California Employment Agreement
Draft a California employment agreement that complies with IWC wage orders, Labor Code meal-and-rest and final-pay rules, and the Business & Professions Code § 16600 ban that makes employee non-competes void in California.
AI-generated draft for review. Not legal advice. Starting at $29.
Legal Requirements in California
Comply with the applicable IWC Wage Order and Labor Code § 510 daily/weekly overtime: time-and-a-half after 8 hours/day or 40 hours/week, and double time after 12 hours/day.
Provide meal periods (30-minute unpaid meal before the end of the 5th hour; a second before the 11th hour) and paid 10-minute rest breaks per 4 hours under Labor Code § 226.7 and the wage orders; a missed break owes one hour of premium pay.
Pay final wages on time under Labor Code §§ 201-203: immediately on discharge, or within 72 hours when an employee quits, or waiting-time penalties accrue.
Furnish itemized wage statements with all required data under Labor Code § 226.
Pay at least the statewide minimum wage of $16.90/hour effective January 1, 2026 (higher where a local ordinance applies).
Do not include an employee non-compete: under Bus. & Prof. Code §§ 16600 and 16600.5 such clauses are void and unenforceable, and AB 1076 (§ 16600.1) made requiring one a civil violation with a notice duty to affected workers.
Key Statutes & Regulations
- California Labor Code § 510 (daily/weekly overtime) (2026)
- California Labor Code § 226.7 (meal and rest break premiums) (2026)
- California Labor Code §§ 201-203 (final pay and waiting-time penalties) (2026)
- California Labor Code § 226 (itemized wage statements) (2026)
- California Business & Professions Code §§ 16600, 16600.5 (non-compete ban; SB 699) (2026)
Common Pitfalls
- •Including a non-compete or overbroad customer/employee non-solicit, which is void under § 16600 and can expose the employer to a civil violation and the employee's attorneys' fees.
- •Applying only weekly overtime and missing California's daily overtime and double-time thresholds under Labor Code § 510.
- •Auto-deducting meal breaks or pressuring employees to work through them, owing one hour of premium pay per missed break under § 226.7.
- •Delaying a terminated employee's final paycheck and triggering waiting-time penalties of up to 30 days' wages under Labor Code § 203.
Local Terminology
- Wage order
- One of the IWC Industrial Welfare Commission orders that set industry-specific rules on hours, meals, rest, and conditions in California.
- Waiting-time penalty
- Under Labor Code § 203, up to 30 days of the employee's daily wages owed when final pay is late.
- Premium pay
- One additional hour at the regular rate owed for each non-compliant meal or rest break under Labor Code § 226.7.
How California Differs
California voids employee non-competes entirely (Bus. & Prof. Code § 16600), and SB 699 (§ 16600.5) makes them unenforceable regardless of where or when signed, the opposite of Texas.
Overtime is calculated daily as well as weekly (Labor Code § 510), unlike the federal weekly-only FLSA standard.
California mandates duty-free meal and rest breaks with a one-hour premium for violations (Labor Code § 226.7), a protection absent from federal law.
Final pay is due immediately on discharge with waiting-time penalties (Labor Code § 203), far stricter than most states.
Meal/rest premium pay counts as a "wage," so it must appear on wage statements and in final pay under Naranjo v. Spectrum Security Services.
Frequently Asked Questions
Are non-compete agreements enforceable in California?
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No. Under California Business & Professions Code § 16600, employee non-competes are void, and SB 699 (§ 16600.5) makes them unenforceable regardless of where or when signed. Requiring one is a civil violation under AB 1076, which also obligated employers to notify affected current and former employees that such clauses are void.
How does California overtime differ from federal law?
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California uses daily overtime under Labor Code § 510: non-exempt employees earn time-and-a-half after 8 hours in a day (and after 40 in a week) and double time after 12 hours in a day. Federal FLSA only requires overtime after 40 hours per week, so California is significantly more protective.
When must a California employer pay final wages?
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Under Labor Code §§ 201-203, a discharged employee must be paid all final wages immediately at termination, and an employee who quits must be paid within 72 hours (or immediately if they gave 72 hours' notice). Late final pay triggers waiting-time penalties of up to 30 days of the employee's wages.
What are California's meal and rest break rules?
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Under Labor Code § 226.7 and the wage orders, non-exempt employees get a 30-minute unpaid meal period before the end of the fifth hour, a second meal for shifts over 10 hours, and a paid 10-minute rest break per four hours worked. Each non-compliant break owes one hour of premium pay.
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