When expanding your business operations to California, do you know enough about the complex landscape of employment laws, regulations, and administrative tasks needed to safely meet compliance standards? In unfamiliar markets like this, a Professional Employer Organization (PEO) in California can be an invaluable partner because it acts on your behalf to remove compliance concerns. But what exactly is a PEO?
A PEO in California is a company that provides comprehensive HR solutions to businesses of all sizes to aid in global expansion. This specialist partner in California may offer HR administration, payroll processing, employee benefits management, and compliance assistance, alongside other services designed to boost global maneuverability.
By partnering with a PEO in California, companies can focus on core business functions in this exciting business landscape while offloading many of their HR-related requirements during the hiring process and beyond.
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The Top 3 Advantages of Partnering with a Californian PEO
Hire talent where it is, not just near the office – With a PEO, businesses of all sizes can tap into wider talent pools far beyond their physical locations. This is especially helpful in a state as diverse and expansive as California.
Streamlined HR processes – PEOs handle various HR functions on their partners’ behalf, from payroll and benefits administration to employee onboarding and compliance management. This expert support frees up valuable time and resources for businesses to better focus on expansion strategies.
Access to comprehensive benefits – California has some of the best employee benefits and labor laws in the US. Partnering with a PEO in California allows businesses to offer competitive benefits packages to attract and retain top talent while also staying on top of evolving employee protections.
Key Labor Laws to Remember in California
California has a reputation for employee-friendly labor laws in the US, with minimum protections and benefits often going above federal requirements. From minimum wage requirements and overtime pay to meal and rest breaks, employers in California must remember many state laws.
That’s why a PEO in California makes the employment process easier by providing constant access to local legal specialists as well as offering up-to-date expertise on labor requirements, including:
California Fair Employment and Housing Act (FEHA)
The California Fair Employment and Housing Act (FEHA) is designed to prohibit employment discrimination and harassment in the workplace.
This state law applies to employers with 5 or more employees, but FEHA protects characteristics including race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, disability, medical condition, genetic information, age, and military and veteran status.
Employers who are found to be breaking FEHA rules can expect penalties of up to $25,000 per violation.
California Family Rights Act (CFRA)
The California Family Rights Act (CFRA) provides more employees with job-protected leave than similar federal acts.
This act is also applicable to employers with 5+ employees, and to be eligible for CFRA leave, employees must have been employed by their employer for at least 12 months and have worked at least 1,250 hours in the previous 12 months.
CFRA allows eligible employees to take up to 12 weeks of unpaid leave within a 12-month period for the birth, adoption, or foster care of a child or to care for themselves or a family member in the event of a serious health condition.
California Paid Sick Leave Law
The California Paid Sick Leave Law requires employers to provide paid sick leave to their employees, regardless of the size of the business. Under this unique law, employees accrue at least an hour of paid sick leave for every 30 hours worked.
Sick leave earned in this way can be used by employees for their own illness, the illness of a family member, or for preventive care.
California Wage Orders
California Wage Orders (CWO) are specific regulations that govern wages, hours, and working conditions across various industries and occupations. 17 different wage orders can be found across the state, each made for specific sectors such as manufacturing, retail, and agriculture.
These wage orders cover key provisions, including unique minimum wage, overtime pay, meal and rest breaks, and reporting time pay, meaning employers must be sure to check for any CWOs that can affect their workers.
Minimum Wage Law
As of January 2024, the state minimum wage in California is set at $16.00 per hour for employers with 26 or more employees and $15.50 per hour for employers with 25 or fewer employees. Californian fast-food workers in 2024 must have a minimum wage of $20.00 per hour.
Additionally, some cities and counties in the state have higher minimum wage rates to address variations in local cost of living.
Overtime Pay
California’s overtime pay regulations stipulate that employees are entitled to 1.5 times their regular rate of pay for hours worked over 8 in a day or 40 in a week.
For hours worked over 12 in a day or 8+ on the seventh consecutive day of work in a workweek, employees are entitled to double their regular rate of pay. These overtime provisions are designed to compensate employees fairly for long hours and to discourage employers from overworking their staff.
Meal and Rest Breaks
Employees are entitled to a 30-minute unpaid meal break for every 5 hours worked. Additionally, if an employee works more than 10 hours, a second meal break is required.
Otherwise, employees are also entitled to a paid 10-minute rest break for every 4 hours worked or a major fraction thereof.
Why Choose Hiring in California Over Other States? 5 Big Reasons to Hire Talent Through a PEO in California
California’s Opportunities
The state is home to a highly diverse and skilled talent pool, with a large population that includes many cultural and educational backgrounds. This level of diversity fosters innovation and creativity, both essential for businesses aiming to remain competitive in a global market.
Additionally, California’s economy is one of the largest in the world, providing a dynamic business environment with strong sectors in technology, entertainment, agriculture, manufacturing, and tourism.
World-Class Education
The state’s prestigious educational institutions and research centers, such as Stanford, UC Berkeley, UCLA, and Caltech, produce a steady stream of highly educated graduates and cutting-edge research.
A deep and educated talent pool makes California an ideal location for businesses looking to hire the best and leverage advanced technologies. Furthermore, Silicon Valley, a globally renowned hub for innovation and technology, is located in California.
Quality of Life
California’s high quality of life also makes it an attractive location for businesses. The state’s landscapes, climate, and vibrant cultural scenes provide a living environment that can attract and retain top talent from around the world. From beautiful beaches and national parks to bustling cities and charming small towns, California offers a variety of living options to entice mobile workers.
A Globally Strategic Location
Businesses in California have access to a variety of the world’s biggest markets due to the state’s strategic location on the West Coast of the US. Major ports and airports in Los Angeles, San Francisco, and San Diego can facilitate global trade, making it the perfect location for businesses involved in international trade.
The state offers extensive support for global startups and entrepreneurs, including access to venture capital, incubators, and accelerators. This local support network can help new businesses grow and succeed wherever they’re from.
Forward-Thinking
California law’s leadership in environmental and clean energy initiatives attracts forward-thinking consumers and employees from around the world. The resulting concentration of industries and professional networks in California offers abundant opportunities for business collaborations and networking through industry conferences, trade shows, and professional associations.
Let INS Global Be Your Guide to Quick and Compliant Worldwide Expansion
Understanding the complexities of hiring and expanding into California requires a good mix of expertise and real local knowledge. That’s why INS Global specializes in helping businesses strategize and follow through with international expansion via an extensive network of local experts around the world.
For nearly 20 years, we’ve offered businesses of all sizes around the world easy access to new markets through our global Employer of Record (EOR) services and PEO in California. By becoming the legal employer of your workers, INS Global can manage key employment functions on your behalf in 160+ countries worldwide, and you can enter new markets without needing a new local entity.
From HR outsourcing to hiring and payroll services to compliance assistance and talent acquisition, we provide end-to-end solutions, helping businesses thrive in the Golden State and beyond.
Contact our expert global expansion advisors today for a free consultation and learn more.
FAQ
Q: What is the difference between a PEO and an Employer of Record (EOR)?
A: While both PEOs and EORs offer HR solutions, and the terms are often used interchangeably in most countries around the world, the main difference in the US lies in the employment relationship.
With a PEO in California, you retain control over the day-to-day operations of your employees while the PEO handles HR tasks.
With the more extensive support of an EOR in California, the EOR assumes all legal employer responsibilities on your behalf, including payroll, taxes, and compliance.
Q: Can a PEO in California help with compliance assurance?
A: Yes, partnering with a PEO in California well-versed in employment law can help you navigate complex regulations and ensure compliance with state and local requirements.
Q: How can INS Global help with hiring in California?
A: INS Global offers comprehensive HR solutions tailored to the needs of businesses looking to expand into California. From setting up legal entities and payroll processing to compliance management and talent acquisition, we provide end-to-end support to streamline the entire expansion process through our expert PEO in California.
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