Small business owners should understand all of the information provided by the California Department of Industrial Relations (DIR). The webpage stresses the importance of following all proper payroll guidelines, withholding payroll for federal and state taxes, and workplace posting obligations as well as required insurance policies.

When a small business owner is not familiar with the many California labor laws, they will be at risk of putting their business in jeopardy. The high stakes for a company mean that small businesses need to ensure compliance with all applicable laws, but checking all of these details can be overwhelming and you should turn to an experienced small business lawyer for help making sure that your business is following all of the necessary rules and regulations.

Labor Law Basics

The first thing a small business owner must understand is that the minimum wage in California is $15 per hour for employers with 26 or more employees and $14 per hour for employers with 25 or less employees, but there are cities or counties that have higher minimum wages than the state rate. The University of California Berkeley (UC Berkeley) offers a helpful list of city and county minimum wages in California.

Overtime must be paid to a nonexempt employee 18 years of age or older, or any minor 16 or 17 years of age not required by law to attend school and not otherwise prohibited from engaging in the subject work when they are employed more than eight hours in any workday or more than 40 hours in any workweek unless they receive one and one-half times their regular rate of pay for all hours worked over eight hours in any workday and over 40 hours in the workweek. Double time must be paid for all hours worked in excess of 12 hours in any workday and all hours worked in excess of eight on the seventh consecutive day of work in a workweek.

Employers also cannot force employees to work off-the-clock, as all time spent working must be paid. Paychecks must be paid at least twice a month, with a final paycheck being due on the same day as termination.

Paid time off (PTO) is not required, but unused vacation days have to be cashed out when an employee leaves. Small businesses must also offer at least 24 hours or three days of paid sick leave per year.

Advertising Laws

California’s unfair competition law (UCL) is found under California Business and Professions Code § 17200 and prohibits unlawful, unfair, or fraudulent business practices as well as false, deceptive, or misleading advertising. Lawsuits may be brought by consumers or businesses affected by these actions.

The California Consumers Legal Remedies Act (CLRA) is found in California Civil Code § 1750 and makes several methods of competition and unfair or deceptive acts or practices unlawful when undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer. California Civil Code § 1770(a) further outlines 28 different unfair methods of competition and unfair or deceptive acts or practices. 

California Business and Professions Code § 17500 makes false or misleading statements in advertising a criminal offense punishable by jail time. Victims of false advertising can sue a company for damages if they can prove that the business lied about a material fact, the person purchased a product based on the lie, and the person suffered financial harm as a result of the transaction. 

Other Laws of Concern

Small businesses will also want to ensure that they are compliant with relevant fraud or anti-money laundering laws. This is often accomplished by verifying the identity of all users, clients, and customers through electronic identity verification services.

Environmental laws can be another concern for some small businesses. Failure to abide by certain federal protections can lead to a visit from the Environmental Protection Agency (EPA).

There are also data security, privacy protection, and finance and tax laws that small business owners must be concerned about. 

Speak with an Experienced Mountain View Small Business Attorney

Kalia Law P.C. helps small businesses all over California get started, grow their companies, and protect the businesses. We help small businesses with various concerns, ranging from forming an entity to filing essential paperwork to creating other critical business documents.

Our firm offers a professional flat fee for business legal services. You can call (650) 701-7617 or contact us online to schedule an initial appointment.

- Claire Kalia

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