Employer of Record · California

Employer of Record in California.
AB5-Compliant.

California has the most complex employment law in the United States. From AB5 worker classification to daily overtime rules, WorkGenius becomes your legal employer — keeping you fully compliant while you focus on your business.

$16.50/hr
State minimum wage
8-hour
Daily overtime threshold
Day 1
Final pay on termination

California by the Numbers

State minimum wage
$16.50/hr
Higher in LA ($17.28), SF ($18.67), and other cities
Daily overtime
After 8 hrs/day
Plus double-time after 12 hrs — unlike federal 40-hr rule
Paid sick leave
5 days/year
Minimum; many cities require more
Final paycheck
Same day
Must be paid immediately on termination
Non-compete agreements
Unenforceable
California bans non-competes for nearly all workers
CFRA leave
12 weeks
Applies to employers with just 5+ employees (vs. federal 50+)
The Defining Law

AB5: California's Worker Classification Law

Assembly Bill 5 (AB5), effective January 2020, dramatically changed how California determines whether a worker is an employee or an independent contractor. It codified the "ABC test" — and getting it wrong can cost you more than the workers' wages in penalties.

Get AB5-Compliant Today
The ABC Test
  • The worker must be free from control and direction by the company (A)
  • The work must be outside the company's usual course of business (B)
  • The worker must be in an independently established trade or business (C)
  • Failing any one part of the ABC test means the worker must be classified as an employee
  • Misclassification penalties include back taxes, benefits, and fines — often $5,000–$25,000 per worker
  • WorkGenius assesses every worker against the ABC test before engagement begins
California Coverage

What WorkGenius Handles for California

California-specific employment law is a full-time job. We take it off your plate entirely.

AB5 Classification

AI-powered assessment against California's ABC test before every engagement. Misclassification risk eliminated from day one.

California Payroll

Daily overtime calculations, city-specific minimum wages, meal and rest break compliance, and accurate SDI withholding.

Pay Transparency (SB 1162)

All job postings include compliant salary ranges. Pay scale disclosures handled for offers and existing employees.

Benefits & Leave

CFRA leave, California SDI, Paid Family Leave, and ACA-compliant health coverage — all enrolled and administered.

California-Compliant Contracts

Employment agreements reflecting CA law: no non-competes, IP assignment clauses, offer letter requirements, and proper at-will language.

Termination & Final Pay

Immediate final paycheck on termination day, COBRA administration, and compliant separation documentation per California Labor Code.

California Compliance Dashboard
3 workers · All compliant
Live
AB5 Classification Check
Passed
Free from company control (A)
Outside core business scope (B)
Independent trade established (C)
This Week's Payroll
$16.50
Base/hr
$24.75
OT rate (1.5×)
Auto
Calculated
Weekly invoice sent
Every Friday · All-in rate
Sent
Technology-Powered

How WorkGenius Handles California EOR

Most EOR providers use manual checklists. WorkGenius runs California's complex employment rules directly in the platform — automatically, on every payroll cycle.

  • AI-Powered AB5 Assessment
    Every worker is assessed against California's ABC test before engagement begins. No manual guesswork — misclassification risk eliminated from day one.
  • California Payroll, Automatically
    Daily overtime after 8 hours, double-time after 12, city-specific minimum wages — all calculated correctly on every pay run without you lifting a finger.
  • Real-Time Compliance Monitoring
    California law changes frequently. Our platform auto-updates — so you're always compliant without needing to track legislative changes yourself.
  • One Weekly Invoice
    A single, transparent weekly invoice covering payroll, taxes, benefits, and compliance. No surprises, no hidden fees.

Other Key California Compliance Areas

Beyond AB5, California layers multiple additional employment requirements on top of federal law.

Pay Transparency (SB 1162)

Since Jan 2023

Since 2023, California employers with 15+ employees must include pay ranges in all job postings and provide salary ranges to employees on request.

CFRA & Expanded Leave

5+ employees

The California Family Rights Act applies to companies with just 5 employees — compared to the federal FMLA threshold of 50. Employees get 12 weeks of job-protected leave for qualifying reasons.

SDI & Paid Family Leave

No wage ceiling

California State Disability Insurance (SDI) and Paid Family Leave (PFL) are mandatory wage contributions. As of 2024, there's no wage ceiling — all wages are subject to SDI withholding.

California WARN Act

75+ employees

California's WARN Act is stricter than federal — it applies to employers with 75+ employees (vs. 100 federal) and requires 60 days notice for mass layoffs or plant closures.

Simple Process

How It Works in California

From first conversation to fully compliant employment — typically within days.

1

Tell Us What You Need

Workers, roles, locations, and start dates. We tailor the setup to your needs.

2

We Assess & Classify

Our AI runs every worker through California's ABC test. We prepare compliant contracts and payroll setup.

3

Workers Are Employed

Onboarded with California-compliant contracts, benefits enrolled, payroll running from day one.

4

We Handle Ongoing

Payroll runs with daily OT. Taxes filed. Compliance monitored. One weekly invoice.

California EOR: Common Questions

Does AB5 apply to my business if we're based outside California?

Yes. If the worker performs services in California — even remotely — California's AB5 applies regardless of where your company is headquartered. This catches many out-of-state companies off guard. WorkGenius handles AB5 compliance for all California-based workers, wherever your company is located.

What happens if one of my contractors fails the AB5 ABC test?

If a worker fails California's ABC test, they must be classified as a W-2 employee. That means you're responsible for back payroll taxes, workers' compensation, and potentially missed benefits — retroactively. WorkGenius assesses every worker before engagement begins and, if reclassification is needed, manages the transition compliantly.

How is California overtime different from federal overtime?

Federal overtime kicks in after 40 hours per week. California requires overtime pay (1.5×) after just 8 hours in a single day, and double time (2×) after 12 hours in a day or for the 7th consecutive day in a workweek. This catches many employers off guard when managing hourly or project-based workers. WorkGenius calculates California overtime automatically on every payroll run.

Do I really have to pay a terminated employee on their last day?

Yes — California Labor Code Section 201 requires employers to pay all wages owed to an involuntarily terminated employee immediately upon termination. Failure to do so triggers waiting time penalties of one day's pay for each day the payment is late, up to 30 days. WorkGenius handles same-day final pay processing.

Can I have my California employees sign a non-compete agreement?

No. Non-compete agreements are unenforceable in California under Business & Professions Code Section 16600 — even if the contract is governed by another state's law. This applies to non-solicitation clauses for customers in many cases too. WorkGenius drafts California-compliant employment agreements that protect your legitimate business interests without relying on non-competes.

What's the CFRA and how does it affect small businesses?

The California Family Rights Act (CFRA) provides 12 weeks of job-protected leave for qualifying reasons including the birth of a child, a serious health condition, or to care for a family member. Unlike federal FMLA which only applies to employers with 50+ employees, CFRA applies to any employer with 5 or more employees. WorkGenius manages CFRA leave tracking, documentation, and return-to-work processes.

Employer of Record

Ready to Employ in California Compliantly?

WorkGenius handles AB5 classification, California payroll, benefits, and every other compliance requirement so you don't have to. Get started today.

No commitment required. Free consultation included.