Running a business in California means navigating one of the most complex and employee-friendly labor law systems in the United States. Employers must take proactive steps to stay compliant, especially with laws like the Private Attorneys General Act (PAGA), which empowers employees to sue for labor code violations. Non-compliance can result in costly penalties, legal fees, and reputational damage. In this blog, we will share how California employers can ensure compliance with labor laws and avoid PAGA claims.
Why Compliance Matters
Under PAGA, employees can file lawsuits for various labor code violations, including unpaid wages, incorrect wage statements, failure to provide meal and rest breaks, and more. These claims don’t just involve the employee bringing the case—they can include penalties for all affected employees.
Ensuring compliance with California labor laws isn’t just good business practice; it’s essential for avoiding legal trouble.
Steps to Ensure Compliance With California Labor Laws
1. Conduct a Labor Law Compliance Audit
A regular, thorough audit is your first line of defense against PAGA claims. Key areas to assess include:
• Payroll practices: Are wages paid accurately and on time?
• Wage statements: Do they include all required details, such as pay period dates, total hours worked, and deductions?
• Meal and rest breaks: Are employees getting the breaks they’re entitled to?
Hire an employment law attorney or consultant to conduct an in-depth review of your company’s practices and identify any gaps in compliance.
2. Maintain Accurate Records
Documentation is critical. California employers are required to keep records for several years, including:
• Payroll records.
• Timecards and schedules.
• Meal and rest break logs.
• Employee agreements and policies. Having complete, well-organized records can help demonstrate compliance if a claim is filed.
3. Create Clear, Compliant Policies
Your employee handbook and workplace policies should reflect California’s labor laws. Include clear guidance on:
• Wage and hour compliance.
• Meal and rest break policies.
• Overtime rules.
• Reporting procedures for labor issues. Consult with legal experts to ensure these policies align with state requirements.
4. Provide Meal and Rest Breaks: California has strict rules regarding meal and rest breaks:
• Employees must receive a 30-minute meal break for shifts longer than five hours.
• A second meal break is required for shifts over 10 hours.
• Employees are entitled to a 10-minute rest break for every four hours worked.
Set up systems to track and ensure these breaks are provided. Train managers to respect and enforce these rights.
5. Classify Employees Correctly
Misclassification of employees as independent contractors is a common issue. Under California’s ABC test, workers are considered employees unless they meet strict criteria. Misclassification can lead to wage, hour, and benefit violations. Review all contractor relationships to confirm compliance.
6. Train Managers and Supervisors
Your management team plays a critical role in ensuring compliance. Provide training on California labor laws, including:
• Wage and hour requirements.
• Proper timekeeping practices.
• Handling employee complaints. Training should be updated regularly to reflect changes in the law.
7. Encourage Internal Reporting
Create a workplace culture that encourages employees to report labor concerns internally. Implement a clear, anonymous process for raising issues without fear of retaliation. Addressing concerns early can prevent them from escalating into PAGA claims.
8. Stay Updated on Labor Law Changes
California labor laws are constantly evolving. Sign up for updates from trusted legal sources and industry groups. Consider subscribing to employment law blogs, newsletters, or alerts to stay informed.
9. Implement Arbitration Agreements
Although arbitration agreements cannot eliminate all PAGA claims, they may limit class-action exposure. Work with an attorney to draft compliant agreements that include PAGA-related provisions.
10. Seek Professional Guidance
Partnering with an experienced employment law attorney is one of the best ways to ensure compliance. They can review your practices, provide guidance on new regulations, and help you navigate tricky situations.
The Benefits of Proactive Compliance
Proactively addressing labor law compliance offers several benefits:
• Reduced risk of lawsuits: Fewer violations mean less chance of being targeted in a PAGA claim.
• Improved employee relations: Employees are more satisfied when they feel their rights are respected.
• Cost savings: Avoiding penalties and legal fees helps protect your bottom line.
Taking these steps minimizes legal exposure and demonstrates your commitment to fair and ethical business practices.
Call Rupal Law for the Legal Guidance You Need to Protect Your Business
Staying compliant with California labor laws can feel overwhelming, but you don’t have to handle it alone. At Rupal Law, we specialize in helping employers protect their businesses from PAGA claims and other employment law challenges.
Call us today at (951) 460-0830 to schedule a consultation or fill out our form online. Let our experienced attorneys guide you through labor law compliance and safeguard your business against costly claims.
