As your California small business expands and adds more employees, it’s crucial to understand that your legal obligations under California employment law are also growing and becoming more burdensome. To illustrate, here are some key employee count thresholds and some examples of the legal requirements that each threshold triggers. You should note that this is not a comprehensive list of legal requirements to which you will be subject, as many other California and federal employment laws will be applicable.
One Employee: Workers’ Compensation Insurance Required
Congratulations, you’ve just hired your first employee. You are now legally required to carry workers’ compensation insurance to cover that worker in case of a job-related injury or illness. Do not delay in obtaining coverage, failing to have workers’ compensation insurance is a misdemeanor punishable by a fine of no less than $10,000 and/or up to one year in county jail.
Five Employees: CFRA, Pregnancy Disability Leave
Your business is growing, you now have five employees. As a result, you must allow unpaid, job-protected leave under the California Family Rights Act (CFRA) for up to twelve weeks for an employee’s own serious health condition, for caring for a family member with a serious health condition, or for bonding with a new child. You also must provide up to four months of pregnancy disability leave for pregnant employees who become disabled because of such pregnancy and, as a result, are unable to perform their duties. These leaves can run back-to-back, which means that you may be required to provide nearly seven months of job-protected leave for an affected employee.
Ten Employees: Workplace Violence Prevention Plan
Starting in July 2024, businesses with ten or more employees working at premises open to the public must implement a written Workplace Violence Prevention Plan. This plan must, at minimum, address the following:
- Identifying who is responsible for implementing the plan
- Involving employees and their representatives
- Accepting and responding to reports of workplace violence and prohibit employee retaliation
- Communicating with employees regarding workplace violence matters
- Responding to actual and potential emergencies
- Developing and providing effective training
- Identifying, evaluating, and correcting workplace violence hazards
- Performing post incident response and investigations
If your business is subject to this requirement, it is crucial that you review and update your policies and procedures and develop a written plan to ensure compliance.
Determining Employee Count
It’s important to note that the method for calculating your employee count can differ across various employment laws. For the new Workplace Violence Prevention Plan requirement, the trigger is having at least ten employees working at a premises that is accessible to the public. Other laws may use a full-time equivalent (FTE) calculation based on total hours worked. Still others may be simply based on total head count.
As this overview illustrates, employment law requirements rapidly evolve as your California small business grows. Partner with a San Diego small business attorney at Bayside Counsel to effectively navigate these complex obligations, avoid costly penalties, and update your policies and procedures accordingly.