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New California labor laws you need to know about

Being a business owner in California means staying up-to-date on our ever-changing labor laws. Every new year brings a number of new laws that give California workers greater rights and benefits than people in most other states. This year is no exception.

Recently, we discussed a new law impacting how independent contractors are classified. That’s just one of a number of labor laws that took effect on Jan. 1. Let’s look at some key changes that construction business owners need to follow:

Minimum wage

Businesses with over 26 employees must now pay workers at least a $13-per-hour minimum wage. Those with 26 or fewer workers must pay at least $12 per hour. However, note that in some areas, including Los Angeles County, those minimum rates go up even more on July 1 (to $15 and $14.25 respectively). These raises are part of a larger plan that will make the minimum hourly wage in California $15 for almost all employees by 2023.


There’s been a movement in recent years to prevent employers from requiring employees to agree to settle disputes via arbitration rather than in court. One new law prohibits mandatory arbitration. A related new law imposes penalties on companies that delay or fail to pay their arbitration fees.

Deadlines for filing complaints

A new law extends the statute of limitation for filing harassment, discrimination and retaliation complaints from one year to three years. Another one prohibits employers from including a “no re-hire” clause in a settlement with an employee.

Corporate diversity

As of Jan. 1, the boards of directors of all publicly traded companies that have their headquarters here in California must have at least one female. By 2022, all boards of five or more people must have at least two women and those with more than five must have at least three. This is the first law of its kind in the U.S.

Some of these laws are still facing court challenges. However, at least for the foreseeable future, California employers need to abide by them or face potentially significant penalties. That’s why it’s essential for construction companies of all sizes to be sure that they’re in compliance.