California Payroll Laws – 5 Key Things for Workers to Know

5 key things to know about California’s payroll laws are that they apply to all non-exempt workers, forbid work off the clock, require meal or rest breaks, set the minimum wage, and make employers pay most discharged workers at the time of termination. Together, these laws are very friendly for workers. Violations can lead to a wage and hour lawsuit.

What are 5 important things to know about California’s payroll laws?

There are numerous important things to know about California’s payroll and employment laws. Five of the most important are:

1. they cover all non-exempt workers in the state,
2. they forbid employers from requiring their employees to work off the clock,
3. they require employers to provide rest breaks and meal breaks,
4. they set the state’s minimum wage and require employers to comply with it, and
5. they make employers pay workers that have been discharged.

These are far from the only important things to know about California’s workplace laws. Employees also have rights under other laws, like:

• the California Family Rights Act (CFRA),
• state and federal rules set by the Occupational Safety and Health Administration (OSHA), and
• the Private Attorneys General Act (PAGA).

Altogether, these California laws provide robust protections for workers in the state. California’s state laws are generally stronger than similar federal laws. Additionally, enforcement by the Labor Commissioner and the Division of Labor Standards Enforcement (DLSE), a sub-agency of the California Department of Industrial Relations, is vigorous.

Violating any employment law, including one of these 5, can be grounds for a wage and hour lawsuit. A California employment attorney can help.

1. They apply to all non-exempt workers

California’s wage and hour laws apply to all non-exempt employees in the state. These laws provide legal protections for workers, including the rights to:

• overtime pay,
• a minimum wage,
• rest or meal breaks, and
• payroll protections.

All workers in an employment relationship – that is, who are not independent contractors – are considered non-exempt workers, unless they fall into an exemption. Some of these exemptions are for:

• executive, administrative, or professional employees – also known as the “white collar exemption,”¹
• commission-earning employees,² and
• employees working in certain, specific industries or roles, like computer professionals³ or doctors.⁴

The only way for a worker to be exempt from California’s labor laws is for them to fall into one of these categories. Employers cannot make an employee exempt by simply having them sign a contract, saying that they are exempt.

2. They forbid working off the clock

California’s payroll laws forbid employers from making employees work when they are not “on the clock.”⁵ Non-exempt workers perform work off the clock when they do their job without pay, and with their employer’s knowledge.

Employees perform work off the clock when they, for example:

• prepare their workstation before their shift begins,
• clean up or wind down their workstation after their shift ends,
• finish paperwork after clocking out,
• do work during their rest or meal break, or
• fix mistakes or errors at their employer’s request after their shift ends.

Even working for just a few minutes before clocking in or after clocking out can run afoul of California’s employment law and amount to wage theft.⁶

However, if the employer is unaware of the off-the-clock work, they might not be held liable for the employee’s wages that went unpaid in the payroll period.

3. They require rest or meal breaks

California’s payroll laws also require employers to provide non-exempt workers with meal breaks and rest breaks. The specifics of those breaks will depend on how long the worker is on the clock.

For example, California employees are entitled to the following breaks:

• a 30-minute lunch break, if they work more than 5 hours in a workday,
• a second 30-minute meal break, if the worker is on the clock for more than 10 total hours in a day, and
• a 10-minute rest break for every 4 hours of work, if the employee works more than 3.5 hours in a day.⁷

During these rest periods, employers are not allowed to have the worker “on call.”⁸

As much as feasible, these breaks have to come in the middle of the employee’s work shift.⁹

If the employer does not comply with these requirements, workers can be entitled to 1 hour of pay, at their regular rate of pay, for each break that was not provided.¹⁰

4. They set California’s minimum wage

California’s payroll laws also set the state’s minimum wage. They forbid California employers from paying employees less than that wage, unless a valid exception applies.¹¹

Year	California minimum wage for employers with 25 or fewer employees	California minimum wage for employers with 26 or more employees
2021	$13.00/hour	$14.00/hour
2022	$14.00/hour	$15.00/hour
2023	$15.50/hour	$15.50/hour
2024	$16.00/hour	$16.00/hour

Cities and municipalities in the state of California are free to set a higher minimum wage within their borders. Some cities in California have done this, like:

• San Jose, where the minimum wage is $17.55 per hour,¹²
• San Francisco, where the hourly rate is $18.07 per hour,¹³ and
• Berkeley, where it is also $18.07 per hour.¹⁴

In these jurisdictions, employers have to pay employees this higher rate.

There are several exceptions to California’s minimum wage law. They include:

• workers in national service programs, like AmeriCorps,¹⁵
• outside salespeople,¹⁶
• student employees,¹⁷ and
• handicapped employees working in authorized nonprofits or rehabilitation facilities.¹⁸

However, service workers who make a significant portion of their income from tips, like waiters, are not exempt from the minimum wage.¹⁹

5. They require employers to pay discharged workers

California workers should also know that they are entitled to their accrued pay and benefits if they are discharged, including through a layoff. This payment of wages includes compensation for unused vacation time, in addition to the worker’s final wages.²⁰

Workers under a collective bargaining agreement may also be entitled to compensation for unused sick leave or other time off, like leave to care for family members.

Discharged workers are entitled to a final paycheck, pay stub, or direct deposit with these payments for their last pay period at the time of their termination, or reasonably after their last day of work, so long as the worker provided 72 hours’ notice of resignation. This does not necessarily have to be written notice. If adequate notice was not given, the worker’s wages have to be paid within 72 hours, or 3 calendar days. Employers who fail to pay former employees their unpaid wages after discharge may be charged a waiting time penalty.

What can I do if my employer violated one of these employment laws?

If your employer has violated one of these employment laws, you may be entitled to compensation. That compensation often comes in the form of:

• back pay,
• the unpaid balance from the payroll violation,
• interest, and
• reasonable attorney’s fees and court costs.

Recovering this compensation is made easier by California state law’s requirement that employers keep detailed payroll records.²¹ This includes information like:

• the name of the employee and the last 4 digits of their social security number (SSN),
• the worker’s gross wages and net wages, if they are hourly or salaried,
• the number of units produced and the applicable piece rate, if the employee is a piece rate worker,
• hours worked during the workweek, and
• details about the payroll period, like if the regular payday is weekly, biweekly, or semimonthly.

You can demand this compensation by filing a wage and hour lawsuit against your employer or former employer.

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