Payroll and Benefits Guide - United States - California

United States - California
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Currency

United States Dollar
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Capital

Sacramento
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Employer Taxes

13.15% – 23.25%

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Date Format

mm/dd/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

California is the most populous state in the United States.

It is known as the “Golden State” due to the California Gold Rush of the mid-19th century.

California is home to the tallest tree in the world, the General Sherman Tree in Sequoia National Park.

The iconic Golden Gate Bridge in San Francisco is one of the most famous landmarks in the state.

The state’s official animal is the California grizzly bear, though they are now extinct in the region.

The Silicon Valley region in Northern California is a global center for technology and innovation.

United-States-California

Contributions

Employee Payroll Tax

Contribution TypeRate
State Disability Insurance1.20%
FICA Social Security (federal)6.20%
FICA Medicare (federal)1.45%
Additional tax on earnings over 200,000 USD0.90%
CalSavers (If not already in retirement plan)5.00%

Employer Payroll Tax

Contribution TypeRate
Unemployment Insurance (state)1.50% – 6.20%
Unemployment- New Employer (State)3.40%
FICA Social Security (federal)6.20%
FICA Medicare (federal)1.45%
FUTA (Federal Unemployment Tax Act)0.60% – 6.00%

Payroll

Payroll Cycle

The payroll cycles are Bi-Monthly.

13th Salary

There are no provisions in the law regarding 13th salaries.

Work Hours and Week

In California, the workweek is a maximum of 40 hours per week or 8 hours per day.

Overtime

In California, the Fair Labor Standards Act (FLSA) applies, and overtime pay is given for work exceeding 40 hours per week at 150% of the regular pay. Working on weekends or rest days doesn’t require additional payment unless it’s under exceptional circumstances, in which case overtime is paid at the same rate.
United-States-California

Leave

Paid Time Off

California does not have any state statute governing the amount and payment of vacation time; however, it is common for employers to decide whether to offer paid or unpaid vacation leave.

Public Holidays

There are 12 official holidays

Sick Days

It is common for an employer to follow the Family and Medical Leave Act (FMLA) which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).

Employees are eligible for FMLA if they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.

In addition to the FMLA, California state law grants employees 3 sick days per year, accrued at 1 hour for every 30 hours worked. Employees can carry these three days over to the following year, but this can only happen once, and the maximum sick leave is 6 days.

Maternity Leave

Maternity leave falls under the FMLA, California Family Rights Act, Paid Family Leave Act (see Sick Leave).

Paternity Leave

Paternity leave falls under the FMLA (see Sick Leave).

Parental Leave

Parental leave falls under the FMLA (see Sick Leave)

Termination

Termination Process

Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal notice period to terminate an individual employment relationship, and employment is stipulated “at will.”

Notice Period

California follows an “at-will” employment policy, allowing termination without notice. There is no legal requirement for payout of unused vacation days, but employers usually compensate if given advance notice. Two weeks’ notice is commonly expected. The WARN Act mandates 60 days’ notice for mass dismissals.

Severance Pay

Except as otherwise provided in an employment contract or collective bargaining agreement, employers are not required to pay severance. Many employers choose to offer severance pay based on the employee’s length of employment.

Probation Period

Probation Period

No legal provision governs a formal “trial/probation period.” However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.

Immigration

Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States.

To hire a foreign national in the United States, an employer can file a petition with the Department of Homeland Security/USCIS for an employment visa. If approved, the prospective employee needs to obtain a “visa stamp” from a U.S. embassy or consulate (except for Canadian citizens). To acquire a temporary U.S. work visa, the employer must file a petition with USCIS.

For Work Permits

H-1B

H-1B1

H-2A

H-2B

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VAT

California has a minimum combined sales tax rate of 7.25% (state tax is 6.00% and local tax is between 1.25% – 4.75%).