissioner’s website, the misclassification of workers as independent contractors costs the state roughly $7 billion in lost payroll taxes each year. In 2016, a Harvard study estimated that over 8.4% of the United States workforce was being classified as an independent contractor. This percentage represents a substantial increase, and it continues to grow every day, due in large part to corporations like Uber, Lyft, and Amazon delivery services.

If you have been misclassified, you are being unlawfully deprived of certain protections. For example, you are entitled to meal and rest periods and protected by anti-discrimination laws. Furthermore, you are not eligible for unemployment benefits or protected by overtime laws. If you discover you have been misclassified, you should take immediate action to rectify the situation with your employer.

Can I take legal action if I’ve been misclassified and underpaid?

If you have been misclassified and deprived of your rights as an employee, you may have grounds for a wage claim. California wages law allows employees to collect compensation for unpaid overtime, salaries below the minimum wage, and missed meal period and rest breaks. The California Supreme Court has specifically stated that “the purpose of wage and hour laws is to enable people to earn a subsistence standard of living and to protect workers’ health and safety.” When the employer does not uphold their responsibilities, it forces the public to assume financial responsibility for workers earning substandard wages or for working in unhealthy or unsafe conditions.