Business owners must be aware of California’s complex labor laws

Before beginning a business or hiring employees, business owners should become familiar with unique worker protection laws

California is known as one of the most worker-friendly states in the nation. Worker protection laws are numerous and stringently enforced. While treating employees well is the goal of any business, it can be difficult keeping up with state regulations and the administrative burden of labor laws.

In 2015, almost two dozen new or revised worker protection laws will go into effect. Some of these are unique to California. Businesses looking to open or expand in California should be aware of some of the more unique aspects of California labor law:

  • Workers in California receive overtime if they work more than eight hours in a single day or more than forty hours in a week.
  • California requires an employee to make at least $720 per week, plus meet other criteria, in order to become exempt from overtime requirements
  • Workers must receive a 30 minute lunch break every five hours (with certain exceptions)
  • Workers must receive at least three paid sick days per year starting July 1, 2015
  • Non-compete clauses are almost impossible to enforce in California after termination of employment unless certain criteria is met

All of these laws exceed federal requirements. Perhaps one of the most significant advancements in California labor law, however, involves contract and temporary employees. Effective January 1, 2015, businesses which employ labor contractors will be responsible for providing full wages to contract workers, including overtime if applicable, and will also be liable if they fail to provide workers' comp coverage to those workers. Employers will be liable even if they pay the agency which employs the workers in full.

Labor laws only one consideration for new businesses

There are numerous legal issues to consider when starting a business in California. The structure of the business is only the beginning. If a business wants to expand and hire employees, the legal implications ratchet up considerably, even if the workers are temporary, seasonal or part-time.

Even businesses without employees still face significant legal considerations. For example, forming as a limited liability company allows for greater legal protection than operating as a sole proprietorship or as a general partnership. A well-designed operating agreement can also prevent future legal action, such as owner disputes , that may otherwise arise.

The attorneys at Mayfield Bustarde, LLP can help business owners in Southern California focus on their day-to-day operations, rather than legal considerations, by providing sound legal advice and services on a variety of legal issues.