Hiring & Administering Employees
Following the Proper Payroll Guidelines
The minimum wage in California is $13 per hour for employers with 26 or more employees and $12 per hour for employees with 25 or fewer employees. Employees are entitled to be paid the highest minimum wage of federal, state, or local minimum wages.
DIR has FAQs on minimum wage requirements.
In California, the general overtime provisions are that a nonexempt employee 18 years of age or older, or any minor employee 16 or 17 years of age who is not required by law to attend school and is not otherwise prohibited by law from engaging in the subject work, shall not be employed more than eight hours in any workday or more than 40 hours in any workweek unless he or she receives one and one-half times his or her regular rate of pay for all hours worked over eight hours in any workday and over 40 hours in the workweek. Eight hours of labor constitutes a day's work, and employment beyond eight hours in any workday or more than six days in any workweek is permissible provided the employee is compensated for the overtime at not less than:
One and one-half times the employee's regular rate of pay for all hours worked in excess of eight hours up to and including 12 hours in any workday, and for the first eight hours worked on the seventh consecutive day of work in a workweek; and
Double the employee's regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.
DIR has FAQ's on overtime requirements.
Paydays, Pay Periods, & Final Wages Info
In California, wages must be paid at least twice during each calendar month on days designated in advance as regular paydays. Wages earned between the 1st and 15th days, inclusive, of any calendar month must be paid no later than the 26th day of that month, and wages earned between the 16th and the final day of the month must be paid by the 10th day of the following month.
Depending on the industry or employee classification, certain employees may have certain payroll requirements.
DIR has FAQ's on Paydays, Pay Periods, & Final Wages requirements.
The Prevailing Wage only applies to public works projects, which may not affect many small businesses, but if you are a carpenter or work in any of the building trades, Prevailing Wage may apply to your work. Prevailing Wage is the basic hourly rate paid on public works projects to a majority of workers engaged in a particular craft, classification, or type of work within the locality and in the nearest labor market area.
Withholding Payroll for Federal & State Taxes
Employers are responsible for regularly filing employees’ withheld state and federal income taxes and payroll taxes as well. Due to the complex nature of income and payroll taxes, it is advised that you consult with or retain a Certified Public Accountant or accounting firm.
More information on California taxes can be found at the Governor’s GO-Biz website.
For more federal tax information, please visit the IRS’ Employment Taxes page.
Workplace Posting Obligations
There are several items that your employees have a right to know, and must be brought to their attention. It is your responsibility as an employer to post this information. Workplace safety notices and emergency phone numbers, payday notices, minimum wage information, workers’ compensation insurance information, no smoking notices, whistleblower protections, log and summary of occupational injuries and illnesses, and discrimination/harassment notices are some examples of the workplace postings that must be always on display for employee review.
A full list of those notices, as well as printouts of each poster is available here.
Obtaining Required Insurance Policies
Workers’ Compensation Insurance
If you have just one employee, California law requires you to carry a workers’ compensation insurance policy. Or, if you are starting a small roofing business and you’re the only employee, you must also carry a workers’ compensation policy. Payment of premiums is the responsibility of the employer, and employees cannot be asked to help pay for it. As mentioned above, information regarding coverage and where to get medical care if injured must be posted in a conspicuous place at your worksite.
Your workers’ comp claims administrator – generally your insurance carrier or a third party administrator if you are self insured and have one – will be able to provide all claim forms in any amount you may need. Should you need to obtain any forms otherwise, they are available at the DWC website.
Here is a link to frequently asked questions on the DWC website.
Unemployment Insurance is paid by the employer as well. New employers pay 3.4 percent for a period of two to three years. More information on Unemployment Insurance is available from the Employment Development Division here.
Disability Insurance, or SDI payments are withheld from employee paychecks and remitted to the state for State Disability Insurance. More information on employer requirements to the State Disability Insurance fund can be found here via the Employment Development Department.
Alternative Work Weeks allow employees and supervisors to mutually agree upon a varied distribution of their normal work hours. The number of hours worked do not change, the work schedules are merely rearranged so individuals have the flexibility to better meet personal needs while maintaining the same work load. A listing of all California employers that have filed alternative workweek election results can be found on the Labor Commissioner’s website.
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