Wage and Hour Compliance - Manager Reference

ABC Test and Independent Contractor Classification

The salon does not employ any independent contractors for services performed on-site. Any individual performing cosmetology services for clients of this salon is an employee. California's ABC test (Labor Code § 2750.3 / AB 5) sets a very high bar for independent contractor classification, and cosmetologists working in a salon setting generally do not qualify.

Local Minimum Wages

Many California cities and counties have minimum wages higher than the state minimum. You must pay whichever rate is highest - federal, state, or local. Common examples include:

• Los Angeles City: Check current rate at https://wagesla.lacity.org
• San Francisco: Check current rate at https://sfgov.org/olse
• San Jose, Oakland, Berkeley, and others: Maintain their own minimums

Always verify the current local minimum wage for your jurisdiction, as rates are typically updated annually.

Required Workplace Postings

All required posters must be displayed in a conspicuous location accessible to all employees, such as the break room. Posters must be in English and in any other language spoken by at least 10% of the workforce.

Federal Posters

California Posters

Cosmetology-Specific Posting

• The salon's current establishment license, posted prominently visible to clients
• Each employee's individual cosmetology or esthetician license, displayed at or near their workstation
• The "Infection Control" notice as required by the Board of Barbering and Cosmetology (16 CCR § 979)

Poster Maintenance

• Check poster requirements annually (typically in January) as updated versions are often released when laws change.
• Replace any poster that has become damaged, obscured, or outdated.

Record Keeping Requirements

Payroll Records (Labor Code § 226, § 1174)

Maintain the following for each employee for a minimum of three years:

• Employee's full name, home address, occupation, and Social Security number
• Date of birth (if under age 18)
• Time records showing when the employee begins and ends each work period, including meal breaks
• Total daily and weekly hours worked
• All wages paid each payroll period
• All deductions from wages
• Date of payment and the pay period covered

Employees have the right to inspect or receive a copy of their payroll records within 21 calendar days of a request.

Personnel Files (Labor Code § 1198.5)

• Employees have the right to inspect their own personnel file within 30 days of a written request.
• Retain personnel files for the duration of employment and for at least three years after separation.

Time Records

• Time records must accurately reflect all time worked.
• Do not round time in a manner that systematically favors the employer.
• Employees must not be discouraged from recording all time worked.

Wage Theft Prevention Notices

Retain a signed copy of each employee's Wage Theft Prevention Notice (Labor Code § 2810.5) in their personnel file for the duration of employment.

I-9 Employment Eligibility Verification

• Complete Form I-9 for every employee hired after November 6, 1986.
• Retain I-9s for three years from the date of hire or one year after the date employment ends, whichever is later.

Pay Scale Records (SB 1162)

• Maintain records of job title and wage rate history for each employee.
• Retain for the duration of employment plus three years after separation.

Payday Requirements

• Employees must be paid at least twice per calendar month (semi-monthly).
• Wages earned between the 1st and 15th must be paid by the 26th.
• Wages earned between the 16th and last day must be paid by the 10th of the following month.
• Overtime wages earned in a given payroll period must be paid no later than the payday for the next regular payroll period.
• The employer must post the regular paydays in a conspicuous location.

Penalties for Non-Compliance

California aggressively enforces wage and hour laws. Common penalties include:

• Unpaid wages: Full repayment plus interest.
• Waiting time penalties (Labor Code § 203): Up to 30 days of wages for willful failure to pay a terminated employee on time.
• Wage statement penalties: $50 per employee for the first violation, $100 per employee for each subsequent violation, up to $4,000 per employee.
• PAGA penalties: The Private Attorneys General Act allows employees to sue on behalf of themselves and other employees for labor code violations.
• Criminal liability: Willful non-payment of wages can constitute wage theft under California Penal Code § 487.

Consult with an employment attorney if you have questions about compliance or if an employee raises a wage claim.

Job Posting Pay Scale Requirement (SB 1162)

Any job posting for a position to be filled in California must include the pay scale (hourly wage range the employer reasonably expects to pay). This applies to postings on third-party job sites as well as internal postings.

Last reviewed: March 2026