California is the most populous state in the United States.
Payroll and Benefits Guide - United States - California
Fun Facts
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.
Contributions
Employee Payroll Tax
| Contribution Type | Rate |
| State Disability Insurance | 1.20% |
| FICA Social Security (federal) | 6.20% |
| FICA Medicare (federal) | 1.45% |
| Additional tax on earnings over 200,000 USD | 0.90% |
| CalSavers (If not already in retirement plan) | 5.00% |
Employer Payroll Tax
| Contribution Type | Rate |
| 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.
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%).