Employer of Record for California

Guide to Hiring Employees in California

Your guide to hiring employees in California, covering employment and labor laws, payroll, benefits, onboarding and taxes. You can also manage and pay your contractors in California through Playroll.

Famous Photo Of California Landmark
Iconic Image Of California

Capital City

Sacramento

Timezone

PST

(

GMT -8

)

Paid Leave

No legal requirement

Income Tax

1%-13.3%

Employer Tax

7.65%

Leave The hiring to a local expert

Hire in California with ease—our experts handle employment and compliance for you.

Enquire Now

How to Hire Employees In California

Hiring in California for the first time can be challenging, especially with the state's complex employment laws. Whether you're hiring independent contractors, setting up a legal entity, partnering with a PEO, or using an Employer of Record (EOR), it's essential to understand the local employment landscape. Playroll's comprehensive guide is here to help, whether you're onboarding local talent or relocating team members.

Here are four primary ways companies can hire employees in California:

  • Establishing a local entity: Creating a legal entity in California allows for direct hiring, but it can be costly and time-consuming. However, it gives you full control over employment and reduces risk exposure.
  • Partnering with an Employer of Record (EOR): An EOR, like Playroll, takes on the legal responsibilities of employment, acting as the employer on your behalf. This option streamlines hiring, payroll, and compliance with California’s labor laws, helping you hire in California without navigating the complex legal landscape yourself.
  • Working with a Professional Employer Organization (PEO): A PEO, such as Playroll, co-employs your team, managing essential HR functions like payroll, benefits, and compliance. Partnering with a PEO ensures you meet California’s labor regulations while offering competitive employee benefits.
  • Hiring independent contractors: Hiring independent contractors can be more cost-effective, but California has strict contractor classification rules. Proper classification is essential to avoid penalties for misclassification when hiring in California.

Complying with California specific employment regulations and federal laws is critical to avoiding legal risks and costly fines. Our guide focuses on hiring in California, employment compliance, and how Playroll’s services can support your business as you navigate the complexities of hiring in the state.

Good To Know

California enforces strong worker protections, including strict regulations on meal and rest breaks.

The state has progressive environmental policies, influencing workplace practices, especially in urban areas.

California’s diverse economy spans tech, entertainment, agriculture, and tourism, offering varied employment opportunities.

Key Things to Know About Hiring in California

Do I need an EIN or Payroll Tax Number to Employ in California?

Employers in California are required to have both a Federal Employer Identification Number and a California payroll tax number to hire employees. 

Working Hours in California 

Standard working hours are 8 hours per day and 40 hours per week. 

What is considered full-time employment in California?

There is no mandated amount of hours. However, 35 to 40 hours per week is generally considered full-time.

Probation Period in California

Probation periods are not legally mandated, either federally or by state laws. 

California Employment Laws for Hiring

Minimum wage in California

As of January 1, 2024, California's statewide minimum wage is $16.00 per hour for all employers.

  • However, several cities and counties in California have established local minimum wages that exceed the state rate. 
  • For instance, as of 2024, San Francisco's minimum wage is $18.07 per hour, and West Hollywood's is $19.08 per hour.

California Anti-Discrimination Laws

Employees may not be unfairly discriminated by against:

  • Biological sex,
  • Race and national origin,
  • Age (applies to individuals between 40 and 70 years of age),
  • Pregnancy, child, or spousal support withholding,
  • Sexual orientation,
  • Gender and gender identity,
  • Religion,
  • AIDS/HIV status, and
  • Disability (mental, physical)
  • Genetic information.
Famous California Landmark

Onboarding New Hires in California

We can help you get your new employee started in California fast, with a minimum onboarding time from just 1-2 working days. Note that the timeline is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Playroll platform.

For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.

Please note that payroll cut-off dates can impact the actual first day of employment. Playroll’s payroll cut-off date is the 10th of the month, unless otherwise specified.

Payroll Services For California

Californian law mandates that employers pay employees at least twice a month. This requirement ensures employees are paid no less frequently than semimonthly.

  • Employers must provide wages at least twice monthly, with no more than 16 days between pay periods.
  • While twice-monthly is the minimum, employers may choose more frequent cycles, such as biweekly (every two weeks) or weekly.

Looking to grow your team in California?

Stay Compliant: Navigate California’s complex labor laws with ease.

Affordable Solution: Reduce costs with a budget-friendly EOR option.

Top-Tier Benefits: Access competitive California and federal employee benefits for a stronger team.

Book a Demo Default Icon Hover Icon

Overview of Employment Taxes in California

Employers and employees are responsible for specific employment taxes that contribute to federal and state programs, supporting benefits such as unemployment insurance, disability, and healthcare.

Employer Tax Contributions

Employment Tax TypeTax Rate
Unemployment Insurance (UI)3.% on the first $7,000
Employment Training Tax (ETT)0.1% on the first $7,000
State Disability Insurance (SDI)1.1% of employees salary
California Personal Income TaxUp to 12.3% of the employees salary

Employee Payroll Tax Contributions

Employees are subject to several payroll taxes, contributing to state programs and federal benefits.

Employee Payroll Tax ContributionTax Rate
State Disability Insurance (SDI)1.1% of gross wages
Personal Income TaxUp to 12.3% of gross wages
Social SecurityAs per federal legislation
MedicareAs per federal legislation

Tax Due Dates in California

In the United States, both federal and California state income tax returns are typically due on April 15 each year. If April 15 falls on a weekend or holiday, the deadline is extended to the next business day. California has, in certain years, provided automatic extensions for state tax filings, differing from the federal schedule.

Pension in California

In California, private-sector employers with five or more employees must offer a retirement plan (this is going to extend to employers with 1 -4 employees with deadline for compliance being 31 December 2025).  If they don’t already have one, they’re required to enrol in the state-sponsored CalSavers program. This program is easy to set up and doesn’t require employer contributions—employers simply facilitate employee participation. Employees are automatically enrolled but have the choice to opt out, and they can adjust their contribution rates from the default setting. Employers who already offer a qualified retirement plan can certify their exemption from CalSavers.

Info Icon

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in California tailored to your needs.

CTA Image showing employees in various countries across the globe
Employee Cost Calculator

Get an instant breakdown of the true costs of hiring in California.

Calculate Now Default Icon Hover Icon

Benefit Requirements for Employers in California

Employers are subject to specific requirements regarding employee benefits, which vary based on company size and employee status. These benefits include health insurance, retirement plans, and other forms of assistance. Meeting these requirements ensures compliance and enhances a company’s offerings to its workforce.

Are employers required to provide health insurance in California?

Employers with 50 or more full-time employees must offer health insurance under the federal Affordable Care Act. Smaller businesses are not required to provide health coverage, though many choose to offer it to attract and retain talent. State health insurance marketplaces, such as Covered California, provide affordable plan options for those without employer-provided coverage.

Do part-time employees get benefits in California?

Part-time employees are not automatically entitled to the same benefits as full-time employees unless the employer’s policy includes them. However, employers may choose to extend health insurance, paid leave, or other benefits to part-time employees. Eligibility may depend on hours worked, with employees averaging 30 or more hours per week often qualifying for benefits similar to those provided to full-time employees.

Are employers required to offer 401k in California?

In California, private-sector employers with five or more employees are required to provide a retirement plan, either by offering a traditional 401(k) or enrolling in the CalSavers program if no other plan is available.

It’s Easy To Manage Benefits For Employees In California With Playroll

Paid and Unpaid Leave Policies in California

Is vacation leave mandatory in California?

There is no legal requirement for the employer to provide the employee with paid or unpaid vacation leave.  However, providing employees with 10-15 days of paid leave is common in California. 

What are Mandatory Leave Entitlements in California?

Type of LeaveTime PeriodMandatoryPay StatusEligibility Criteria
Annual LeaveN/ANoPaid (Full)Varies on internal policies
Maternity Leave90 daysYesPFL offers a partial benefit capped at 1,620 USDWorked at least 30 days, within 12 months.
Paternity Leave90 daysYesPFL offers a partial benefit capped at $1,620Worked at least 12 months of service of which 1,250 hours have been worked.
Sick Leave40 hours or five days off each year or under an accrual plan where the employee must earn at least one hour of paid sick leave for every 30 hours workedYesPaid (Full)Must have worked at least 30 days within a year and completed a 90-day employment period before taking leave
Jury Service LeaveThe expected duration of the jury service.YesUnpaidAll employees who have been summoned to court.
Voting Time LeaveAt least 2 hoursYesPaid (Full)Eligible to all employees
School leave40h per calendar yearYesUnpaidFor employees with school-age children, employers must allow unpaid time off for general school involvement activities.
Military LeaveFor entire development for active members.NoUnpaidAny active service member of the Armed Forces, members of the National Guard or the Naval Militia or members of the state military reserve must be provided leave and the same conditions of employment upon their return.
Bereavement Leave5 daysYesUnpaidAny employee who has lost a family member or friend.

Paid Time Off in California

There is no requirement for employers to offer Paid Time Off (PTO) for personal use or vacation. However, if PTO is provided, it is treated as earned wages, meaning it cannot be forfeited. Employers must pay out unused PTO upon termination. Employers can set policies on accrual limits, caps, or usage terms, provided these comply with state regulations.

Maternity Leave In California

Maternity leave is supported through Pregnancy Disability Leave (PDL) and the Family Rights Act (CFRA). Under PDL, employees disabled by pregnancy or childbirth are entitled to up to four months of unpaid, job-protected leave for medical appointments, childbirth, and recovery. Following PDL, employees may take an additional 12 weeks of unpaid bonding leave under CFRA. While PDL and CFRA do not mandate paid leave, the Paid Family Leave (PFL) program offers partial wage replacement for up to 8 weeks, funded through employee payroll deductions.

Paternity Leave In California

Paternity leave is available under the Family Rights Act (CFRA), allowing new fathers up to 12 weeks of unpaid, job-protected bonding leave within the first year of a child’s birth, adoption, or foster care placement. The Paid Family Leave (PFL) program also provides partial wage replacement for up to 8 weeks to support bonding with a new child. PFL benefits are funded by employees and do not provide job protection, though CFRA can be used to secure job reinstatement.

Sick Leave In California

Paid sick leave is required, with a minimum accrual rate of one hour for every 30 hours worked. Employers may set a minimum entitlement of 24 hours or three days per year. Sick leave can be used for personal illness or to care for family members. Unused sick leave can carry over to the following year, with a maximum accrual cap of 48 hours or six days.

Military Leave in California

Employees who serve in the military are entitled to leave under both federal (USERRA) and state laws, which provide job reinstatement rights and protections for benefits and seniority. Additional provisions also apply to employees called to state military service or emergency duty, such as the National Guard.

Jury Duty in California

In California, employers are not legally obligated to pay employees for time spent on jury duty, but they must allow unpaid leave and cannot penalize anyone for serving. Some companies offer paid jury duty leave as part of their benefits, though it’s not required. Employees can often use vacation or paid time off if they choose, but employers may not force them to. Starting from the second day of service, California courts provide jurors with a $15 daily stipend and a mileage reimbursement.

Parental Leave In California

The Family Rights Act (CFRA) provides up to 12 weeks of unpaid, job-protected leave for new parents to bond within the first year after a birth, adoption, or foster placement. The Paid Family Leave (PFL) program offers up to 8 weeks of partial wage replacement for bonding time, though PFL does not guarantee job protection.

Bereavement Leave

Employers with five or more employees must provide up to five days of leave following the death of a family member. This leave can be unpaid unless an employer’s policy offers pay.

Voting Leave

Employers must allow up to two hours of paid leave for employees to vote in state elections if there is insufficient time outside work hours.

School Leave

Employers with 25 or more employees at the same location must provide up to 40 hours per year of unpaid leave for participation in children’s school activities.

Employment Termination Protocols in California

Termination Process in California

In California, employment is generally "at-will," meaning either the employer or employee can end the employment relationship at any time, with or without notice. However, employers must follow key requirements:

  • Final Pay: If an employee is terminated, the final paycheck must be provided on their last day. For resignations, it’s due within 72 hours, or on the last day if the employee gave 72 hours’ notice.
  • Unused Vacation: Any accrued vacation or PTO must be paid out with the final paycheck.
  • Health Coverage: Employers must inform departing employees of their COBRA rights if applicable.

Notice Period in California

There is no general requirement for employers to provide advance notice before terminating an employee. However, under the Worker Adjustment and Retraining Notification (WARN) Act, employers with 75 or more employees must provide 60 days’ notice if conducting a mass layoff, plant closure, or significant downsizing affecting a substantial number of employees.

Severance in California

California law does not require severance pay, though it may be offered at the employer's discretion.

Back to Top

Copied to Clipboard

Woman with glasses
Woman with glasses

Take your business to new places

Employer of Record for California

  • hire icon Hire employees without entity setup.
  • handshake icon Full compliance, we assume 100% liability.
  • gift icon Handle local payroll and benefits seamlessly.
  • headphones icon 24/5 responsive real-human support.
  • money icon Transparent pricing, no hidden fees.

FAQS

FAQs About Hiring In California

What is the minimum wage in California?

As of January 1, 2024, California’s minimum wage rates are:

  • $16.00 per hour for employers with 26 or more employees.
  • $15.50 per hour for employers with 25 or fewer employees.
  • Applies across all sectors.
  • Adjusted annually based on inflation.

Playroll makes growing your team in California effortless. Ready to start?

The HR Platform built to scale your global team.