USA – CALIFORNIA Law and Practice Contributed by: William C. Martucci, Laura M. Booth, Ashley N. Harrison and Carrie A. McAtee, Shook, Hardy & Bacon LLP
minimum wage requirements. Under California law, the minimum wage is currently USD16.50/hour for employers of all sizes (whereas the federal minimum wage is currently USD7.25/hour). Some cities, such as San Francisco, Berkeley, and Anaheim, impose a higher minimum wage on employers for each hour worked within each city. Some local wage ordinances are targeted to only certain employers or city con - tracts. Further, any bonus promised to employees is included in determining the employee’s “regular rate” of pay, including bonuses designed as incentives. Discretion - ary bonuses are not included. 1.5 Other Employment Terms In California, wages include accrued vacation pay, and vacation is viewed as a form of deferred compensa - tion. Employers are not required to provide vacation days to employees. However, if the employer does provide vacation days to its employees, when an employee has earned vacation time, it becomes a vested right of the employee, the employer cannot reclaim it, and the vacation time must be paid out to the employee upon the employee’s separation. (Cali - fornia Labor Code, Section 227.3.) The federal Family and Medical Leave Act (FMLA) provides job security to an employee who is absent from work either (i) because of the employee’s own serious health condition; (ii) to care for specified fam - ily members with serious health conditions; (iii) for the birth of a child and to care for a newborn child; or (iv) because of the adoption or foster care of a child by the employee. (29 USC, Section 2601, et seq.) The FMLA provides covered employees with 12 workweeks of leave for specified reasons in a leave year. FMLA leave is unpaid unless a form of available paid time off is taken by the employee. The California Family Rights Act (CFRA) covers more employers than the federal FMLA and provides broad - er protections. In addition, The California Pregnancy Disability Leave Law (PDLL) requires covered employ - ers to provide four months of leave per pregnancy. However, there are various types of paid leave avail - able under California law. The California Paid Family
Leave (PFL) provides for up to eight weeks of pay - ments from the State Disability Fund for wage loss of employees who take time off work to care for a seriously ill child, spouse, parent, grandparent, grand - child, sibling, or domestic partner, or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption. San Francisco requires non-governmental employers with 20+ employees, regardless of location, to supple - ment PFL benefits so that employees receive 100% of their wages, subject to a cap, for eight weeks of parental leave to bond with a new child (“San Fran - cisco Paid Parental Leave”). Through this programme, employers pay an additional 30–40% of the employ - ee’s wages (in addition to the approximate 60–70% of wages provided for under California’s PFL). California also requires employers to provide paid sick time which may be used by the employee for his or her own illness or to care for specified others who are ill. The statutory accrual rate for paid sick leave is one hour for every 30 hours worked. Employees may use paid sick leave beginning on their 90th day of employment. Thereafter, they may use sick leave as it accrues. Employers may limit an employee’s use of accrued paid sick leave to 40 hours or five days per year. Several cities also mandate additional paid sick leave requirements within their jurisdictions, including San Francisco, Oakland, Los Angeles, San Diego, and Long Beach. Regarding confidentiality, under California law, every - thing that an employee acquires by virtue of his or her employment (other than compensation for services) belongs to the employer “whether acquired lawfully or unlawfully, or during or after the expiration of the term of his employment.” (California Labor Code, Sec - tion 2860.) This protection clearly extends to trade secrets. A non-disclosure or confidentiality agreement between the employer and the employee may be help - ful but is not required. In a settlement agreement, the employee may seek a non-disparagement provision binding upon the employer’s officers, managing agents and particular supervisors. If so, the employer may insist that this provision be mutual. However, exceptions to a non- disparagement provision must be made for truthful
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