HR Compliance in California: What Employers Need to Know

California voids employment non-competes for most workers (Business & Professions Code §16600), and recent legislation added employer notice obligations and penalties around void agreements. NDA language broad enough to function as a de facto non-compete gets struck too. Restrictive covenants drafted for other states should never be sent to a California hire.

California's waiting-time penalty accrues a full day of wages for each day final pay is late, up to 30 days. Termination letters promising payment "on the next payroll cycle" document the violation. Accrued vacation is treated as earned wages and must be paid out.

A general release of unknown claims is effective in California only if it quotes Civil Code §1542 and expressly waives it. Severance agreements are also subject to notice requirements about the right to consult an attorney and minimum consideration periods under the state's Silenced No More Act (SB 331), which restricts confidentiality about harassment, discrimination, and retaliation.

Labor Code §2802 requires reimbursement of necessary business expenses — including a reasonable share of personal phone and home-internet costs for remote workers. Handbooks that are silent on reimbursement invite class claims.

California prescribes detailed harassment-policy content and requires supervisor and employee training at small employer sizes. A generic two-paragraph policy does not satisfy the regulation.

Labor Code §925 generally voids contract clauses requiring California-based employees to litigate outside the state or under another state's law. Drafting around California from your headquarters state usually fails.