Recently, in Mora v. C.E. Enterprises, Inc., the California Court of Appeal upheld a trial court’s decision in favor of an auto dealership alleged to have used an improper “piece rate” or “flag hours” compensation model.

Two former service technicians alleged that the dealership’s compensation system violated requirements for compensating for productive and non-productive time and failed to comply with Labor Code section 226.2. They claimed they were not fully compensated for all hours worked and sought relief under both traditional wage and hour claims and the Private Attorneys General Act (PAGA).

The court rejected the employees’ arguments, concluding that the dealership’s hourly pay plan complied with California wage laws.

Like many dealerships, C.E. Enterprises previously paid service technicians under a “flag” or piece rate system which assigned a pre-determined amount of time and monetary value to each task. In light of several Court of Appeal decisions, the employer changed to an hourly pay system whereby technicians earned at least double the minimum wage for all hours worked. As part of the new compensation system, employees could earn “flag bonus pay” when their efficiency, measured in “flag hours” assigned per service task, exceeded their guaranteed hourly and overtime earnings.

The trial court found that this “flag bonus” was a true bonus and not piece-rate compensation. In affirming the ruling, the appellate court distinguished C.E. Enterprises’ plan from plans invalidated in a prior Court of Appeal case involving auto dealerships. In that case, the employer averaged productive and nonproductive hours, resulting in what the court referred to as “borrowing” to meet minimum wage obligations. In contrast, C.E. Enterprises paid at least double the minimum wage for all time worked. Because technicians were paid for every clocked hour, including unproductive time, at the same above minimum wage rate, the Court of Appeal held the plan did not run afoul of California’s wage and hour standards.

The court also upheld the employer’s compliance with section 226.2, which governs pay for employees compensated by piece rate. The court held that even assuming the “flag bonus” could be considered piece-rate pay, the employer separately compensated rest and nonproductive periods at an hourly rate exceeding minimum wage.

Plaintiffs’ broader PAGA claims failed as well, both for lack of evidentiary support and procedural deficiencies in their notice to the Labor and Workforce Development Agency.

For California employers, the decision offers useful clarity on pay structures that combine hourly wages with productivity-based bonuses. The key, as highlighted by the Court, is to start by ensuring that employees are compensated for all hours worked – including non-productive time such as rest breaks, at minimum wage or above. Bonuses such as flag incentives should considered be a separate component of pay and may not be averaged or borrowed against to make up minimum wage requirements.

If you have questions about hybrid compensation plans or related issues, contact a Jackson Lewis attorney to discuss.

The complexities of California employment law begin not when an employer extends an offer, but as soon as they decide to post a job opening. Employers should ensure compliance with California’s job posting and hiring requirements in 2026.

Pay Scale

California law requires employers with 15 or more employees to include a pay scale in every job posting. As amended by Senate Bill 642, “pay scale” means a “good-faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.” Employers are not required to include overtime, bonuses, or benefits in the posted range. However, if the position’s base pay is determined in whole or in part by a piece-rate or commission structure, the expected range of that piece rate or commission must be disclosed. The pay-scale posting rule is distinct from California’s equal-pay laws, which define “wages” more broadly for pay-equity purposes.

Equal Opportunity Employment

The California Fair Employment and Housing Act (FEHA) prohibits discrimination based on a wide range of protected characteristics, from race and gender identity to marital status and genetic information. That means your job posting should avoid language that could be seen as exclusionary.

Since January 1, 2025, California has prohibited employers from including statements about the need for a driver’s license unless the employer reasonably expects driving to be one of the functions of the job, and an alternative form of transportation would not be comparable.

Fair Chance Act
Under the Fair Chance Act, employers cannot include statements that discourage applicants with criminal histories. Background checks and related inquiries are only allowed after a conditional offer has been made. In cities like Los Angeles and San Francisco, local ordinances go further, requiring postings to affirm that qualified applicants with criminal histories will be considered.

Privacy Protections
California’s Consumer Privacy Act (CCPA) extends to job applicants. Employers subject to the CCPA must provide a clear notice explaining, among other things, what personal data will be collected and why, how long it will be retained, and whether it will be sold or disclosed for cross-context behavioral advertising. Employers must also post on their websites a more detailed privacy policy, which, along with other disclosures, provides applicants with information about exercising their CCPA rights, including the ability to request access to, or correction or deletion of, their data. Additionally, employers must assess whether their processing of applicant data triggers obligations under CCPA’s recently finalized automated decision-making technology (ADMT) regulations and/or under its regulations requiring assessment in connection with certain high-risk activities.

If you have questions about compliance with California job posting requirements and related issues, contact a Jackson Lewis attorney to discuss.

The Los Angeles County Board of Supervisors has passed a new Hotel Worker Protection Ordinance for unincorporated areas of the county. Similar to the City of  Los Angeles and West Hollywood ordinances, the ordinance sets forth additional obligations for hotel employers to enhance the safety of employees.  

The ordinance becomes operative on April 1, 2026, but the training requirements discussed below take effect on October 1, 2026.

Covered Employers

The ordinance covers hotel employers in unincorporated areas of Los Angeles County. Hotel employer is defined as anyone who owns, controls, or operates a hotel, and includes contractors who employ hotel workers.

Hotels may apply for waivers if compliance with the ordinance would result in significant workforce reductions or even force the hotel to close. This allows some flexibility for employers facing extraordinary circumstances.

Personal Security Devices

Under the ordinance, all hotel employers must provide personal security devices, commonly called panic buttons, at no cost to workers who are assigned to guest rooms or restrooms where they may be alone.

Workload and Hours Limitation

The ordinance caps room cleaning assignments to prevent overwork. For hotels with fewer than 40 rooms, workers can be assigned no more than 4,500 square feet of cleaning per eight-hour workday. If an employee is assigned more than this, they must receive double pay for the extra work. Hotels with 40 or more guest rooms must assign workers to no more than 3,500 square feet of floor space in any eight-hour workday or pay them double for the extra work.

There are also restrictions regarding the number of rooms an employee may be assigned to clean following guest departures within a single workday.

Training

Employers are required to provide public housekeeping training through certified organizations. This ensures that staff are properly equipped with the necessary skills and knowledge to perform their duties safely and effectively.

Employers should start preparing now to ensure their policies, procedures, and training programs align with the new standards. Staying ahead of these requirements will help protect your employees, minimize risks, and maintain a positive workplace culture.

If you have questions about the County of Los Angeles’s ordinance or related issues, contact a Jackson Lewis attorney to discuss.

State Minimum Wage

On January 1, 2026, California’s minimum wage will increase from $16.50 to $16.90 per hour.

Local Minimum Wage

Also on January 1, 2026, several local municipalities will increase their minimum wage rates. Local jurisdictions are allowed to set the minimum wage higher than the state minimum.

Below is a list of some of the local minimum wages increasing at the start of the year.

LocaleNew Rate
Belmont$18.95
Burlingame$17.86
East Palo Alto$17.90
El Cerrito$18.82
Half Moon Bay$17.91
Hayward$17.79 for 26 or more employees
$16.90 for 25 or fewer employees
Los Altos$18.70
Menlo Park$17.55
Mountain View$19.70
Palo Alto$18.70
Petaluma$18.31
Redwood$18.65
Richmond$19.18
San Carlos$17.75
San Diego$17.75
San Jose$18.45
San Mateo$18.60
San Mateo County (unincorporated)$17.95
Santa Clara$18.70
Santa Rosa$18.21
South San Francisco$18.15
Sunnyvale$19.50
West Hollywood$20.25

Industry-Specific Minimum Wage

Certain industries in the state of California, such as fast food and healthcare, are subject to higher minimum wage thresholds than the state’s minimum wage. Fast food workers currently earn a minimum of $20 per hour. The healthcare worker’s minimum wage is based on a tiered system, which is higher than the state’s minimum wage, and which is set to increase on July 1, 2026.

Next Steps / Questions

Employers must continue to monitor the minimum wages at the industry, local, and state levels.   

If you have questions about California’s minimum wage or related issues, please reach out to a Jackson Lewis attorney to discuss.

Each year, California’s minimum wage rises, but along with hourly workers’ wages increasing, so too does the salary threshold for employees to be exempt from overtime. For an employee to be exempt from overtime under California law, their job must fall into a specific exempt category and meet a designated wage rate.

The most common exemptions are for executive, administrative, and professional roles. Employees in these capacities generally qualify if their work meets detailed requirements and they earn at least twice the state minimum wage for full-time employment. In 2026, exempt employees will increase from $68,640 to $70,304 per year on January 1, 2026, in accordance with California’s requirement that exempt employees must earn at least twice the state minimum wage for full-time work (40 hours per week, 52 weeks per year).

For certain exempt categories, however, the Department of Industrial Relations sets increases based on changes to the California Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI). For example, under the Labor Code, certain computer software employees and licensed physicians and surgeons must be paid a statutorily specified rate based on the CPI to be deemed exempt from overtime regulations.

According to Labor Code section 515.5, employees working in the computer software field who satisfy specific conditions will be exempt from overtime regulations. This exemption covers individuals whose primary duties involve intellectually or creatively focused work that necessitates discretion and independent judgment. These employees must also possess a high level of skill and engage in tasks such as programming, systems analysis, and software design.

Effective January 1, 2026, the minimum hourly rate for computer software employees to meet this exemption will be $58.85, with a minimum monthly salary of $10,214.44 (annually $122,573.13).

Similarly, under Labor Code section 515.6, certain licensed physicians and surgeons must be paid a minimum hourly rate. Effective January 1, 2026, that hourly rate is $107.17 to meet the exemption.

If you have questions about overtime exemption requirements or related issues, contact a Jackson Lewis attorney to discuss.

Senate Bill (SB) 596 represents asignificant development for California general acute care hospitals, acute psychiatric hospitals, and special hospitals. Governor Newsom signed SB 596 into law on October 13, 2025, amending California’s Health and Safety Code § 1280.3 to expand civil penalties for certain licensed health facilities that fail to maintain mandated staffing ratios.

While the nurse-to-patient ratio framework in California is not new, SB 596 reshapes the enforcement landscape. It raises maximum penalties and clarifies that each day a facility is out of compliance constitutes a separate and distinct violation.

For hospitals and acute-care employers, this change transforms what might once have been treated as a single regulatory citation into a potentially costly, multi-day series of penalties. It also underscores the California Department of Public Health’s renewed emphasis on staffing compliance and patient-safety documentation.

What SB 596 Does?

Daily Counting of Violations

Each day a staffing-ratio violation occurs, or continues, counts as a separate offense. A week of non-compliance could therefore trigger seven individual penalties rather than one.  This change is found in 1280.3 (f)(1).

Clarification of “On-Call Lists”

The bill also defines what constitutes an “on-call list” for purposes of determining whether a facility attempted to meet staffing ratios. Facilities relying on ad-hoc or outdated lists of nurses may no longer be considered compliant if those lists are not current, verifiable, and reasonably accessible.  This new law also clarified that a hospital contacting, or attempting to contact, licensed nurses who are not scheduled to be on call and who are not assigned to a float pool for the unit and shift where an alleged violation occurred shall not be considered as exhausting an on-call list for purposes of compliance. This change is found in 1280.3 (f)(4)(A)(iii).

Strategic Implications for Healthcare Employers

State regulators have long emphasized patient safety, but SB 596 signals a clear shift from education to enforcement through monetary deterrence. Hospitals should anticipate closer scrutiny of staffing documentation, including shift schedules, nurse assignment sheets, and float-pool utilization.

By converting ongoing violations into multiple daily offenses, the law amplifies financial exposure and could draw attention from plaintiffs’ attorneys and unions seeking to leverage citations in related disputes. Even though SB 596 is an administrative measure, repeated findings of non-compliance can bolster arguments about systemic understaffing or unsafe conditions.

Persistent staffing shortages, burnout, and competition for nursing talent have already strained hospitals. The new penalty structure may intensify these challenges by requiring more robust contingency planning, better overtime management, and stronger documentation to defend staffing decisions.

SB 596 takes effect January 1, 2026, but preparation should begin now. Enforcement agencies are expected to issue interpretive guidance before implementation, and hospitals that can demonstrate proactive compliance efforts will be better positioned during inspections and potential audits.

Here are some ways for healthcare employers to prepare:

1. Audit Current Staffing Policies

Review existing nurse-to-patient ratio policies and ensure they reflect the current regulatory standards. Pay close attention to high-acuity units and emergency departments where ratios are most frequently questioned.

2. Strengthen Documentation

Maintain contemporaneous, accurate records of daily staffing levels, reassignments, and justifications for deviations. Electronic systems that capture staffing data in real time can provide critical evidence of compliance.

3. Validate “On-Call Lists”

Ensure on-call lists are current and verifiable for meeting staffing obligations. Outdated or informal rosters may no longer be sufficient to demonstrate a good-faith compliance effort.

4. Train Supervisory Staff

Charge nurses and shift supervisors should understand both the ratio requirements and the expanded penalty framework. Training should emphasize how to escalate shortages promptly and document mitigation steps.

5. Evaluate Contingency and Float-Pool Plans

Facilities should review how float-pool nurses, agency staff, and cross-trained employees are deployed. Review regularly scheduled float pool shifts to better strengthen compliance.  Written plans showing how coverage is maintained can help defend against “pattern-of-non-compliance” allegations.

6. Engage Legal and Compliance Teams Early

Hospitals should work with counsel to:

  • Assess exposure from prior citations or corrective-action plans.
  • Develop internal reporting processes for potential violations.
  • Coordinate communications with the Department of Public Health.

It is anticipated that there will be legal action taken to enjoin this law. We will continue to track developments as they occur.  For guidance on preparing for SB 596, please contact a Jackson Lewis Attorney to discuss.

The National Labor Relations Board (NLRB) has filed a lawsuit against the state of California seeking to block a new law that would allow the California Public Employment Relations Board (PERB) to take on responsibilities traditionally handled by the NLRB.

Previously, Governor Newsom signed Assembly Bill (AB) 288, which expands both worker rights and the authority of the state’s Public Employment Relations Board (PERB). 

The NLRB responded by filing a complaint in federal court, arguing that California’s new law violates the National Labor Relations Act, which grants the federal agency exclusive jurisdiction over private-sector labor relations. The Board contends that allowing PERB to oversee these matters would create a parallel enforcement system that conflicts with federal authority and disrupts the uniformity of national labor policy. According to the NLRB, this overlap could lead to inconsistent rulings, duplicative proceedings, and a confusing patchwork of standards for employers operating in multiple states.

For now, the lawsuit places AB 288’s implementation in question. The NLRB is seeking an injunction to prevent California from enforcing the law, and the outcome will determine whether PERB can proceed with its planned expansion into private-sector labor matters. While the court process unfolds, employers should remain alert. New York has already taken a similar approach, and other states may follow.

Jackson Lewis will continue to track developments related to AB 288. If you have questions about AB 288 or related issues, contact a Jackson Lewis attorney to discuss.

The City of San Diego’s hospitality industry is ushering in substantial changes in wage requirements. The City Council has passed an ordinance establishing a new minimum wage schedule for employees at hotels, amusement parks, and event centers. If you are an employer in these sectors, it’s crucial to understand the timeline and requirements to ensure compliance and avoid penalties.

Who Is Covered?

The ordinance applies to:

  • Hotels with at least 150 guest rooms or suites.
  • Amusement parks with at least 75 contiguous acres, operated for profit and under contract with the City.
  • Event centers, specifically including Petco Park, Pechanga Arena San Diego, San Diego Convention Center, and Civic Theatre, including their associated facilities.

Minimum Wage Schedule

Here’s a breakdown of the scheduled minimum wage increases for covered hospitality employers:

YearHotels & Amusement ParksEvent Centers
July 1, 2026$19.00/hr$21.06/hr
July 1, 2027$20.50/hr$22.00/hr
July 1, 2028$22.00/hr$23.00/hr
July 1, 2029$23.50/hr$24.00/hr
July 1, 2030  $25.00/hr$25.00/hr


Starting July 1, 2031, the minimum wage will increase annually based on the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers, U.S. City Average for All Items. The City will announce the new rate by April 1 each year, effective July 1.

Employer Obligations

The City will provide official notices and templates. Employers are required to post these in conspicuous locations and provide written notice to employees in their primary language.

Next Steps

Employers in San Diego’s hospitality sector should review their current wage practices and prepare for the upcoming changes.  For further guidance on the San Diego Hospitality Minimum Wage Ordinance or related compliance matters, contact a Jackson Lewis attorney to discuss.

On October 13, 2025, California’s Governor signed Senate Bill (SB) 20, which amends the Labor Code to target occupational exposure to crystalline silica in the artificial stone fabrication industry, introducing new definitions, exposure controls, training, reporting, and enforcement mechanisms.  Occupational silicosis is a lung disease caused by respirable dust containing crystalline silica, a mineral commonly found in engineered and natural stone materials used in products such as countertops.  Workers risk inhaling hazardous levels of silica dust when performing high-exposure trigger tasks, including cutting, grinding, polishing, or cleaning up certain silica-containing materials. 

In response to the increase in silicosis among artificial stone workers, the new law expands the definition of “serious injury or illness” to include silicosis and silica-related lung cancer.   The new law bans the use of dry methods when engaged in high-exposure trigger tasks and requires employers to use wet methods to effectively suppress respirable crystalline silica dust when employees engage in such tasks.  Beginning July 1, 2026, owners and operators of fabrication shops must ensure that employees engaged in these tasks receive appropriate training.  Employers must also submit written annual attestations to the Division to confirm that the required training has been provided.

The State Department of Public Health (CDPH) must consider silicosis a serious illness and is required to report cases within three days to the Division of Occupational Safety and Health (DOSH), which will then initiate investigations as specified in the legislation.  DOSH must also notify CDPH of artificial stone-related silicosis cases identified through its enforcement activities within five days and share exposure assessment results within 30 days of receipt. 

CDPH is tasked with addressing silicosis risk exposure in fabrication shops by identifying businesses that conduct these high-exposure trigger activities, providing outreach and education about silicosis prevention and diagnosis, and offering technical assistance to local health jurisdictions involved in silicosis surveillance and prevention. 

Employers who violate these requirements may face citations, orders prohibiting continued work, and civil penalties.