You’ve set up a successful company and begin hiring employees. To be a successful operator in California, a company’s management needs to be familiar with the critical legal concepts in order to successfully navigate California’s complex employment laws. You never wanted to go to law school, but time to hit the, ahem, books (or the Internet). Here are a five fundamental legal concepts that every employer should understand:
1. At-will employment.
Under California law, it is presumed that all employment is terminable at-will. California Labor Code section 2922 provides: “An employment, having no specified term, may be terminated at the will of either party on notice to the other.” The at-will doctrine means that the employment relationship can be terminated by either party at any time, with or without cause, and with or without advanced notice. There are some major exceptions to this rule, see item #3 below for example, but generally California law recognizes that employers and employees may, at any time, and for any legal reason, terminate the employment relationship.
2. Meal and rest break obligations.
Employers cannot employ an employee for a work period of more than five hours per day without providing the employee with a meal period of at least thirty minutes. This break may be waived if the total work period per day of the employee is no more than six hours, with the mutual consent of both the employer and employee. A second meal period of at least thirty minutes is required if an employee works more than ten hours per day, except that if the total hours worked is no more than 12 hours. The second meal period may be waived by mutual consent of the employer and employee only if the first meal period was not waived.
Rest periods are based on the total hours worked daily and a full ten minute consecutive break must authorized and permitted for each four hour work period, or major fraction thereof. I’ve written about these obligations before, and the DLSE’s website provides many details regarding meal periods and rest breaks.
3. Protected categories.
Under the at-will doctrine employers may decide to terminate an employee based on any reason, just as long as it is not an illegal reason. An illegal reason would be one based upon an employee’s protective category, such as their race, gender, national origin, disability, age, or sexual orientation for example. California law even protects employees who are perceived to be in a protected category, associated with someone who is in a protective category, or even a sympathizer of someone in a protected category. In addition, the DLSE provides that the following activities are also protected:
The engaging in or exercising of a right that is protected by law. Some examples of "protected activity" under the Labor Code include:
1. Filing or threatening to file a claim or complaint with the Labor Commissioner.
2. Taking time off from work to serve on a jury or appear as a witness in court.
3. Disclosing or discussing your wages.
4. Using or attempting to use sick leave to attend to the illness of a child, parent, spouse, domestic partner, or child of the domestic partner of the employee.
5. Engaging in political activity of your choice.
6. For complaining about safety or health conditions or practices.
4. The difference between exempt and non-exempt.
Employers need to understand which positions are legally entitled to overtime and other protections of the Labor Code, and the position that are “exempt” from these requirements. Here is a list of common exemptions under California law. It is important to note that employers and employees cannot simply make the determination and agree to be exempt on their own (the right to overtime cannot be waived, see non-waivable rights below). The employer has the burden of establishing that the employee meets all of the required elements of a particular exemption in order for the employee to be legally classified as exempt.
5. Understanding that certain Labor Code provisions cannot be waived by employees.
Employees cannot waive their rights to certain protections offered by the California Labor Code. For example, employees cannot waive their rights to minimum wage, overtime, expense reimbursements for out of pocket expenses incurred for business purposes, right to participate in PAGA representative actions, and the right to receive non-disputed wages. You can read more about these rights here. So before a decision is made because the employee willingly agrees to the terms, or may even ask for certain employment terms, employers need to be sure that the employee can actually agree to those terms under the law.
Photo courtesy of Janet Lindenmuth