California HR Compliance for Startups

Final Pay Requirements

California requires that involuntary terminations receive final pay immediately on the day of termination. Voluntary resignations require final pay within 72 hours (or immediately if 72 hours notice is given). This includes all accrued, unused PTO. Penalties for late final pay are significant (waiting time penalties of up to 30 days of wages).

PTO and Paid Sick Leave

California prohibits use-it-or-lose-it PTO policies. Accrued PTO is treated as earned wages and must be paid out at termination. The state generally requires at least 5 days or 40 hours of paid sick leave per year; accrual, use, carryover, caps, and exemptions depend on the applicable rules. Check current California Labor Commissioner guidance.

Minimum Wage

California's statewide minimum wage is $16.90 per hour in 2026. Higher minimums apply to some fast-food and health-care workers, and some cities and counties set higher rates. Check current state and local requirements.

Overtime Rules

California has daily overtime requirements that are stricter than federal law. Overtime is owed for any hours over 8 in a day (not just over 40 in a week). Double time applies for hours over 12 in a day. This significantly affects scheduling and cost calculations.

Exempt Employee Salary Threshold

For the standard executive, administrative, and professional exemptions, California's salary test generally requires at least twice the state minimum wage for full-time work ($70,304 per year in 2026), in addition to meeting the duties test. Other exemptions and rules may apply.

Harassment Prevention Training

Companies with 5+ employees must provide sexual harassment prevention training. Supervisors need 2 hours of training within 6 months of hire and every 2 years. Non-supervisory employees need 1 hour within 6 months and every 2 years.

California Privacy Rights Act (CPRA)

Employers are subject to CPRA obligations for employee personal data. California employees have rights to know, access, correct, and delete personal information held by their employer. Implement a privacy notice for employees and a data handling policy.

Required Workplace Postings

California requires numerous workplace posters beyond federal requirements, including DFEH anti-discrimination, workers comp, SDI, and paid sick leave notices. Use the CA DIR poster builder tool to get current required posters.

Sources & References

• California Labor Commissioner — Minimum Wage
• California Labor Commissioner — Paid Sick Leave