HR Guide to California Labor Laws for Healthcare Practices
California has arguably the most “pro-worker” labor laws in the United States. That could be great for your team, but it may present challenges for you and your practice.
Even if you are in a different state, but have employees who work in California, you must follow and comply with state labor laws, which in some cases supersede federal law and are under the purview of up to six agencies
In general, California labor law protects your employees by prohibiting you or anyone in your practice from discriminating or retaliating against them for a variety of reasons. Laws change all the time, but the core tenets of labor law remain. It incorporates equal employment opportunity (“EEO”) policies, such as anti-harassment and anti-discrimination policies, disability policies, pregnancy accommodations and policies, equal pay policies, and so much more.
Top California Labor Law Issues
There are a plethora of labor law issues that you will face in your optometry, dental, veterinary, or other healthcare practice. Both the good news and bad news in that is that other companies and practices have already faced many of the same issues. Some of those issues are still being challenged in the courts, and many of the issues have already been determined, based on previous legal precedent.
So, you’re not alone, but it’s even more important that you are proactive about your understanding of the current and evolving labor laws in California. While many of these labor law issues have been explored at length in court, you should still be aware of how they could affect you. Here are some of the most common labor law issues you may face in your practice.
• Leave under California’s Fair Employment and Housing Act
• Supplemental Sick Leave Policies
OSHA/Cal-OSHA/EEOC/DFEH Worksite Investigations
• Labor Code section 1102.5 protects employees against retaliation for disclosing information, or because an employer believes an employee has disclosed information, to a government or law enforcement agency, to a person with authority over the employee, or to another employee who has the authority to investigate, discover, or correct a violation where an employee reasonably believes the information discloses a violation of a state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation.
The key item to understand here is that the employee only had to have a reasonable belief that the disclosure discloses a violation of federal, state or local law or regulation.
Wage and Hour Issues
• Inaccurate timekeeping
• Meal and rest break violations
• Reporting time pay claims
• Claims of missed wages and/or unpaid overtime
• Employment misclassification
Check out this video for more information on Meal Breaks in Your Practice
Disability Discrimination · Fair Employment and Housing Act (FEHA):
The FEHA prohibits employers from discriminating against employees based on physical conditions, mental disabilities, as well as other medical conditions.
Accurate timekeeping systems are essential for your practice, which is why HR for Health offers a modern and intuitive time-tracking system you can use. We offer accurate monitoring of hours worked, so that you and your employees are on the same page. It’s important to ensure that your nonexempt employees receive proper California overtime pay, which is why we offer this comprehensive service to meet your needs.
There could be other unique situations that you may face with your employees, such as when they are compensated at two different rates of pay. In a scenario where they may incur overtime during that work week, you may either compensate at the higher rate of pay or you can perform a weighted average calculation to calculate the overtime worked (and owed) for that employee’s work week.
California Labor Laws use the ABC Test to determine the classification of independent contractors. Most of your team members at your practice will be employees, but it’s also possible to misclassify employees as “independent contractors.”
When you misclassify employees, your team members are not receiving their full compensation, or potential benefits they may be entitled to, under California Labor Law. To remedy the misclassification, you may be forced to pay up to $25,000 per violation in civil penalties.
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Exempt and Nonexempt
California employees are considered exempt or nonexempt under California law. That means that employers are required to meet the salary requirement and other criteria based on that exempt or nonexempt status.
State labor laws require that you pay exempt employees once a month on or before the 26th of each month, when the wages were earned. You must also include the amount projected to be earned from the 26th through the remainder of the month.
State labor laws require that you pay all wages to nonexempt employees at least twice a month or semimonthly. You’re also required to provide a schedule of paydays in advance and keep to those regular paydays.
You’re required to pay any overtime by the following payday for the next regular payroll period, after you’ve earned those wages. With so many things to keep track of, it can get overwhelming. Thankfully, HR for Health offers both a comprehensive HR solution and a payroll option, so you don’t have to worry about whether or not your practice is compliant. Schedule a consultation today to see how HR for Health can help your practice navigate the changing labor laws, and ensure compliance. We’ll offer recommendations, advice and time-tested tips that will help you navigate the confusion of labor laws.
Meal and Rest Breaks
Meal and rest break compliance continues to be the source of a great deal of litigation for California employers. That’s because California has requirements for rest breaks and meal breaks that are employee friendly and many practices do not realize that they aren’t compliant.
If you do not provide breaks at the appropriate timing and with the correct duration, you could be subject to a penalty, which you’d be required to pay to your employee. The penalty is equal to one hour at their regular rate of pay.
Your employees could recover those penalties for up to four years. They can pursue additional damages if the penalties are not paid. So, it’s essential that you understand the law regarding California's meal and rest breaks requirements.
Calculating Work Hours
Calculating travel time can be challenging. California’s current minimum wage rate is $14.00 if you currently have 26+ employees, and $13.00 if you have fewer than 25 employees. California labor law requires you to pay all non-exempt employees at least this much for every hour they work “on the clock.”
Of course, some local areas in California have provisions for minimum wages that are higher than what is required by state labor laws, so you need to continue to follow and be aware of any discrepancies in this area.
Family Medical Leave Act (FMLA), California Family Rights Act (CFRA) and Healthy Workplaces, Healthy Families Act (HWHFA)
The California Family Rights Act (CFRA) requires you to provide eligible employees with up to 12 weeks of job-protected leave in a 12-month period, if you have 5+ employees. Your employee can take the leave to accommodate their own or a covered family member's serious health condition, including the following.
• Birth or placement for adoption or foster care of a child
• A qualifying exigency related to the covered active duty
• A call to covered active duty of an employee's spouse, domestic partner, child or parent in the US Armed Forces
The CFRA and the federal Family and Medical Leave Act (FMLA) parallel each other in many ways, but they also have areas of divergence.
California provides paid family leave (PFL) benefits under a Family Temporary Disability Insurance program. Eligible employees can receive partial wage replacement under certain circumstances.
• Time off to care for a seriously ill family member (i.e. child, parent, spouse, registered domestic partner, grandparent, grandchild, sibling or parent-in-law).
• Time off to bond with a child within one year of birth or placement for adoption or foster care.
• Time off to participate in a qualifying exigency related to the covered active duty.
• Time off for a call to covered active duty of the employee's spouse, domestic partner, or parent who is in the US Armed Forces.
Your employees are covered for up to eight weeks of PFL in a 12-month period.
Under the Healthy Workplaces, Healthy Families Act (HWHFA), you must allow eligible employees to take paid sick leave for the following reasons:
• Diagnosis, care or treatment of the employee's or a covered family member's existing health condition;
• Preventive care for the employee or a covered family member; and
• For an employee who is a victim of domestic violence, sexual assault or stalking to obtain legal, medical or social services.
Employees may accrue and use up to 24 hours (or three days) of paid sick leave per year. Total accrual, including carryover of unused accrued time, may not exceed 48 hours (or six days) per year.
In addition to the CFRA and HWHFA, you must comply with more than a dozen other leave and time off laws, such as:
• Pregnancy disability leave (if you have 5+ employees)
• Bone marrow and organ donor leave (if you have 15+ employees)Civil Air Patrol leave (if you have 15+ employees)
• Day of rest requirements
• Domestic violence and crime victim leave
• Drug and alcohol rehabilitation leave (if you have 25+ employees)
• Election official leave
• Family military leave (if you have 25+ employees)
• Jury duty leave
• Kin care leave
• Leave to attend judicial proceedings
• Literacy leave (if you have 25+ employees)
• Military leave
• School activities leave (if you have 25+ employees)
• School discipline leave
• Voting leave
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PTO, Vacation, & Sick Leave: Payouts by State
While all these leave requirements could affect you and your employees in California, you should also be aware of how and where there may be overlaps between various state, federal, and even local requirements. In general, the best policy is to comply with whichever requirement offers the greatest benefit to the employee.
Additional information on payday, time off and leave of absence practices in California can be found:
Federal requirements can be found.
Sexual harassment is a form of sex discrimination that violates Title VII of the Civil Rights Act of 1964 and California’s Fair Employment and Housing Act. Sexual harassment, itself, refers to both sexual and unwelcome advances. It can also be in the form of other verbal, visual, or physical conduct of any sexual nature.
Those inappropriate actions venture into the area of sexual harassment when they create a hostile, intimidating, or offensive work environment based on your employee’s sex or gender identity. Under California law, the offensive conduct in the workplace does not need to be motivated by sexual desire.
Motivation may be related to an employee’s perceived or actual sex or gender identity, perceived or actual sexual orientation, childbirth, pregnancy, or related medical conditions. The term “sexual harassment” incorporates many forms of offensive behavior.
• It includes gender-based harassment of a person of the same sex as the harasser.
• It includes actions that subject your team members to an unacceptable and hostile work environment.
It is essential that you understand what constitutes sexual harassment and take steps to prevent and stop harassment in the workplace. If you have 5+ employees, you must provide harassment prevention training to all employees every two (2) years.
California Workers' Compensation
Under California Labor Code Section 3700, you must carry workers' compensation insurance if you employ one or more employees.
State of California employee handbooks are important not only as a reference resource for you and your employees. They are resources that highlight the rights and responsibilities you and your employees have. They allow you to answer questions regarding policies and procedures, as well as mitigate conflict and other negative situations before they become more serious.
No matter how big or small your practice is, or how long you’ve been around, you need to take your employee handbook seriously. It’s the best way to keep your practice and team dynamics on track, and all on the same page. Schedule a consultation to see how HR for Health can help your practice with your employee handbook today.
Download our Handbook Update Checklist to stay up to date with federal and state laws.
Drug and Alcohol Testing
As a California employer, you can require drug testing of job applicants in California, but you must offer sufficient notice of the drug testing requirement and documentation requirements. Also, while you have the right to require drug testing, those tests must be properly performed by a third party
Please note: There are rules regarding how to navigate this drug-testing process. For example, you may need to provide certain notices to your employees (e.g. a consent form and notification to the candidate and/or employee letting them know of a positive result).
To avoid lawsuits, employees must be properly terminated.
You must pay final wages in a timely manner when you terminate employees. When they resign, you must pay them on their last day of work as long as they provide you with at least 72 hours notice of their intent to resign. If they do not offer at least 72 hours notice, you’re required to pay final wages within 72 hours of their resignation date.
If you fail to payout final wages in a timely manner, you could be subject to penalties, equivalent to a day's worth of your employee’s work for each day that the payout is late, up to 30 calendar days max.
California law does not allow you to require or offer "use it or lose it" vacation policies. You can cap vacation accruals, but the vacation benefit cannot be forfeited. You must pay out any accrued vacation and/or PTO earned by your employees upon separation or when their employment is ended. The only exception to this requirement is paid sick leave hours. Any balance of sick leave hours does not need to be paid out upon separation from employment. Please note that PTO policies, while they do encompass sick leave, still require a payout at termination.
California law also requires that you pay any outstanding wages owed to a deceased employee to the surviving spouse or even the conservator of the estate as necessary. You are not required to wait until the probate process is complete. In addition to outstanding wages, you are responsible for covering payment of any other compensation owed for personal services up to a cap of $15,000 net. You can still ask the surviving spouse or conservator of the estate to produce proof of identity, as well as a declaration or affidavit, under penalty of perjury regarding the valid disposition of the estate.
COBRA Health Insurance
The California Continuation Benefits Replacement Act (Cal-COBRA) requires your group health plan to offer continuation coverage to qualified beneficiaries, including your employees and their eligible dependents.
Cal-COBRA mirrors the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) as far as the terms and conditions for qualifying events and timelines. One main difference is that Cal-COBRA's notice premiums and requirements differ from COBRA.
Cal-COBRA requires your group health plan to offer any former employee who has exhausted continuation coverage under federal COBRA the chance to continue that expired health coverage for up to 36 months.
That continuation benefit commences from the date when the continuation coverage began, if your former employee is entitled to fewer than 36 months of COBRA coverage. If you’re still not sure why you need to know about these labor laws, and COBRA health insurance in particular, we can help.
Schedule a consultation to see how HR for Health can help your practice navigate the changing labor laws and ensure compliance. We’ll offer recommendations, advice and time-tested tips that will help you navigate the confusion of Labor Laws.
Helping Employers Understand California Law
It’s possible, even likely, that you have not taken your compliance with California's labor laws as seriously as you should. The laws are constantly changing, and there are so many other considerations that you may not have a perfect grasp of what you need to do — or even where you should start.
HR for Health is ready to help you understand California labor law, with recommendations and assistance for any documentation you might need. With our experience and background, we help ensure you’re compliant. It’s important for your practice, but it benefits you and your employees too.
If you’re still not sure why you need to know about these labor laws for your practice, we can help. Schedule a consultation to see how HR for Health can help your practice. We’ll offer recommendations, advice and time-tested tips that will help you navigate the confusion of labor laws.
How HR for Health Can Help
HR for Health works with you to help you and your employees use convenient online documents and on-demand HR advising and support services. We provide our clients with an all-in-one HR solution that helps you stay on top of things like timekeeping, meal break and rest break tracking, electronic onboarding and offboarding, a customized employee handbook and more, so you can be confident that it contains the latest policies and regulatory updates. Schedule a consultation today to see how HR for Health can help your practice grow with confidence.