Classification of Employees in California

Hiring new employees is an exciting time in your business. However, it usually raises questions related to classification of employees, especially in California. Wage and hour laws in California are some of the most stringent in the nation.  Below is some basic information on the classification of employees. This is not an all-inclusive list.

Independent Contractor

  • An independent contractor is not an employee of the company, nor should be treated as such.
  • An independent contractor does not work exclusively with one company.
  • Protect yourself by having an Independent Contractor Agreement. This will protect your business by defining the Working Relationship and the scope of the work to be performed.

Exempt Employee

  • Exempt employees are not entitled to overtime pay, however there are regulations regarding their minimum wage, as well as paid time off.
  • Exempt employees need to fit the strict criteria for the classification of an exempt employee.
  • Protect yourself by consulting with a business attorney on classification issues. Additionally, although an exempt employee is not required to clock in and out it is a good idea to have this recorded. Having this record will assist you if your employee feels that they have been misclassified.

Non-exempt Employee

  • Non-exempt employees are eligible for overtime pay. It is crucial to always have non-exempt employees clock in and out.
  • Non-exempt employees have a minimum wage requirement, as well as required break and sick leave.
  • Protect yourself by consulting with a business attorney to make sure you are abiding by labor laws.

Having an employee handbook is also very important in protecting your business.

California has very stringent employment laws that are actively enforced.  Contact our office at 916-333-0833 to set up a consultation to discuss your employment concerns. Ask us about our seminars on Employment Issues for Business Owners.

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