Make employment in California easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in California, all in one easy-to-use platform.
Spread along 840 miles of stunning Pacific coastline, California offers a diverse landscape of sprawling urban centers, sun-soaked beaches, and towering redwood forests.
But it's not just the breathtaking scenery that sets the Golden State apart. From the glitz and glamor of Hollywood to the tech revolution of Silicon Valley, California has always been synonymous with innovation and progress. With a rich cultural heritage that celebrates diversity and creativity, this vibrant state is the definition of opportunity — making it a hugely desirable destination for top talent and companies alike.
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In California, workers’ rights are protected by numerous employment and labour laws, at both the state and federal level. As a result, employees enjoy protection from discrimination based on age, religion, sexual orientation, gender, and race.
Here are the key things you need to know about hiring in California.
The regulations and edicts around working hours and overtime are primarily covered by the California Labour Code.
Full-time employment is generally considered to be 40 hours per week.
Non-exempt employees are entitled to overtime pay of:
1.5x their regular pay rate if they work more than eight hours (but less than 12) in a workday
Double their regular pay rate if they work more than 12 hours in a workday
Under the federal Fair Labour Standards Act, employees are generally (but not always) exempt from overtime if they:
Earn more than the state or federal exemption threshold
Perform a role with duties that are
Work in a certified or licensed profession, such as law, accounting, architecture, or engineering
In California, the monthly salary threshold for exemption is currently $5,373.33.
Note that the federal salary threshold for exemption is currently being reviewed in the US.
The minimum state wage is $16 per hour. However, cities are entitled to set their own minimum rates. In some of California’s biggest urban centers, for instance, the 2023 minimum hourly rates are as follows:
Los Angeles: $16.78
Pasadena: $16.93
San Diego: $16.30
San Francisco: $18.07
San Jose: $17
Note that, for “small” employers (i.e. businesses with 25 or fewer employees), minimum rates can be lower.
We can help you get your new employee started in California fast. Note that our minimum onboarding time (MOT) is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Remote platform.
For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.
Please note that payroll cut-off dates can impact the actual first day of employment. Remote’s payroll cut-off date is the 10th of the month, unless otherwise specified.
Under state law, employees must be paid at least once per month (employees in some occupations must be paid more frequently). Private sector salaries are usually paid twice per month.
For Remote customers, employee payments are made twice per month in equal installments, payable in arrears. The first payment is made on the 15th of the month and the second payment is made on the final day of the month. If relevant, bonus payments, commissions, and expense reimbursements are included in the second payment of the cycle.
Remote can help you craft a competitive benefits package to attract and retain the best global talent. Our benefits experts understand the trends, requirements, and expectations of the California labour market, allowing your employees to feel appreciated and thrive.
Our benefits packages in California usually include some or all of the following:
Under the Affordable Care Act, organisations with a headcount of 50 or more must offer statutory health insurance to their full-time employees.
Most employers also offer some level of supplemental health insurance. While this can lead to a relative rise in employment costs, it’s an essential benefit that ensures your people have access to routine care and are covered in the event of an emergency.
Because Remote is the employer of record (EOR), it’s important for us to offer the same core benefits to all employees to ensure fair and non-discriminatory hiring practices. This protects both your business and ours.
Note that we do not add a markup on any benefits premiums or administration costs.
Organisations with fewer than 50 employees are not required to offer health insurance to their part-time employees. However, if you offer health coverage to one part-time employee, you must offer group coverage to all your part-time team members.
Yes. Organisations must offer a retirement plan to their employees. You can either choose your own qualified savings plan, or enrol your employees into the state-sponsored CalSavers Program.
Note that this only applies if your business:
Failure to enrol can result in a fine of $250 per employee after the first 90 days, and $500 per employee after 180 days.
California, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in California may lead to fines and penalties for the offending company.
Employment taxes and statutory fees affect both your payroll and your employees' paychecks in California. Note that your employees may be liable for additional local taxes.
Employer taxes
0%
Federal unemployment insurance tax (FUTA) (charged on the first $7,000 an employee earns per year)
0.0% to 6.2%
State unemployment insurance tax (SUTA)
0.0%
Employment training tax (ETT)
0.0%
FICA (Social security)
0.00%
FICA (Medicare)
Employee taxes
0.0%
State disability insurance (SDI)
0% to 37%
Federal income tax
0% to 12.3%
State income tax
0.0%
FICA (Social security)
0.00%
FICA (Medicare)
In California, there is no state or federal law that requires employers to provide paid or unpaid vacation leave to their employees, although many organisations do.
Under the state’s Healthy Workplaces, Healthy Families Act, eligible employees accrue at least one hour of paid sick leave for every 30 hours worked. Employers can either provide a lump sum of sick leave at the beginning of each year, or allow employees to accrue it over time. Can an employer deny sick time in California? Under the federal Family and Medical Leave Act (FMLA), eligible employees are entitled to up to 12 weeks of unpaid sick leave per year, provided they: Have worked for the same employer for at least 12 months Work in a location where at least 50 people are employed by the company within a 75-mile radius Do part-time employees get sick pay in California? Yes. Under state law, part-time employees are entitled to sick pay.
Under state law, employees are eligible for up to eight weeks of paid family leave in a 12-month period. This can be used for bonding with a new child (within one year of their birth or placement (in the case of adoption or foster care)), or for caring for a family member with a serious health condition. Under the FMLA, employees are also entitled to up to 12 weeks of unpaid maternity or paternity leave. Maternity leave The state’s Pregnancy Disability Leave (PDL) law requires employers to provide up to four months of unpaid job-protected leave for employees who are disabled due to pregnancy, childbirth, or a related medical condition. The leave may be taken before or after the birth of the child.
Companies with five or more employees must provide up to five days of unpaid bereavement leave.
Employees must report for jury duty if summoned (unless exempt). Jurors are typically “on call” for two weeks. Do employers have to pay for jury duty in California? No. Private sector employers are not required to pay employees on jury service, but they must provide unpaid leave, and cannot penalize or terminate an employee on jury duty. Some employers provide paid leave.
Under federal law, employers must grant leave to employees who are members of the military or the National Guard for military duty or training. These employees have the right to take time off for their military obligations, and employers are prohibited from discriminating against them based on their military service.
Like nearly all US states, California is an “at-will” state. This means both employers and employees can end the employment relationship without reason, provided it is legal.
Remote’s legal experts can help you navigate terminations to ensure employees are only let go fairly, negating any potential legal complications.
Employees are protected from wrongful termination by several laws, including the Fair Employment and Housing Act (FEHA) and the California Labour Code.
Employers and employees are not required to provide notice of termination, unless otherwise stated in the employment contract.
Despite this, it's usually customary for employees to provide two weeks' notice when leaving an organisation.
Employers are not legally required to provide severance pay (unless it is stipulated in the employee's contract or in the company policy).
However, upon termination, employers must pay any accrued but unused vacation time, in addition to any due wages.
There is no requirement to provide a probation period for employees, although many companies implement internal probation policies. These policies typically involve a formal performance evaluation after a specified period, such as three or six months.
California has one of the largest and most complex economies in the United States, driven by industries such as technology, entertainment, agriculture, and healthcare. With some of the most stringent labour laws in the country, employers in California must navigate unique payroll regulations, including high minimum wages, strict overtime laws, and extensive employee rights. Understanding these rules is crucial for maintaining compliance and avoiding costly penalties.
Employers in California must comply with both federal and state payroll regulations when processing employee wages, taxes, and benefits. Below is an overview of the key payroll components:
Minimum Wage: As of 2024, California’s minimum wage is $16.00 per hour for all employers. Some cities and counties have even higher minimum wages.
Overtime Rules:
California has a progressive income tax system with rates ranging from 1% to 13.3%, one of the highest in the nation.
Employers are responsible for withholding California state income tax from employee wages and remitting it to the California Franchise Tax Board (FTB).
Employers must contribute to California’s Unemployment Insurance (UI) program, managed by the Employment Development Department (EDD).
The wage base for UI tax in California is $7,000.
UI tax rates range from 1.5% to 6.2%, depending on the employer's experience rating.
Employees in California must contribute to the State Disability Insurance (SDI) program, which provides short-term disability and paid family leave benefits.
The SDI withholding rate for 2024 is 1.1% on wages up to $153,164.
California law requires all employers to carryworkers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
Employers must register for a California Employer Payroll Tax Account Number with the EDD.
State payroll tax returns are filed quarterly.
UI tax reports must be submitted quarterly to the California EDD.
Payroll tax payments can be made electronically through EDD’s e-Services for Business.
Local Minimum Wage Variations: Many cities, such as San Francisco and Los Angeles, have higher minimum wage rates than the state’s minimum wage.
Final Paycheck Rules: Employers must provide the final paycheck immediately if an employee is terminated and by the next payday if the employee resigns with notice.
New Hire Reporting: Employers must report new hires to the California New Employee Registry within 20 days of hire.
Meal and Rest Break Requirements:
Independent Contractor Classification: California’s AB 5 law imposes strict guidelines for classifying independent contractors, requiring most workers to be classified as employees unless they meet the ABC Test.
Payroll Recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
Paid Sick Leave: California requires employers to provide at least 24 hours (or 3 days) of paid sick leave per year.
Managing payroll in California requires careful attention to state-specific regulations, including minimum wage laws, overtime rules, and payroll tax requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.
For businesses looking to simplify payroll management, Remote’s payroll solutions provide automated payroll processing, tax filing, and compliance support tailored to California’s regulations. With Remote, employers can focus on business growth while ensuring accurate and hassle-free payroll operations.
To see just how easy global payroll can be, book a demo today.
Hiring contractors in California can be a strategic and cost-effective way for businesses to complete projects without the obligations of hiring full-time employees. Whether you are engaging independent contractors for specialized services or bringing in subcontractors for short-term work, understanding California’s labour laws and federal regulations is essential.
Remote helps businesses stay compliant when hiring contractors globally with these key features:
Global compliance support : Ensures adherence to labour laws in 200+ countries with localized contracts and proper documentation.
Misclassification protection : Includes built-in compliance checks and seamless contractor-to-employee conversion.
Centralized documentation : Maintains essential records for audits and automates tax filings (e.g., 1099s for U.S. contractors).
Legal expertise : Provides guidance on complex local labour laws, simplifying international hiring.
Remote’s streamlined approach minimizes compliance risks and simplifies contractor management for businesses.
Remote simplifies contractor payments with:
Automated processing : One-click approvals, bulk payments, recurring invoices, and real-time tracking.
Global coverage : Payments in 200+ countries, multiple payment methods, and currency flexibility.
Cost and compliance : Fair price guarantee (pay only for active contractors), built-in compliance with regional regulations, and localized contracts.
Learn more about how Remote simplifies contractor management in California —get started for free today.
Our employer of record (EOR) service enables you to hire, manage, and pay top talent in California with speed and simplicity.
Remote’s EOR allows your company to legally hire employees in any country or US state — including California — wherever your business is based, without having to set up a local legal entity.
On paper, Remote is the official employer, and we handle compliance, payroll, benefits (including equity), and other HR processes — but you maintain full control over the hire’s day-to-day management and work responsibilities. Learn more.
An EOR may be ideal if your company:
Needs to hire employees in California but doesn’t want to establish a legal entity there
Is testing local markets before committing to a full business expansion
Wants to ensure full compliance with federal, state, and local employment laws and tax requirements
Needs a fast, cost-effective way to onboard employees in the state
Needs a temporary hiring solution before establishing a legal entity
If your company wants to hire talent in California but doesn't have a legal entity there, our EOR provides a fully compliant and efficient solution. Whether you’re hiring from outside the US, or from a different US state, there are strict employment and payroll processes that you must adhere to. Our EOR service ensures you meet these legal obligations while enabling you to grow quickly.
Key benefits of hiring through our EOR in California include:
Faster market entry . You can hire talent quickly, without having to wait months to establish a local entity.
Full compliance with local employment laws . Avoid the legal risks associated with non-compliance and misclassification.
Simplified payroll management . We automate payroll tax calculations and ensure you are fully compliant with all federal, state, and local withholding obligations, even when laws change.
Lower costs. Setting up a legal entity in California can be costly and time-consuming. An EOR eliminates the need for entity registration, reducing overhead expenses.
Fewer resources required. With HR, payroll, and compliance managed by the EOR, your company can concentrate on scaling operations and assigning your resources elsewhere.
It’s also crucial to note that, at Remote, we own all our own legal entities. As a result, we don’t need to rely on third parties, which can incur delays and extra costs, and result in a negative employee experience. All our EOR services — including the dedicated support of our local specialists — are provided in-house.
To learn more — and to see our EOR platform in action — book a demo with one of our friendly experts today.
California is a powerhouse for innovation and talent, with thriving industries in tech, entertainment, and green energy — and access to one of the largest labour markets in the US. Whether you’re a startup expanding along the west coast or an SMB ready to build a distributed team, managing HR, payroll, and compliance across state lines can quickly become overwhelming. That’s where a professional employer organisation (PEO) can help.
A professional employer organisation (PEO) is a third-party provider that helps businesses handle key HR functions. These typically include payroll, benefits administration, tax filings, and employment law compliance. With a PEO, your business enters into a co-employment relationship, meaning the PEO takes on the administrative and legal tasks related to employment — while you retain full control over day-to-day management of your team.
For small to midsize companies, a PEO can provide enterprise-grade HR services without the cost or complexity of building an in-house department.
As mentioned, a PEO operates through a co-employment model, which requires your company to be registered and operating in California.
In contrast, an employer of record (EOR) acts as the legal employer on your behalf. EORs are typically used for hiring in states (or countries) where your business doesn’t yet have a legal presence. If you’re hiring your first employee in California and don’t yet have an entity or tax setup, an EOR may be a better fit initially.
Working with a PEO in California offers several advantages, such as:
Compliance with state employment laws and tax regulations
Access to affordable, competitive employee benefits packages
Reduced administrative burden around payroll and HR documentation
Simplified onboarding, performance tracking, and employee offboarding
Minimized risk around misclassification, workplace policies, and employee relations
California employers must also navigate unique state laws, including workers’ compensation requirements and specific tax obligations. Remote’s PEO helps you stay compliant while keeping your HR operations lean and efficient.
To partner with a PEO in California, your business must have a registered legal entity in the state. Once that’s in place, our PEO service takes on your HR administration tasks such as running payroll, administering benefits, and filing local and federal taxes.
Remote’s PEO services integrate seamlessly into your operations, whether you're hiring your fifth employee or your 50th. You maintain full control over how your team works while we handle the operational complexities behind the scenes.
If your company is legally established in California and you're looking for a scalable way to manage HR, a PEO is an ideal solution. You’ll gain access to expert support, reduce your compliance risk, and free up time to focus on growth.
If you're just entering California and don’t yet have a legal entity, consider starting with an EOR and transitioning to a PEO as you scale.
Remote makes it easy to manage HR, payroll, and compliance across all 50 states. Learn more about our PEO services and how we can support your team’s growth in California.
€27
Per employee/month
Robust, transparent international payroll
User-friendly self-service platform
Dedicated specialists offering personalised support
Ensure compliance with local payroll regulations in each country
Centralised benefits management
HR Core included as standard
€27
Per contractor/month
Only be billed for contractors you actively work with
Work with contractors based overseas
Draft, edit and sign customised, localised contracts
Authorise contractor invoices with a single click or auto-pay
Payments made transparent with complete visibility
HR Core included as standard
€645
Per employee/month
Hire people across 90+ countries without setting up a local entity
Onboarding handled by a dedicated specialist
Local payroll paid punctually, every time
Built-in compliance protections
Localised benefits that are competitive and flexible
Dedicated in-house experts providing local support
HR Essentials included as standard