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With hundreds of laws in California that relate to employment, it is essential to have experts review your employee handbooks to ensure compliance. Employee handbooks condense and disseminate these laws into an easily understood format to ensure that the business and the employees understand all workplace policies and expectations. Laws regularly change, statutes are revised, and information is added, as a California employer, it is best practice to regularly update your employee handbooks to remain compliant with all relevant state and federal laws.

With a comprehensive and regularly maintained employee handbook, your business has enhanced protections in the case of lawsuits by current or former employees, as you can prove that stated and agreed-upon practices were followed. An up-to-date employee handbook also guides your employees and management on relevant employment laws and how to navigate workplace practices, avoiding repercussions in the form of lawsuits, administrative penalties, fines, and reputational harm.

Legal Foundations of Employee Handbooks in California

While Californian law does not place requirements on whether a business must have an employee handbook, there are laws governing what must be included in an employee handbook if the business has one. Additionally, whether a business has an employee handbook or not, businesses must inform their employees of various legal rights and workplace policies.

Covered topics in an employee handbook should include an at-will statement to clarify that in California employment is considered at-will, state laws, federal regulations, workplace policies, and a place at the end of the document where the employee acknowledges that they have read and understood the policies detailed in the handbook. Including the acknowledgment section for the employee’s signature helps protect your business in the case of legal action, as it confirms the employee was made aware of all relevant policies and laws.

State-specific laws typically expand on the laws set by the federal government and must be detailed in an employee handbook. California provides greater protections to employees than are offered federally, and there are laws governing paid sick leave, crime victim and domestic violence leave, voting leave, rehabilitation leave, meal and rest break mandates, pay transparency policies, and more. Federal laws cover policies that are set by federal law and case precedent, such as the Americans with Disabilities Act and accommodations under it, the Family Medical Leave Act and how to administer it for your company, religious accommodations, equal opportunity employment, anti-discrimination, and federal safety standards, which are separate from state-specific laws but can be expanded upon by state laws. Determining which policies and protections must be included in an employee handbook can be daunting to navigate, so let the attorneys at Chauvel & Glatt, LLP handle the intricacies to keep your business in compliance.

A crucial component to add to any employee handbook is an at-will statement to reinforce that both the employee and the employer can terminate the working relationship at any point. Paired with a clause stating that an employee handbook does not count as an employment contract, this helps protect your business from litigation if and when the employee-employer relationship ends.

Key Reasons to Update Employee Handbooks Regularly

There are a number of reasons to ensure regular reviews and updates to your employee handbook including workplace trend changes, HR best practices updates, revisions to local laws and ordinances, state law changes and implementation, and federal law and agency updates.

One of the largest driving factors for updating an employee handbook is new or updated state laws. A frequently updated law in California that might impact your employee handbook is the annual minimum wage increase for both exempt and nonexempt employees. Discrimination law was a category that saw more than one update in 2025 for California, and ensuring compliance with the new laws concerning protected characteristics, identification requirements, court duty excused absences, and employment discrimination policy enforcement will protect your business from costly lawsuits, fines, and reputational harm.

Federal laws and policies frequently change, and staying abreast of those changes and updating your employee handbook will help your business practices remain compliant with all federal agencies and laws. A recent Occupational Safety and Health Administration ruling regarding PPE is an example of a change that could affect employee handbook written policies and business practices and should be included in an employee handbook update.

Various municipalities in California have city and county-specific laws that must be included in an employee handbook if your business operates in those areas. Both San Francisco and Los Angeles have scheduling laws that require employers to provide schedules at least two weeks in advance, San Francisco has a law requiring supplemental compensation for a new child bonding period, and Los Angeles has specific laws regarding how paid sick leave may be used in addition to use for illness as examples of locality specific laws.

Changing workplace trends towards practices like hybrid or remote work environments and technology advancements and subsequent adoption of advancements like AI, along with HR best practices including pay transparency and interdepartmental collaboration are more causes to update employee handbooks. Hybrid and remote work policies should be clearly stated in employee handbooks to guard against misinterpretation or confusion about work duties and working hours. With the increased utilization of AI, handbooks must be updated to reflect what the acceptable and ethical use of AI looks like within the company to prevent any misunderstandings or potential regulatory fallout.

Recent Legislative and Judicial Changes Affecting Employee Handbooks

Several new legislative changes have taken effect in California for 2025 that necessitate employee handbook updates, including ones affecting minimum wage, paid time off, discrimination, retaliation, workplace safety, and arbitration.

For all employers, no matter how many people they employ, the nonexempt hourly wage has increased to $16.50, although some localities have higher minimum wages, such as Los Angeles with $17.28 as the hourly minimum, and San Francisco’s hourly minimum wage of $18.67. If your business operates or has any remote employees located in one of these municipalities, ensure that your handbook is updated to reflect these minimum wages. For exempt employees statewide, the new minimum annual salary is $68,640. 

California’s Fair Employment and Housing Act (FEHA) was revised to state that not only is discrimination prohibited based on individual protected characteristics, but is also prohibited for combinations of two or more protected characteristics – also known as intersectionality. It is important that harassment policies reflect this update. 

Covid-19 protocols and regulations have been changed for 2025 and should be reviewed to determine how they impact your business. Employers are also still required to initiate and maintain an Injury and Illness Prevention Program to promote workplace safety and wellness, which should be referenced and discussed in the employee handbook. However, employers should have separate detailed policies regarding their Injury Illness Prevent Program and Workplace Violence Prevention Plans as required by California law. 

7 Critical Policies to Review and Update in California Employee Handbooks

The best practice for employee handbooks is to review and update them at least annually, but biannual or quarterly reviews will help ensure your company remains in compliance with changing legislation.

1. Wage and Hour Compliance

Not only does California have minimum wage adjustments annually, but they also require overtime pay for nonexempt employees if those employees work more than 8 hours consecutively in a day, 40 hours in one week, for all hours worked on a seventh consecutive day in a single workweek, and if the employee works more than 12 hours in a single 24-hour day nonconsecutively. 

California laws dictate the length and frequency of both meal breaks and rest periods during an employee’s shift and can vary depending on municipality. Clearly outlining these policies is a requirement for California employee handbooks.

Currently, California’s pay transparency requires all job postings to include pay ranges and give employees the right to request pay scale information at any point in their employment. There is also legislation currently in session that would require pay scales listed in job advertisements to be no more than 10% above or below the mean pay rate within the wage range.

Penalties for violating wage requirements can include fines, imprisonment, legal fees, back pay to affected employees, and levies against the business’ property. The employment law services at Chauvel & Glatt, LLP can help you address these regulations in your employee handbook and implement practices to avoid facing problems with wage and hour compliance.

2. Leave Policies

Leaves of absence laws in California were recently updated to state that employees can use paid sick leave for time off work needed because the employee or one of their family has experienced an act of violence or a crime, allowing them to use that paid time off to receive services from a shelter, seek medical attention, counseling, obtain safety protections, or file for a restraining order. Employers can also no longer require employees to use up to 2 weeks of earned vacation time before applying for the state’s paid family leave benefits.

Updates to the California Family Rights Act have increased the amount of income paid to an employee on Paid Family Leave (PFL) or State Disability Insurance (SDI) to 70-90% of their income. These expansions have expanded the relationships that qualify for job-protected care under PFL to include immediate family, in-laws, and a designated person who can be chosen or extended family.

For both bereavement and reproductive loss (on the part of either the employee or their partner/spouse), employers with 5 or more employees must provide a minimum of 5 days of leave. These days do not have to be consecutive as long as they are taken within 3 months of the loss.

All these policies should be revised or updated in an Employee Handbook to ensure your policies are compliant with update to date California labor law requirements. 

3. Harassment, Discrimination, and Retaliation Protections

California’s FEHA has expanded protected characteristics to include sex, color, age, ancestry, creed, both mental and physical disabilities, marital status, medical conditions, denial of family and medical care leave, sexual orientation, religion, race, primary language, citizenship, immigration status, and national origin, and prohibits discrimination based on these categories either solely or in combination with other protected characteristics.

The FEHA also mandates required components of anti-harassment training that include written policies available to all employees, , official policies for responding to and handling complaints, complaint investigation processes, and appropriate remedial actions. Including these procedures and processes in your employee handbook provides transparency and accountability, while protecting your business from legal action in the event of a harassment claim.

Employers are now required to post notices and inform employees of whistleblower rights, and the information must include the whistleblower hotline number. This notice must be displayed where employees can easily access it, and remote employees should receive this information via email. It is recommended as a best practice to also include this information in an employee handbook.

4. Remote and Hybrid Work Policies

In California, employers must reimburse employees for the portion of their internet and phone bills used for work, and all other reasonable work expenses such as equipment, supplies, and mileage.

Even for remote employees, California employers are required to ensure workplace safety through ergonomic equipment and proper training to reduce injury and accident risks. They must also ensure remote and hybrid employees know how to file worker’s compensation claims for injuries sustained while working at home.

Strong data security measures in the form of VPN access, confidentiality policies, and secure communication channels are essential for managing remote and hybrid employees and should be clearly communicated in employee handbooks.

5. Employee Conduct and Social Media Policies

Laws in California protect employees’ rights to lawful off-duty conduct, however, an employee can still be terminated if the behavior will negatively affect or harm the business and if it violates documented company policy. If the behavior was discovered by the employer in a way that could be considered an invasion of privacy, it could violate the employee’s rights.

Social media policies need to be in place and documented in a handbook to outline expectations for employee and business use and to protect the company from litigation in the event an employee is terminated due to social media content. Ensuring the policies are regularly reviewed and updated in the everchanging online environments keeps companies in compliance with all relevant laws.

6. Workplace Safety and Health Policies

Regulatory penalties for violating Cal/OSHA requirements have increased in 2025, making it crucial to review and update workplace safety and health practices in your employee handbook to avoid violations and protect your business from fines and damages.

Creating a written Injury and Illness Prevention Program in compliance with California law is required to ensure employees comply with safe and healthy work practices. Including this program in the handbook allows employees to review it as needed, improving the safety of the workplace.

As of February 3, 2025, COVID-19 prevention regulations are no longer in effect for California, eliminating regulatory requirements for COVID-19 prevention in places of business. However, the regulations requiring reporting and recordkeeping by employers of employees who have contracted COVID-19 and been at work during the incubation or infection period remain in effect until February 3, 2026. 

7. Hiring, Discipline, and Termination Procedures

Recent California law updates prohibit employers from requiring an applicant to have a driver’s license unless the position requires driving and the employer reasonably believes that other forms of transportation would negatively impact travel time or costs for the employer.

“Ban the Box” laws prohibit employers from asking applicants about criminal conviction history in the initial application and interviewing process, and are prohibited from considering criminal history not resulting in a conviction when making hiring decisions, but background check results can be considered when determining whether to accept or deny a candidate after a conditional offer has been presented.

In California, depending on whether an employee was terminated or voluntarily left and whether notice was given or not, the final paycheck due to an employee must be ready for them either on their last day or within 72 hours of their last day. Stating these parameters in the handbook provides clarification and accountability for both parties.

Ensuring Legal Compliance and Reducing Liability Risks

Conducting annual reviews of employee handbooks and ensuring compliance with updated and new California labor laws protects your business from regulatory penalties, reputational harm, and litigation.

Consulting employment attorneys will help you interpret changes and implement them to comply with California’s strict laws and avoid broad generalizations that could infringe on employee rights.

Best Practices for Communicating Updates to Employees

When handbooks are updated, ensure all employees are provided with an updated Employee handbook and confirm receipt and acknowledgement of such Handbook. Utilizing acknowledgment systems with physical or digital signatures confirms employees have read and understood the updates and helps protect the business. Previous handbook versions should be retained for compliance review and protection in the case of legal action.

It is also essential to provide accessible/in-language updates for multilingual or disabled employees to comply with anti-discrimination and accommodation laws.

Professional Handbook Reviews for California Companies

Updating your employee handbook in proactive compliance with changing laws protects your business from costly litigation, claims of discrimination, and regulatory impacts. It also increases transparency and accountability for your business, encouraging a culture of legal compliance that can only benefit your company.For a comprehensive review your employee handbook, or for assistance in building a new employee handbook, contact the employment attorneys at Chauvel & Glatt, LLP today.