Overview of Hiring Laws in California

California employment laws exceed federal requirements to provide workers with additional protections during recruitment, hiring, and onboarding. The state’s Division of Labor Standards Enforcement (DLSE) enforces most of these rules to ensure compliance with wage, hour, and employment standards.

One of the most notable differences between California and federal law lies in meal and rest period regulations.

These rules underscore California’s increased emphasis on employee well-being and workplace fairness.

California Hiring Laws

Anti-Discrimination and Equal Opportunity Laws

California’s Fair Employment and Housing Act (FEHA) prohibits discrimination in hiring, promotion, and other employment practices based on protected characteristics such as:

• Race, colour, national origin, or ancestry
• Religion
• Sex, gender identity, gender expression, or sexual orientation
• Marital status
• Disability or medical condition
• Age (40 and above)
• Military or veteran status

Employers are also required to provide reasonable accommodations for individuals with disabilities or pregnancy-related needs unless it causes undue hardship.

Pay Equity and Wage Transparency

The California Equal Pay Act ensures that employees performing substantially similar work are paid equally, regardless of gender, race, or ethnicity. Employers must also disclose a pay scale range in job postings for positions that may be performed in California.

As of 2023, businesses with 15 or more employees are required to include pay information in job advertisements and submit annual pay data reports to the state.

Background Checks and Criminal History Rules

California follows a “ban the box” approach. Employers with five or more employees cannot ask about an applicant’s criminal history until a conditional job offer has been made.

If a conviction is revealed, the employer must perform an individualised assessment considering:

• The nature and gravity of the offence
• The time has passed since the conviction or sentence.
• The relevance of the offence to the job role

Applicants also have the right to respond or dispute background check findings before any final hiring decision is made.

I-9 and Employment Eligibility Requirements

Like all U.S. states, California employers are required to verify the identity and employment eligibility of new hires using Form I-9. However, California law prohibits employers from re-verifying employees unnecessarily or using E-Verify beyond federal requirements unless mandated by law or contract.

Employers must store completed I-9 forms securely and make them available for inspection by authorised government officials when requested.

State-Specific Hiring Rules

California enforces additional hiring-related requirements beyond federal standards:

Penalties for Non-Compliance in California

California takes non-compliance seriously. Employers who fail to follow state hiring laws can face significant financial and legal consequences.

• Fines and Penalties: Employers may be required to pay back wages, interest, and civil penalties for violations, such as failing to provide meal breaks or engaging in discriminatory hiring practices.
• Employee Lawsuits: Employees can file complaints with the California Department of Fair Employment and Housing (DFEH) or pursue civil lawsuits for discrimination or retaliation.
• Public Record of Violations: Certain wage-and-hour violations become a matter of public record, potentially affecting a company’s reputation.

Example: In 2023, a retail chain in Los Angeles was fined over $1 million for failing to provide employees with proper rest and meal breaks. The DLSE ordered back pay and penalties, emphasising the importance of compliance with state labor standards.

Notice and Documentation HRs Need to Know

HR professionals must maintain the following key documents to stay compliant:

• Signed Acknowledgment of Wage and Hour Policies- Employers must provide written wage and hour policies outlining meal and rest break rules, overtime eligibility, and pay schedules. Employees should sign and date these acknowledgments, confirming that they have read and understood the terms.
• Completed Form I-9s for All New Hires- Federal law requires all employers to verify an employee’s identity and eligibility to work in the U.S. via Form I-9. These forms must be completed within three business days of hire and stored securely for the required retention period, either three years after the hire date or one year after termination, whichever is later.
• Pay Scale Documentation in Job Postings- Under California’s pay transparency laws, employers with 15 or more employees are required to include pay scale ranges in job postings. HR must retain records of these pay ranges and job descriptions for a minimum of three years, ensuring consistency between published pay data and actual compensation.
• Training Completion Records for Harassment Prevention- Employers with five or more employees are required to conduct sexual harassment prevention training every two years, consisting of two hours for supervisors and one hour for non-supervisory staff. HR must maintain attendance logs, training dates, and materials used as proof of compliance with relevant regulations.
• New Hire Reporting to the EDD- All new hires and rehires must be reported to the California Employment Development Department (EDD) within 20 calendar days of their start date. Reports should include the employee’s name, address, Social Security number, and the employer’s FEIN. This supports child support enforcement and helps detect unemployment insurance fraud.
• Written Policies on Non-Discrimination and Equal Opportunity- Employers are required to display clear, written policies outlining their commitment to equal employment opportunity and non-discrimination. These policies should be included in employee handbooks and posted in visible areas of the workplace to ensure accessibility for all staff.
• Retention of Job Applications and Interview Notes- While not always mandatory under federal law, California employers are advised to retain job applications, interview notes, and hiring records for a minimum of two years. This documentation can be critical if hiring decisions are later questioned or challenged.
• Posters and Workplace Notices- Certain notices, such as those covering minimum wage, discrimination, family leave rights, and workers’ compensation, must be displayed prominently in the workplace. HR should routinely verify that all state and federal posters are up-to-date and clearly visible to employees.