In the medical world, a fomite is an inanimate object—like a doorknob or keyboard—that can transmit infectious agents from one person to another. While not inherently harmful, fomites become dangerous when they carry viruses that infect new hosts.

This concept has surprising relevance in the workplace. At Zaller Law Group, we’ve seen firsthand how workplace culture can be affected by similarly subtle carriers—employees, habits, or practices that unintentionally spread dysfunction. In this article, we explore how understanding fomites in the workplace can help employers diagnose, manage, and protect company culture.

1. What Is a Workplace Fomite?

Reimagined for the employment context, a fomite is a person, behavior, idea, or workplace practice that carries and spreads negativity, poor morale, or toxic dynamics—often without bad intent.

They are not the source of the problem (the “virus”), but they are the mechanism by which it spreads. Recognizing these fomites allows managers to treat the root cause without alienating valued team members.

Example: An employee who constantly expresses cynicism about leadership might not violate policy, but they may still erode trust and morale over time.

2. Forms Fomites Can Take in the Workplace

Workplace fomites are not limited to people. They can include:

  • Informal routines that bypass official procedures
  • Managers with poor communication styles
  • Client relationships that normalize disrespect
  • Legacy practices that no longer reflect company values

Example: A “star” employee who ignores documentation requirements may influence others to follow suit—putting the company at legal risk despite their strong performance.

Example: A group Slack channel where sarcasm and gossip are the norm can quickly shape team dynamics, even if no policy is technically broken.

3. Fomites Are Not the Virus—So Treat the Contagion, Not the Carrier

It’s crucial to understand that fomites are not inherently toxic. They may be unaware of their impact and often respond well to coaching.

Toxic employees, on the other hand, intentionally disrupt the workplace and typically require a more direct approach, including potential separation.

Example: A supervisor who uses humor to deflect accountability may think they’re building rapport—but might actually be modeling irresponsibility for the entire team.

Correcting the underlying behavior (the “virus”) is often more effective than removing the person (the “fomite”)—especially when that person is otherwise aligned with company values.

4. Fomites Can Import External Contagions Into the Workplace

Just like medical fomites can introduce new pathogens from outside environments, workplace fomites can bring external negativity into the company. These can include:

  • Stress or conflict from personal life
  • Polarizing political discussions
  • Burnout or resentment from previous jobs
  • Viral trends on social media

Example: An employee consumed by divisive news topics might regularly bring those conversations into meetings, shifting focus from business to personal ideology.

While a completely sterile workplace isn’t realistic—or even healthy—leaders must watch for when external issues begin to damage team cohesion or productivity.

5. Some Fomites Are Critical to the Company’s Health

In the medical sense, skin is a fomite—but we obviously can’t function without it. Similarly, some workplace fomites may be high-performing team members or foundational practices that have simply gone unchecked.

Example: A senior leader whose direct style has historically “gotten things done” might now be perceived as abrasive by younger employees—spreading disengagement despite their results.

The goal here isn’t removal. It’s awareness and intervention. The most valuable fomites can become the most powerful allies once they recognize their influence and adjust their approach.

How Employers Can Address Workplace Fomites

Employers can reduce workplace contagion and strengthen company culture by:

  1. Monitoring impact over intention. Focus on how behaviors affect culture—not whether they’re “meant” to be harmful.
  2. Coaching early and often. Most fomites are unaware of their influence and will respond well to clear, constructive feedback.
  3. Evaluating systemic fomites. Practices, traditions, or routines can spread dysfunction even when no one person is at fault.
  4. Encouraging immune-building exposure. Don’t overcorrect. Some discomfort and new ideas are healthy—just watch how they’re transmitted.
  5. Promoting cultural hygiene. Reinforce company values in onboarding, training, and performance management to build resilience.

Diagnose the Real Problem, Don’t Blame the Carrier

At Zaller Law Group, we counsel California employers through the legal and cultural challenges of managing people. Identifying and addressing workplace fomites is a powerful tool in preserving a positive, compliant, and productive environment and reducing litigation exposure.

The first 90 days of employment are more than just an adjustment period—they’re a critical window to engage new hires, reduce turnover, and avoid legal risks. For California employers, where employment laws are especially protective of workers, effective onboarding is both a best practice and a compliance must.

Here are the top five things every California employer should focus on during the onboarding process:

1. Make a Strong First Impression—And Keep It Going

Many employees decide in the first weeks whether they’ll stay long term. Start with a warm welcome, clear orientation, and a structured 30-60-90 day plan. Don’t just hand over paperwork and leave them to figure things out—regular check-ins and mentorship help new hires feel supported and connected.

Stat: Organizations with strong onboarding improve new hire retention by 82% and productivity by 70%.

2. Be Clear on Policies—and California Compliance

California has unique onboarding requirements. Make sure new hires receive the required documents, such as:

Being transparent early helps prevent misunderstandings—and lawsuits—later.

3. Set Cultural Expectations and Build Connection

Culture matters. Use the onboarding process to communicate your mission, values, and behavioral expectations. Include the employee in team lunches, assign a “buddy,” and encourage relationship-building across departments. When employees feel like part of the team, they’re more likely to stay—and less likely to sue.

Stat: Employees who felt onboarded effectively were 18x more likely to feel committed to their employer.

4. Train Early and Often

Don’t let onboarding be a one-day event. Break training into manageable stages. Teach job-specific tasks, workplace safety, and compliance expectations. In restaurants and fast-paced industries, shadowing, checklists, and gradual independence help new employees thrive.

Tip: Use a 30-60-90 day plan to build skills, monitor progress, and reduce overwhelm.

5. Document Everything

Good documentation protects your business. Keep records of all signed policies, training completions, and performance check-ins. If a termination becomes necessary, documented onboarding efforts and feedback provide helpful evidence against wrongful termination or retaliation claims.

Final Thought:

In California’s legal landscape, strong onboarding is not just smart—it’s essential. By investing in a clear, structured, and supportive onboarding experience, you boost retention, limit risk, and help new hires become successful, long-term contributors to your team.

Need help reviewing or building your onboarding process? Contact our team for a compliance check-up and customized support.

California employers must begin preparing now to meet the May 14, 2025 deadline for the state’s pay data reporting obligations. As mandated by California law, private employers with 100 or more employees and/or 100 or more workers hired through labor contractors in the prior calendar year must submit detailed pay data reports to the California Civil Rights Department (CRD). This requirement applies even to employers based outside of California if they have at least one employee working in or assigned to a California establishment.

By requiring annual submission of pay data, California aims to promote transparency and voluntary compliance with equal pay and anti-discrimination laws by identifying wage patterns along gender, racial, and ethnic lines.

1. Deadline to File is Wednesday, May 14, 2025

The CRD Pay Data Reporting Portal opened on February 3, 2025. All reports must be submitted and certified through this portal no later than May 14, 2025. Submissions outside the portal or in non-digital formats will not be accepted and will be deemed non-compliant​.

2. Who Must File

Private employers must file if they meet either of the following thresholds in the 2024 calendar year:

  • Employed 100 or more payroll employees (part-time and full-time), with at least one working in or assigned to California.
  • Had 100 or more labor contractor employees (i.e., workers provided by a staffing agency), with at least one working in or assigned to California.

An employer is also required to report if they are part of an integrated enterprise that collectively employs 100 or more workers across affiliated entities​.

3. What to Include in the Report

The required reports must include:

  • Median and mean hourly pay rate by establishment, job category, pay band, sex, race, and ethnicity.
  • Total hours worked in the 2024 reporting year.
  • Classification of remote workers, including:
    • Remote workers located in California.
    • Remote workers outside of California assigned to a California establishment​.

The Snapshot Period for determining which employees to include in the report is any single pay period between October 1 and December 31, 2024.

4. Remote Worker Reporting Requirements

Employers must distinguish between fully remote employees and hybrid workers. Remote workers are defined as those with no expectation to regularly report in person to a physical worksite. If an employee reports to a physical establishment—even occasionally—during the Snapshot Period, they are not classified as a remote worker​

All employees working remotely in California, or working outside California but assigned to a California establishment, must be included in the report.

5. Labor Contractor Employee Reports

If a business used 100 or more labor contractor workers in 2024, it must file a separate Labor Contractor Employee Report. This applies even if these workers were not on the business’s payroll.

Employers must:

  • Identify labor contractors used.
  • Report data for workers assigned to California establishments or working within California.
  • Provide each labor contractor’s name, FEIN, and Snapshot Period dates​

This reporting obligation does not apply to 1099 independent contractors.

Noncompliance may result in CRD seeking a court order and civil penalties of up to $100 per employee, and $200 per employee for subsequent failures. If a labor contractor fails to provide necessary data to a client employer, it may also be held liable​

All reports must be submitted via the CRD’s Pay Data Reporting Portal: https://pdr.calcivilrights.ca.gov
FAQs and updates are available at: https://calcivilrights.ca.gov/paydatareporting

Reports may be submitted using:

  • CRD’s Excel template,
  • CSV file upload, or
  • Online fillable forms.

For 2025, the CRD has placed a strong emphasis on certification, and certifying official of the employer—not a third-party HR provider—must review and certify the report before submission.

California’s 2024 reform to the Private Attorneys General Act (PAGA) was intended to ease the burden on employers—but only for those who can demonstrate a real, documented effort to comply with wage and hour laws.

Under the revised law, employers now face reduced penalties if they take proactive steps to comply:

  • 15% of the applicable penalties if the employer took reasonable steps to comply before receiving a PAGA notice or a request for employment records
  • 30% of the applicable penalties if the employer took reasonable steps to comply within 60 days after receiving a PAGA notice

In both cases, the key phrase is “reasonable steps to comply”—and that’s where a PAGA audit comes in.

A thorough internal review, supported by legal counsel if needed, helps employers identify and correct compliance issues before they result in a claim. And if a claim does arise, an audit report and supporting documentation may help reduce penalties and demonstrate good faith.

Our law firm’s PAGA Compliance Audit and Certification Program focuses on many aspects of compliance, and here are five key areas most California employer should evaluate as part of their compliance strategy:

1. Payroll and Timekeeping Practices

PAGA claims frequently target wage-related issues, especially rounding practices, inaccurate time records, or missed overtime. Employers should evaluate:

  • Whether time rounding practices comply with recent court decisions
  • Accuracy of timekeeping systems, especially for remote or mobile workers
  • Proper payment of all hours worked, including split shifts and reporting time pay

A payroll audit can reveal small technical issues that, when repeated across a workforce, lead to significant penalties.

2. Meal and Rest Break Compliance

Missed, short, or late breaks remain one of the most common sources of PAGA exposure. Employers must ensure:

  • Breaks are provided within the legally required windows
  • Premium pay is issued when breaks are not compliant
  • Policies match actual practice, and managers are properly trained

Even minor inconsistencies in this area can add up quickly in class and representative actions.

3. Wage Statement Accuracy

Labor Code section 226 violations are especially dangerous under PAGA because even small formatting or data errors can result in significant penalties. A compliance check should include:

  • Verifying that wage statements list all required items under Labor Code section 226
  • Ensuring that deductions and net pay are clearly and correctly listed
  • Confirming statements are issued in a timely and accessible format

A detailed review can help avoid “gotcha” claims over technical defects.

4. Employee Handbooks, Policies, and Manager Training

Written policies set the tone for compliance—but only if they’re current and enforceable. Employers should audit:

  • Whether policies reflect updated laws, including those from the 2024 legislative session
  • Consistency between the handbook and actual day-to-day operations
  • Manager training about the policies and procedures, and how to implement these in operations legally

Legal review of policies can also strengthen defenses if a claim arises.

5. Termination and Final Pay Procedures

Final pay violations—whether due to late checks, unpaid vacation, or other unpaid wages—can trigger penalties under multiple Labor Code sections. Employers should assess:

  • Timing and accuracy of final pay for both voluntary and involuntary separations
  • Documentation of final wages, including bonuses and unused PTO
  • Whether the process is clearly outlined and followed consistently across locations

An audit of exit procedures can prevent common errors that spark litigation.

Moving Toward Certification

Employers who take the extra step to correct issues identified during a PAGA audit can demonstrate a strong, documented commitment to compliance. Programs like the Zaller Law Group’s PAGA Compliance Audit and Certification not only help identify risks but also provide a certificate of compliance that may serve as a powerful tool in resolving or defending against PAGA claims.

While certification does not immunize a business from lawsuits, it can:

  • Show reasonable steps in court or settlement discussions and cap penalties
  • Support negotiations with plaintiffs’ attorneys
  • Prevent litigation before it arises

Final Thought

With PAGA reform shifting some control back to employers, now is the time to take advantage of the opportunity. Conducting a thorough PAGA audit isn’t just about checking boxes—it’s about building a culture of compliance and reducing risk across the board.

Employers of any size are vulnerable to PAGA claims, but the potential liability really starts to add up for employers with 20 or more non-exempt employees—especially in hospitality, retail, healthcare, and logistics—should consider a proactive review.

In 2025, my firm is seeing a noticeable uptick in enforcement actions by the California Employment Development Department (EDD), particularly around the classification of workers as independent contractors. While it’s purely speculative, this rise in audits and assessments could be partially driven by the state’s ongoing budget shortfalls, as California seeks to recover unpaid payroll taxes to help close the gap.

Here are five key things California employers should know:

1. We’ve Seen An Increase In EDD Audits —Be Prepared

We’ve seen an increase in EDD audits in 2025, primarily focused on misclassification of workers. Companies that have historically classified certain roles as independent contractors—especially in industries like hospitality, logistics, tech, and gig work—are now finding themselves under review. These audits can result in large assessments for unpaid unemployment insurance, disability insurance, and other payroll taxes.

2. Misclassification Can Trigger Multiple Layers of Liability

In addition to EDD assessments, misclassified workers may pursue private claims for unpaid overtime, missed breaks, unreimbursed expenses under Labor Code section 2802, and even PAGA penalties. The financial exposure can be significant, especially when claims reach back four years and include attorneys’ fees and interest.

3. The EDD and DLSE Use Different Tests—Know Them Both

California primarily applies the ABC Test under AB 5, which presumes a worker is an employee unless all three parts of the test are met. However, the economic realities test—still used in some cases—evaluates factors like the level of control, whether the work is part of the employer’s regular business, and who provides tools and equipment. Employers must be familiar with both tests, as different agencies may apply different standards.

4. Even a Written Contract May Not Protect You

Even if both parties agree to an independent contractor arrangement and sign a contract saying so, that agreement doesn’t determine legal status. Enforcement agencies and courts will look at the actual working relationship. If the business controls the work and the worker is economically dependent on the company, classification as an employee may be required under the law.

5. Now Is the Time for a Classification Audit

Given the rise in enforcement and potential financial exposure, employers should proactively review their worker classifications. Consider having legal counsel conduct an internal audit using the ABC and economic realities tests to identify any high-risk roles. A proactive review could help avoid audits, assessments, and costly litigation down the road.

Bottom line: With California facing a projected budget deficit, state agencies may be ramping up enforcement efforts to increase revenue. Whether your business relies heavily on contractors or just uses them occasionally, now is the time to reassess and ensure compliance.

Employers in California should periodically review their employee documentation and record retention policies to ensure compliance with state laws. Below are five critical areas to audit as of 2025:

1. Are Employee Time Records Maintained for at Least Four Years?

California law requires employers to track hourly employees’ start and stop times, meal periods, and total hours worked. Time records are crucial in wage and hour lawsuits, which can reach back four years. Employers should:

  • Ensure timekeeping systems are accurate and configured properly.
  • Regularly audit the system to confirm it tracks required data.
  • Implement a complaint procedure for employees to report timekeeping issues.

2. Are Pay Stubs and Schedules Properly Backed Up?

Under Labor Code Section 226, employers must retain pay stubs for at least three years; however, many extend this to four years due to the statute of limitations on wage claims brought under the Unfair Competition Law. Employers should:

  • Store electronic copies of pay stubs that meet legal requirements.
  • Avoid relying solely on payroll companies for record retention, as access may be lost if switching providers.
  • Retain employee schedules for four years, as they are often critical in defending wage claims.

3. Are Employee Files Maintained Confidentially and for Four Years?

Senate Bill 807 (SB 807), effective January 1, 2022, amended California Government Code Section 12946 to require employers to retain personnel files for at least four years after creation or employment action (e.g., termination). Employers should:

  • Keep personnel files confidential and secure.
  • Maintain and preserve any and all applications, personnel, membership, or employment referral records and files for at least four years after they are initially created or received.
  • Retain personnel files of applicants or terminated employees for a minimum of four years after the date of the employment action taken (e.g., non-hire of an applicant or termination of an employee).
  • Employers in California are required to retain records of completed sexual harassment training for a minimum of two years. These records should include:
    • The names of employees who participated in the training
    • Dates of the training sessions
    • Copies of training materials used
    • Any certificates issued documenting the completion of training

While California law does not define “personnel files,” guidance from the Division of Labor Standards Enforcement (DLSE) suggests including documents used to evaluate promotions, compensation, or disciplinary actions.

4. Are Forms I-9 Retained Correctly?

Federal law requires employers to keep Form I-9 for three years after hire or one year after termination, whichever is longer. Employers must also:

  • Store I-9 forms separately from other personnel records for easy retrieval during inspections.
  • Ensure compliance with production deadlines if requested by authorities (within three business days).

5. Are Managers Trained on Record Retention Policies?

Policies are only effective if managers understand and follow them. Employers should train supervisors on:

  • Proper documentation of employee discipline, tardiness, absences, and accommodations.
  • Standard forms available for documenting workplace issues.
  • Procedures for submitting and storing records electronically or in paper form.

By maintaining proper records and training staff on retention policies, employers can mitigate litigation risks while ensuring compliance with California’s stringent requirements under SB 807 and related laws.

In light of the Trump administration’s heightened focus on immigration enforcement, our law firm has been inundated with inquiries from employers seeking guidance on I-9 compliance. The complexities surrounding employment verification have become a pressing concern for many businesses, prompting us to address these issues head-on. Recently, we hosted two webinars that attracted over 500 employers, underscoring the widespread interest and need for clarity on this topic (given the demand, we are conducting another webinar on March 21, more information below). These sessions provided valuable insights and practical advice, helping employers navigate the intricacies of I-9 compliance and ensure they remain in full compliance with federal regulations.

We’ve identified five key aspects of I-9 compliance that are crucial for understanding and adhering to federal requirements. By focusing on these areas, employers can better manage their responsibilities and avoid potential penalties:

1. E-Verify and Remote Document Verification

E-Verify is an online system that allows employers to confirm the eligibility of their employees to work in the United States. With the rise of remote work, remote document verification has become increasingly important. However, this is only available for employers who are enrolled in E-Verify and are good standing, and they must follow specific guidelines to ensure the process is secure and compliant. This includes using video conferencing tools to inspect documents and maintaining detailed records of the verification process. All employers not enrolled in the E-Verify program must physically inspect the documents produced by employees when completing the I-9.

2. USCIS Handbook for Employers M-274

The USCIS Handbook for Employers (M-274) is an essential resource for understanding the requirements of Form I-9, which is used to verify the identity and employment authorization of individuals hired for employment in the United States. The handbook provides detailed instructions on how to complete and retain Form I-9, as well as guidance on handling special situations such as name changes and rehires.

3. Retention of Form I-9

Employers must retain completed Form I-9 for each employee for a specific duration to comply with federal regulations. The retention period is determined based on the employee’s tenure with the company:

  • For current employees, retain the form for as long as they work for you.
  • For former employees, retain the form for either three years after the date of hire or one year after the date employment ends, whichever is later.

Employers can retain Form I-9 on paper, microfilm, microfiche, or electronically, but they must ensure that the forms are accessible and can be presented within three business days of an inspection request from DHS, DOJ, or DOL officers.

4. Time to Complete Form I-9

The Form I-9 needs to be completed by both the employee and the employer within specific timeframes to ensure compliance with U.S. immigration laws:

  • The employee must complete Section 1 no later than their first day of employment.
  • The employer must complete Section 2 by examining the employee’s documents and verifying their identity and employment authorization within three business days of the employee’s first day of employment.

In special cases, such as when the employee will work for less than three business days, both sections must be fully completed at the time of hire.

5. Recertification and Reverification

Employers need to reverify or recertify Form I-9s in specific situations to ensure that employees remain authorized to work in the United States:

  • Reverify employment authorization no later than the date the current authorization expires.
  • If rehiring an employee within three years from the date the original Form I-9 was completed, update the form to reflect the rehire date and reverify employment authorization if necessary.

Employers should also be aware of special situations, such as automatic extensions of employment authorization and specific requirements for employees with Temporary Protected Status (TPS) or those who are refugees or asylees.

By understanding and adhering to these key aspects, California employers can ensure compliance with employment verification requirements and avoid potential penalties. For more detailed information, refer to the USCIS Handbook for Employers (M-274) and other relevant resources.

As we continue to support employers in navigating the complexities of I-9 compliance, we are excited to announce our upcoming webinar on March 21, 2025, at 10 a.m. PT. This session will focus on a hands-on workshop addressing the most pressing issues employers face regarding I-9s and compliance, and registration is available here.

California’s fast-food industry is once again at a crossroads. Following the April 1, 2024, minimum wage increase to $20 per hour (as previously covered here), fast-food operators have struggled with higher labor costs, price increases, job losses, and store closures. Now, the Fast Food Council is considering another increase to $20.70 per hour, with a final vote expected in April or May 2025.

If the proposed wage hike is approved, fast-food employers will need to act quickly to adjust labor budgets, pricing strategies, and compliance measures. Here are five key steps operators should start considering now to prepare for another wage increase.

Five Steps Fast-Food Employers Should Start Considering Now

1. Review Payroll and Budget for the Potential Wage Increase

If the new $20.70 per hour wage is approved, employers must:

  • Ensure payroll systems are updated to reflect the new rate as soon as it takes effect.
  • Adjust labor budgets to account for increased wage costs.
  • Project financial impacts on operations, including potential reductions in hours, staffing, or menu price adjustments.

2. Plan for Higher Overtime Costs

With a higher minimum wage, overtime rates will also increase:

  • 1.5x Overtime Pay: $31.05 per hour
  • 2x Double-Time Pay: $41.40 per hour

Employers should evaluate scheduling practices, limit unnecessary overtime, and consider staffing adjustments to manage costs.

3. Update Employee Notices and Pay Stubs

If the increase is approved, fast-food operators will need to:

  • Update employee notices as required by Labor Code section 2810.5 to reflect the new wage.
  • Ensure pay stubs are accurate, displaying the correct new hourly rate and applicable overtime calculations.

4. Assess the New Exempt Employee Salary Threshold

A higher minimum wage means exempt employees will also require a higher salary to maintain their exempt status. If the wage increases to $20.70 per hour, the new minimum salary for exempt employees in covered fast-food businesses will be:

$20.70 x 2 x 2,080 = $86,112

That means managers and other exempt employees would need to be paid at least $86,112 annually to remain exempt from overtime laws. Employers should start reviewing their exempt employee classifications now and determine if reclassification or salary adjustments will be necessary.

5. How Employers Are Responding to Rising Labor Costs

The latest economic data on California’s $20 per hour minimum wage highlights the widespread financial strain on fast-food operators, with job losses, reduced hours, and increased menu prices becoming unavoidable realities. According to a February 2025 report by Berkeley Research Group (BRG):

  • California’s fast-food sector lost 10,700 jobs (-1.9%) between June 2023 and June 2024, marking the worst employment trend in decades outside of economic recessions.
  • Nearly 89% of surveyed fast-food operators reduced employee hours in the first few months after the wage increase, and 87% expect to make further cuts in the next year.
  • Menu prices in California’s fast-food sector increased by 14.5% from September 2023 to October 2024, almost double the national average (8.2%), making fast food significantly more expensive for consumers.
  • 35% of operators reduced employee benefits, and automation adoption has increased as businesses look for ways to offset labor costs.

With the Fast Food Council now considering an increase to $20.70 per hour, these trends are expected to continue. Employers will likely make additional reductions in staffing and hours, further raise menu prices, and accelerate automation investments to maintain operations. More layoffs and restaurant closures could be on the horizon as businesses struggle to absorb rising labor costs.

What’s Next for Fast-Food Operators?

The Fast Food Council is expected to vote on the proposed wage increase in April or May 2025. If approved, employers will need to move quickly to implement changes and adjust business strategies to stay competitive.

By planning now, fast-food operators can mitigate financial strain, ensure compliance with labor laws, and make informed business decisions before the next potential wage increase takes effect.

As a business owner in California, you wear many hats—manager, strategist, and sometimes even janitor. But when it comes to managing employees, the Golden State’s complex employment laws can turn what seems like a simple task into a legal minefield. While small businesses often handle human resources tasks in-house, there comes a point when hiring a dedicated HR professional isn’t just a luxury—it’s a necessity. Here’s a guide to help you decide when it’s time to bring an HR expert on board.

1. Your Employee Count Hits 50 (or Approaches It)

In California, the magic number for many employment law thresholds is 50 employees. Once you reach this size, you’re subject to laws like the federal Family and Medical Leave Act (FMLA) (remember, the California counterpart, the California Family Rights Act (CFRA), applies to employers with five or more employees) which require you to provide eligible employees with up to 12 weeks of unpaid, job-protected leave. Managing compliance—tracking eligibility, handling requests, and ensuring proper documentation—can quickly overwhelm a business owner or untrained staff.

Even before you hit 50 employees, California imposes rules that smaller businesses must follow, such as the CFRA and mandatory sexual harassment prevention training for employers with five or more employees (including temporary or seasonal workers). An HR professional can streamline compliance and reduce your risk of costly mistakes.

2. You’re Struggling to Keep Up with California’s Employment Laws

California is notorious for its employee-friendly regulations, which are constantly evolving. From the Fair Employment and Housing Act (FEHA) protecting against discrimination to the ever-changing minimum wage laws (currently $16.50 per hour statewide as of 2025, with higher rates in many cities and counties), staying compliant is a full-time job. Add in paid sick leave mandates, meal and rest break requirements, and the intricacies of overtime rules, and it’s easy to see why DIY HR might not cut it anymore.

An HR professional brings expertise in navigating these laws, ensuring your policies—like employee handbooks, payroll practices, and termination procedures—meet legal standards. They can also keep you updated on new legislation, such as recent expansions to paid family leave or changes in independent contractor classifications under AB 5.

3. Employee Issues Are Eating Up Your Time

Are you spending more time resolving workplace disputes, drafting job descriptions, or figuring out how to handle a worker’s accommodation request than running your business? As your workforce grows, so do HR demands. Issues like complaints about harassment, requests for disability accommodations under the Americans with Disabilities Act (ADA) and FEHA, or even basic onboarding tasks can become overwhelming.

An HR professional takes these responsibilities off your plate. They can mediate conflicts, ensure accommodations are handled legally, and create efficient systems for hiring, training, and performance reviews—freeing you to focus on growth.

4. You’ve Had a Close Call (or a Lawsuit)

California employees have a low bar for filing claims with the Department of Fair Employment and Housing (DFEH) or the Labor Commissioner’s Office. A missed paycheck, an improperly classified exempt employee, or a failure to provide lactation breaks can snowball into fines, penalties, or litigation. If you’ve already faced a wage-and-hour violation, a discrimination complaint, or even a warning from a disgruntled worker, it’s a sign your HR processes need professional attention.

An HR expert can audit your practices, spot vulnerabilities, and implement safeguards—like proper record-keeping for hours worked or training supervisors on anti-discrimination policies—to prevent future headaches.

5. You’re Planning to Scale


Growth is exciting, but it amplifies HR complexity. Expanding your team, opening new locations, or hiring remote workers across California (or beyond) introduces challenges like multi-jurisdictional compliance, benefits administration, and consistent company culture. An HR professional can design scalable systems, from recruiting strategies to benefits packages.

What If You’re Not Ready for a Full-Time HR Hire?

For smaller businesses—say, those with 10 to 20 employees—hiring a full-time HR professional might feel premature. In that case, consider alternatives:

  • HR Consultant: Bring in an expert on a project basis to update policies or train staff.
  • Outsourced HR Services: Many firms offer affordable packages tailored to California businesses.
  • Of course – my favorite: Legal Counsel: Pairing with an employment attorney can bridge the gap until you’re ready for an in-house hire.

The Bottom Line

There’s no one-size-fits-all answer to when you need an HR professional, but a good rule of thumb is this: If employee management is distracting you from your core business, exposing you to legal risks, or becoming too complex to handle alone, it’s time to invest in HR expertise. In California’s regulatory landscape, a skilled HR professional isn’t just a support role—they’re a strategic partner in protecting your business and fostering a thriving workplace.

It is critical for California employers to properly calculate the regular rate of pay for an employee in order to pay the appropriate overtime pay and for premium pay for missed meal and rest breaks.  Here are five issues employers must be aware of regarding calculating an employee’s regular rate of pay:

1. Employers must pay the “regular rate of pay” as calculated for overtime purposes when paying premium pay for missed meal and rest breaks.

As we previously reported, the California Supreme Court in Ferra v. Loews Hollywood Hotel, LLC held that the “regular rate of compensation” owed as premium wages for missed meal and rest breaks, must be calculated just as the “regular rate of pay” is calculated for overtime purposes.  While the case discussed generally what must be included in the “regular rate of pay” calculations, there are many nuances to this calculation.

 2. What compensation must be included in calculating employee’s regular rate of pay?

The DIR defines regular rate of pay as “the compensation an employee normally earns for the work they perform.  The regular rate of pay includes a number of different kinds of renumeration, such as hourly earnings, salary, piecework earning, and commissions.  In no case may the regular rate of pay be less than the applicable minimum wage.”

The Court in Ferra held that the “regular rate of pay” for missed meal breaks, just like the calculation of overtime pay, “must account for not only hourly wages but also other nondiscretionary payments for work performed by the employee.”  The Court explained that, “We use the term ‘nondiscretionary payments’ to mean payments for an employee’s work that are owed ‘pursuant to [a] prior contract, agreement, or promise,’ not ‘determined at the sole discretion of the employer.’”

3. Examples of payments that must be calculated into the regular rate of pay.

In determining the regular rate of pay, employers must include the employee’s base hourly rate plus any amounts for:

  • Shift differentials (such as premiums to work on weekends or holidays)
  • Attendance bonuses, such as those earned for weekend work is a form of incentive pay
  • Piece rate earnings
  • Commissions
  • Nondiscretionary pay and bonuses. The DIR explains, “A nondiscretionary bonus is included in determining the regular rate of pay for computing overtime when the bonus is compensation for hours worked, production or proficiency, or as an incentive to remain employed by the same employer.”

4. Examples of payments that are not included when calculating the employee’s regular rate of pay.

Unlike the nondiscretionary items listed above, an employee’s regular rate of pay does not increase for any of the following payments made to them:

  • Discretionary payments made to employees, such as gifts or bonuses that are not tied to the employee’s production, hours worked, or by formula for certain benchmarks.
  • Reimbursements for business expenses
  • Certain pay owed as required by the Labor Code, such as premium pay for missed meal and rest breaks, reporting time pay, call back pay, split shift pay.
  • Because tips are voluntarily left by customers to employees, tips do not increase an employee’s regular rate of pay for overtime calculations and premium pay.  However, if an employer implements mandatory service charges and shares these service charges with employees, the service charges must be considered wages for overtime and tax purposes.  Therefore, the employee’s regular rate of pay for overtime purposes and in calculating premium pay will be higher when mandatory service charges are distributed to the employees.

5. Employers must be aware of the proper calculation methods in determining the regular rate of pay.

Employers must carefully follow the different calculation methods to determine the employee’s regular rate of pay.  For example, the DIR sets forth how employers are to calculate the regular rate of pay for non-exempt salary employees, employee’s paid by the piece or commission, and that employers are to use a “weighted average” method for employees paid two or more rates during the workweek.  Employers must also be careful in how to calculate the regular rate of pay for nondiscretionary flat sum bonuses paid to employees.  The calculations are complex, and employers need to review the appropriate calculation method to ensure the calculation is done properly.