California Employment Law Resources

Essential guides for California business owners and HR professionals

PAGA Compliance

AB 5 Classification

FEHA & Harassment

Wage & Hour

Leave Laws

Termination

PAGA Compliance Guide

Private Attorneys General Act - California's Most Dangerous Employment Law

What is PAGA?

The Private Attorneys General Act allows individual employees to sue employers on behalf of the State of California and all affected employees for Labor Code violations.

Why PAGA is Dangerous:

  • No Class Action Waiver: PAGA lawsuits cannot be waived by arbitration agreements
  • Massive Penalties: $100 per employee, per pay period, per violation (initial). $200 for subsequent violations
  • One Employee = Entire Workforce: One complaint can represent your entire company
  • Attorney Fees: Plaintiff attorneys receive 25% of penalties + their attorney fees

Common PAGA Violations:

Meal Break Violations

Not providing 30-minute meal break before end of 5th hour. Most common PAGA claim.

Example: 50 employees × 2 violations/week × 52 weeks × $100 = $520,000

Rest Break Violations

Not providing 10-minute rest break per 4 hours worked.

Example: 50 employees × 1 violation/week × 52 weeks × $100 = $260,000

Wage Statement Errors

Inaccurate or incomplete wage statements (pay stubs).

Example: 50 employees × 24 pay periods × $100 = $120,000

Final Paycheck Delays

Not providing immediate final paycheck upon termination.

Example: 10 terminations × $100 = $1,000 + waiting time penalties

How to Prevent PAGA Claims:

  1. Audit Meal & Rest Break Policies: Ensure you're offering (and documenting) breaks
  2. Review Wage Statements: Verify all required information is included
  3. Train Managers: Ensure they understand California break rules
  4. Document Everything: Meal break waivers, premium pay for missed breaks
  5. Fix Issues Immediately: PAGA penalties increase after first violation

Get a Free PAGA Risk Assessment

We'll identify your top PAGA exposures and provide an action plan ($500 value)

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AB 5 Independent Contractor Classification

California's Strict ABC Test for Independent Contractors

What is AB 5?

AB 5 codifies the "ABC test" for determining whether a worker is an employee or independent contractor in California. It's one of the strictest tests in the nation.

The ABC Test:

To classify someone as an independent contractor, you must prove ALL THREE:

A

Control & Direction

The worker is free from your control and direction in performing the work, both under contract and in fact.

Pass: Worker sets own hours, methods, location

Fail: You require specific hours, provide training, supervise

B

Outside Usual Business

The work performed is outside the usual course of your business.

Pass: Restaurant hires accountant (not usual business)

Fail: Restaurant hires cook (core business)

C

Established Trade

The worker is customarily engaged in an independently established trade, occupation, or business of the same nature.

Pass: Worker has LLC, multiple clients, business cards, website

Fail: Worker only works for you, no separate business

Consequences of Misclassification:

  • Back Wages: Overtime, minimum wage, meal/rest break premiums
  • Penalties: $5,000-$25,000 per misclassified worker
  • Tax Liability: Employment taxes + interest
  • PAGA Exposure: Misclassification is a PAGA violation

Example Cost: 10 misclassified workers for 2 years = $500,000 - $1,000,000+

AB 5 Classification Review

We'll review all your independent contractor relationships against the ABC test

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California Employment Law Quick Reference

FEHA

Fair Employment & Housing Act

  • Covers employers with 5+ employees
  • Broader protections than federal law
  • Mandatory harassment training required
  • Must investigate complaints promptly

Wage & Hour

California-Specific Rules

  • Min wage: $16.50/hour (Current 2026)
  • Overtime after 8 hours/day
  • Double time after 12 hours/day
  • 30-min meal break before end of 5th hour
  • 10-min rest break per 4 hours

Leave Laws

CFRA, PDL, Paid Sick Leave

  • CFRA: 5+ employees (not 50 like FMLA)
  • PDL: Up to 4 months pregnancy leave
  • Paid Sick: Min 40 hours/year
  • Both parents can take leave together

Termination

Final Paycheck Rules

  • Employer fires: Immediate payment
  • Employee quits: Within 72 hours
  • Must include all accrued vacation
  • Waiting time penalty: up to 30 days wages

Free Downloads

Top 10 PAGA Risks Checklist

Identify your biggest PAGA exposures in 10 minutes

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California Meal Break Policy Template

Ready-to-use meal and rest break policy

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AB 5 Classification Flowchart

Visual guide to the ABC test

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California Termination Checklist

Ensure you meet all final paycheck requirements

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