Learning how to hire an employee in California first requires you to understand the nuances of its local labor laws. California new hire requirements often provide more protections for candidates and employees than federal laws—and you must follow these to the tee to ensure full compliance.
When hiring an employee in the state, you must remember to:
- Register in the state, even when hiring remote employees
- Disclose the salary range offered for the position during the interview
- Avoid questions unrelated to the job post, as dictated under California’s Fair Employment and Housing Act
- Follow proper background check procedures, including when rejecting an application due to the findings
Need help finding an employee in California? Consider a job board like ZipRecruiter. You can use its free templates to create a job ad in minutes and post it free for a limited time. Sign up today.
For greater detail on general hiring procedures, consult our article on how to hire employees.
Step 1: Create a Job Description
When writing your job description, consider what the job looks like, the duties you need the employee to perform, and what qualifications would make someone successful for that role. Remember that it will be the basis of your job ad, so make it as detailed as possible. Include the:
- Job title
- Type of employee (full time, part time, temporary, seasonal)
- Job location, if applicable
- Exempt status
- Wage range
Check out our guide on how to create a well-written job description to find out more.
Some jobs, such as for lawyers, doctors, and accountants, require specific educational requirements—but for those that don’t, consider waiving the requirements and focus on skills-based hiring instead. In doing so, you increase your qualified applicant pool and, with the help of pre-employment assessments, ensure that the person you hire can do the job.
Step 2: Advertise & Recruit
Your job ad will include the job description you created, but it should also market your company—what makes you special and why someone would want to work for you—as this helps attract qualified candidates. Before you post your job ad to a job board, add some information about your company’s culture and benefits as part of your employer branding.
It’s recommended to include the benefits provided for the role when creating the job post. Take note that California has some regulations for paid sick leave and workers’ compensation—so make sure that you provide these as well.
When you’re ready to post your job ad, consider ZipRecruiter. Not only will this increase your job’s visibility by posting to multiple job boards at once, but it also offers you templates to help you create an attractive job ad. Learn more about it in our roundup of the best job posting sites for more recommendations.
Ban the Box Regulation in California
Ban the box laws prohibit employers from asking about a candidate’s criminal history on a job application—and California has one of its own. Under the state’s Fair Chance Act, employers with five or more employees cannot ask about an applicant’s conviction history before making a job offer. However, you may conduct a background check after providing the job offer—more on that later.
Employers are also not permitted to ask about criminal history that did not end in a conviction. These would be events like an arrest not resulting in a conviction, juvenile records, or convictions that have been sealed, expunged, or dismissed.
As with most laws, there are exceptions. The ban the box law does not apply to the following positions:
- A job with a criminal justice agency or law enforcement agency
- A job as a Farm Labor Contractor
- Any position where an employer is required by any state, federal, or local law to run a criminal background check for employment purposes or to restrict employment based on criminal history
Compliance Tip: California also prohibits employers from asking candidates about their prior salary. To learn more about restrictions like these, check out our guide on salary history bans.
Salary Range Disclosure Requirement in California
Effective Jan. 1, 2023, California’s pay transparency law requires employers to take several steps, including posting a pay scale or wage range in all job postings. This law applies to all California employers with at least 15 employees. Smaller employers must provide a pay range to any applicant who requests one. Employers who use a recruiting or staffing agency must still comply with this law.
Some sly employers have tried to get around this law by posting outrageous pay ranges, like a receptionist with an hourly range of $18 to $50. That’s not allowed under the law. The law says the pay scale must be one which the employer reasonably expects to pay for the position.
It’s important to note that this law applies to existing employees, too. Employers must provide all employees with a pay band for their position upon request.
Remote Tip: Even if your business is not located in California, but you advertise a job or hire remote workers in California, you must comply with this law.
Step 3: Evaluate Resumes
When you post your job ad, expect to receive applications quickly. Entry-level positions are likely to have an influx of applicants the same day you post the job, whereas higher-level positions might take longer, and you may see fewer candidates. Reviewing these applications will take time, but it’s crucial to ensure you hire the right employee.
For more help on how to do it properly and efficiently, check out our guide on resume screening.
Step 4: Interview Candidates
When you have shortlisted the candidates, call them to schedule interviews. By calling them, not only can you gauge their interest in the position and ask a few screening questions, but you can also assess if they fit in your company culture.
Once you’ve scheduled the interviews, set aside time to prepare. You’ll need to create relevant questions to help you determine the best candidate. For more information on how to approach this process, then check out our guide on how to interview an applicant.
Interview Limitations in California
Asking interview questions in a structured way helps you evaluate candidates fairly. It also helps you comply with California’s Fair Employment and Housing Act (FEHA), which prohibits questions of a candidate which are not directly related to the job. Prohibited topics include:
- Race
- Religion
- Color
- National origin
- Ancestry
- Physical or mental disability
- Medical condition
- Marital status
- Age
- Sex
- Sexual orientation
- Gender identity
- Military or veteran status
- Workers’ compensation history
- Criminal history (other than felony convictions)
- Salary history, including compensation and benefits
The California Department of Fair Employment and Housing (DFEH) cautions employers about asking questions related to any of the above topics, as well as about a candidate’s residence location, and credit and background checks. Note that California law does not explicitly prohibit these additional topics and pre-employment screening—but be aware that if used for a discriminatory purpose, you face fines and lawsuits.
Step 5: Call References
After you have interviewed your top candidates, you’ll likely have one or two who stand out. To help you assess even further who is worth hiring, ask for references. Get at least three supervisory references for each candidate.
You’ll have limited time when speaking with each reference, so make sure you’re prepared with targeted questions to get a better understanding of the employee’s abilities. Check our guide to employee reference checks to find out what questions to ask.
Reference Call Regulations in California
While every company has different policies, California law allows prior employers to speak freely about their past employees. Previous employers cannot make anything up or pass on rumors, but they can provide negative information about a candidate so long as it’s true. California has a reference immunity law providing legal protections to a prior employer who gives truthful communications as a reference.
If a reference refuses to speak with you or to answer questions, ask them to at least verify the following data:
- Dates of employment
- Job title
- Supervisor’s name
Step 6: Craft a Job Offer
When you’ve decided which candidate to hire, call them and discuss any final details, like the start date and salary. Once you and the candidate have agreed to all the terms, write a formal offer letter. Check out our offer letter templates to find out what needs to be included in the document.
Send the offer letter to the candidate and give them several days to review, sign, and send it back. Once you’ve received the signed offer letter back, it’s time to begin the onboarding process.
Once you’ve onboarded an applicant, you’ll want to make sure your payroll process is ironed out—and there are some complexities with California’s payroll compliance to note. To ensure it goes smoothly, check out our guide on how to do payroll in California.
Step 7: Run a Background Check (Optional)
The California Fair Chance Act prohibits employers from asking job applicants whether they have a criminal history. Once you have made a job offer, however, you can run a background check. You can make your job offer conditional on a successful background check as well, but make sure to include it in the job offer letter.
A background check can only be used to withdraw a job offer if the negative results are related to the job duties. For example, if you’re hiring a truck driver with three DUI convictions in the last five years, you can safely withdraw your job offer. If you hire a payroll specialist with the same background check results, you cannot withdraw the offer based on the background check.
Compliance Note: If you withdraw a job offer because of negative background check results, you must explain in writing to the candidate why you’re rescinding the offer, provide them with a copy of the background check results, and give the candidate at least five days to respond.
When evaluating background check results, you cannot consider any of the following information when deciding whether to move forward with the candidate:
- Arrests without a conviction
- Participation in diversion programs
- Dismissed convictions
- Sealed convictions
- Juvenile court history
Hiring Remote Employees in California
If your business is located outside California, but you’re hiring a remote employee in California, you must register as a business and employer. You can register online with the California Employment Development Department. This gives you an employer account number, which is necessary for unemployment and tax withholdings. It’s also the number you’ll use when you register your new employee with the state.
You’ll also need to set up California payroll to comply with the state’s tax laws. This includes withholding income tax but also paying tax to the California Franchise Tax Board. Additionally, California requires all employers, even those with only one employee in the state, to carry workers’ compensation coverage.
You also need to familiarize yourself with required employee benefits. California requires more benefits than most states, including paid sick leave and family leave.
This is just a small sampling of what you’ll need to know to hire a remote employee in California. While navigating the state’s labor laws seems daunting, you can successfully expand your team while remaining compliant with all legal requirements.
Cost to Hire in California
The initial cost to hire an employee in California is not much different from in any other state—it averages about $4,700 but can go higher depending on the position. Learn more about the costs in our breakdown of the costs of hiring an employee.
The higher costs come in when you factor in the ongoing costs to employ a worker in California. According to the Small Business Administration, companies should budget about 1.25 to 1.4 times the salary for the total cost to employ a worker. In California, you should budget on the higher end.
Legal Considerations for Hiring an Employee in California
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Bottom Line
Hiring new employees in California requires knowledge of more employment laws than many other states. By following this guide, you can ensure you hire the right person for the job and ensure compliance with California’s new hire requirements and local labor laws, keeping your business out of trouble.
