Businesses in California have access to a highly-skilled workforce, thanks to the state’s world-class universities, community colleges, and workforce training providers. The state offers incentives to encourage hiring, and businesses must also be mindful of responsibilities for administering employees, including business registration filings, wage and hour laws, workers compensation insurance requirements and health care responsibilities. Explore the tabs below to learn more.
The California Competes Tax Credit is an income tax credit available to companies that want to come to California or stay and grow in California.
Employment Training Panel
The Employment Training Panel (ETP) provides funding to employers to assist in upgrading the skills of their workers through training that leads to well-paying, long-term jobs.
New Employment Credit
The New Employment Credit is an income tax credit available to companies that hire full-time employees within designated geographic areas.
Work Opportunity Tax Credit
The Employment Development Department is the Work Opportunity Tax Credit (WOTC) certifying agency for California employers. WOTC is a federal tax credit incentive available to employers for hiring individuals from certain target groups (veterans, ex-felons, youth, and more) who have consistently faced significant barriers to employment.
Fidelity Bonding Program
The Employment Development Department Fidelity Bonding Program (PDF) helps ease employers’ concerns with hiring ex-offenders and at-risk job applicants by providing a level of insurance for employers against possible theft and dishonest or fraudulent acts. The bonding program is provided at no cost to employers, employees, and job seekers at America’s Job Center of California locations.
California’s superior educational system and workforce training initiatives produce an unrivaled, highly skilled labor force. California businesses have access to a full menu of workforce services, including training reimbursements, workforce recruitment and training, education, and labor market information.Learn More
Employment Development Department Registration
An employer is required to file a Registration Form within 15 days after paying more than $100 in wages to one or more employees.
Internal Revenue Service (IRS) – Employment Identification Number Registration
Employers with employees, business partnerships, and corporations, must obtain a Federal Employer Identification Number (EIN) from the IRS. Businesses can obtain appropriate federal income tax forms using the IRS website. You can contact them at (909) 388-8108.
Businesses with employees must maintain Workers’ Compensation Insurance coverage. Consult the California Department of Industrial Relations (DIR) website and view a list of DIR Frequently Asked Questions about Workers’ Compensation for employers.
Employers may finance their liability for workers’ compensation benefits by one of three methods:
- Self insurance – Most large, stable employers and most government agencies are self-insured for workers’ compensation. To become self-insured, employers must obtain a certificate from the Department of Industrial Relations.
- Private insurance – Employers may purchase insurance from any of the private insurance companies which are licensed by the Department of Insurance to transact workers’ compensation insurance in California.
- State insurance – Employers may also purchase insurance from the State Compensation Insurance Fund, a state-operated entity that exists solely to transact workers’ compensation insurance on a non-profit basis.
If you are an out-of-state employer you may need workers’ compensation coverage if you have any employees regularly working in California, or if you enter into a contract of employment in California.
Employee Wage and Hour Laws
Wages, Hours, & Working Conditions
Businesses with employees must comply with laws establishing minimum standards for wages, hours and working conditions.
Reporting Uncashed Payroll Checks
Businesses are required to report uncashed payroll items as unclaimed property to the State Controller.
Paid Sick Leave
The Healthy Workplace Healthy Family Act of 2014 (Assembly bill 1522), California’s new paid sick leave law, took effect on July 1, 2015. An employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the beginning of employment is entitled to paid sick leave.
Employee Safety and Health
The Division of Occupational Safety and Health (DOSH), better known as Cal/OSHA, protects and improves the health and safety of working men and women in California.
Cal/OSHA’s Consultation Services Branch provides free and voluntary assistance to employers to improve their health and safety programs.
Paid Sick Leave – The Healthy Workplace Healthy Family Act of 2014 (Assembly bill 1522), California’s new paid sick leave law, took effect on July 1, 2015. An employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the beginning of employment is entitled to paid sick leave.
Affordable Health Care Act
The Affordable Health Care Act contains both responsibilities and benefits for employers in California. Information about the Affordable Care Act from the Internal Revenue Service (IRS) is summarized below, and we encourage you to visit IRS Affordable Care Act to learn more.
|Number of Employees||Resource||Details|
|Fewer than 25||Small Business Health Care Tax Credit||If qualified, this credit can help cover the cost of providing coverage.|
|50 or fewer||In California, the Covered California marketplace administers the SHOP program. Covered California also provides a list of frequently asked questions related to businesses and the Affordable Care Act.|
|50 or more||Information Reporting By Applicable Large Employers||Employers need to document the health insurance provided to their employees.|
The U.S. Small Business Administration (SBA) also provides informational resources to help small businesses better understand the Affordable Care Act.
The Department of Fair Employment and Housing (DFEH) is the state agency charged with enforcing California’s civil rights laws. It is part of the mission of DFEH to protect the people of California from unlawful discrimination in employment.
The Governor’s Office of Business and Economic Development (GO-Biz) serves as the State of California's leader for job growth and economic development efforts. GO-Biz partnered with the State's Information Technology Leadership Academy 22 to create the California Business Portal.