FAQ for Small to Midsized Businesses and Startups

What is an “At will” employee?

California is considered an “at-will” state. This means that, in most cases, employees can be terminated at any time without notice. The law in California presumes employees are at will unless the employer provides clear indication otherwise. Exceptions include the use of an employment contract that it will only cause the employee to be terminated for good cause or for the violation of certain provisions listed within the contract. Signing such a contract can protect the employee from at-will status.

Regardless of an employee being considered at will, it is against the law in California for employers to terminate employees for discriminatory reasons, such as race, gender, disability, or sexual orientation. Additionally, an employer is in violation of the law if they fire an employee in retaliation for making a complaint regarding illegal activity, discrimination, or harassment.

Is there a difference between an Independent Contractor and an Employee?

There are important distinctions between independent contractors and employees. An independent contractor is a self-employed individual who has a written contract with a company to offer services for a fee. An employee is a person who works for a company in exchange for wages. Most people who provide services to a company are deemed to be employees.

It is of extreme importance that an employer correctly classifies workers as either independent contractors or employees. Failure to do so properly can result in lawsuits, substantial fines, and penalties.

When is an employee entitled to overtime pay?

The law in California states that all nonexempt employees who work in excess of eight hours in any given workday, or for the first eight hours worked on the seventh consecutive day of work, shall be paid one and one-half times the employee's regular rate of pay. For all hours worked in excess of 12 hours on any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek, the employee shall be paid double the employee's regular rate of pay.

In general, exempt employees are not paid an hourly rate and are not subject to overtime pay. An exempt employee is someone whose job is not subject to one or more sets of wage and hour laws and has job functions of those in administrative, executive, or professional positions.

I am a small business owner. Do I need to worry about discrimination laws?

Absolutely. The California Fair Employment and Housing Act (FEHA) protects a person's right to seek, obtain, and hold employment without discrimination because of race, religion, sex, age, disability, or sexual orientation, among other characteristics. Small businesses are also subject to California workplace harassment laws.

What questions cannot be asked in a job interview?

There are certain questions that the law in California prohibits from being asked during a job interview. Those include questions regarding:

  • The health and medical history of an applicant
  • Workers' compensation claim history
  • Race, religion, ancestry, physical disability, mental disability, medical condition, marital status, sex, age or sexual orientation
  • Criminal convictions

Additionally, FEHA prohibits an employer from requiring medical or psychological examinations until after a job offer has been made.

What is sexual harassment?

Sexual harassment in the workplace is considered to be any unwelcome sexual advance, request for sexual favors, unwelcome touching, sexist or sexual remarks or jokes, and/or other verbal or physical conduct of sexual nature, that directly or indirectly affect the employee in a negative way.

The law in California pertaining to sexual harassment originates from two sources. At the state level, FEHA prohibits sexual harassment in the workplace. At the federal level, Title VII of the Civil Rights Act of 1964 makes discrimination on the basis of a person's sex against the law.

Since FEHA is more specific and provides greater protections than Title VII, employees that have claims of sexual harassment in the workplace usually file a claim under state law when bringing a workplace sexual harassment lawsuit.

How should sexual harassment be reported?

Per FEHA, employees have the right to report sexual harassment to their employer and it is then the employer's responsibility to respond to a complaint with a complete investigation and to take effective action should it be determined that sexual harassment did occur. Further, it is against the law in California for an employer to discharge, expel or otherwise discriminate against a person who files a complaint, testifies or assists in any proceeding related to the complaint of the sexual harassment.

FEHA also protects employees if they choose to file a complaint, testify or assist in a proceeding against their employer, supervisor or coworker.

Does an employee handbook create a contract of employment?

In some circumstances, yes. California is one of 30 states that enforce the terms stated in an employment handbook. Therefore, a copy of the handbook must have been distributed and the language must be specific for it to be enforceable.

For example, language that says, “all employees will be treated fairly” may not be enforceable in court because the language is too broad. However, language that says something along the lines of, “employees will be fired only for just cause” contains specific language that a court may enforce. In such an instance, an obligation may be created on the part of the employer to employ the employee for a specific period of time.

However, if the handbook contains an explicit disclaimer, a court will likely not deem the document to be a contract of employment. An example of a disclaimer would be, “this document does not create a contract, and can be revoked at any time.”

A highly-skilled and vigilant employment lawyer can help protect your company from a myriad of employment claims and allow your company to focus on what it does best. For qualified and competent legal representation contact Mohsen Parsa today.