Employment Laws Originate in California

By Lisa Cieslica
Senior Human Resources Manager, National PEO

For those who have spent any time working in the Human Resources profession, it is well known that California is famous for setting precedent when it comes to the enactment of employment law.  We have learned that what starts in California, eventually makes its way East.  So we watch, listen and learn.  As a business leader, it is also important to be aware of what occurs in the West, especially for those who may be considering establishing a business there. 

There are five major differences between California and Arizona employment laws.  Above and beyond, California tends to be considerably more employee friendly in the employment law arena as compared to other states.  For instance;

Daily overtime

In Arizona, we know that non-exempt employees are entitled to overtime pay at one and one half times the hourly rate when weekly hours exceed 40; a provision under the Fair Labor Standards Act.  In California, non-exempt employees are entitled to overtime pay of one and one half hours after exceeding eight working hours in a day.  Additionally, employees are entitled to overtime pay at two times the hourly rate when daily working hours exceed 12.

Vacation Pay

California law considers vacation pay to be earned wages and therefore, employer must pay out all earned vacation pay.  Consequently, California law prohibits the ‘use it or lose it’ policy of vacation usage.

Non-Compete Agreements

In California, contracts and/or agreements that prohibit employment with a competitor after employee terminates is generally not enforceable.  The contracts tend to interfere with an individual’s ability to achieve gainful employment, which is restricted.  Contracts can, however, limit the disclosure of proprietary information.

Sexual orientation and gender identity discrimination

As described in Title VII of the Civil Rights Act of 1964, which identifies race or color, religion, sex and national origin as the classes which are considered to be protected against discrimination.  Other Federal statutes protect certain individuals against discrimination based on disability, age, veteran status and so on.  California has expanded upon the Federal law to include one’s sexual orientation and gender identity (one’s perception of own sex).

Termination Pay

When an employer terminates an employee, all unpaid wages must be paid out immediately, and when an employee terminates their employment, all unpaid wages must be paid out within 72 hours, unless a signed contract of employment stipulates otherwise.

What does this mean for Arizona?  It simply may be that we need only be aware and be prepared for the future.  And although it’s true that we don’t definitively know when the changes will occur, or if they definitely will change for certain, it’s best to be prepared and anticipate what may be.

If you have questions or would like more information about the topics discussed in this article, please contact our HR Department by clicking here. Please be sure to reference the title of the article in your inquiry.

This article was sponsored by National PEO, LLC. National PEO is a leading provider of PEO services to hundreds of companies all over the US. Let us handle the burden of Payroll Services, Benefits Administration, Worker's Comp, and Human Resources for your company. Contact us today to request a quote!

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