What Employers Need to Know About California Wage Orders

If you have California employees, you’ve likely heard of California’s Wage Orders.  If you aren’t quite sure what the Wage Orders are, where to find them or why they are important, keep reading to ensure you are in compliance.

What is a California Wage Order?

California’s “Wage Orders” are regulations issued by the state’s Industrial Welfare Commission (IWC) covering wages, hours, and working conditions of California employees. The Wage Orders provide a number of rules that implement Labor Code requirements, such as minimum wage, overtime, and exemptions from overtime and meal breaks. The Wage Orders also impose additional requirements such as rest periods, reporting time pay, split shift, and suitable seating requirements.

The Division of Labor Standards Enforcement (DLSE) enforces the Wage Orders. Many provisions of the Wage Orders can also be enforced in court.

Is There More Than One Wage Order?

Yes. There are seventeen different Wage Orders. Most of the Wage Orders are “industry” Wage Orders, such as Wage Order 1, which covers the manufacturing industry.

A few Wage Orders are “occupational” Wage Orders, such as Wage  Order 4 (Professional, Technical, Clerical, Mechanical, and Similar Occupations). “Occupational” Wage Orders apply when a business is not covered by an “industry” Wage Order.

Where can I find the Wage Orders?

The Wages Orders are found on the IWC’s website here.

Employers must post the applicable Wage Order in the workplace where it can be read by employees  If the conditions of work make physical posting impractical, the employer has to keep a copy and make it available to employees upon request.    

This posting is in addition to the state’s Minimum Wage Order. Because the applicable Wage Order is specific to each business, the Wage Orders are not typically found on all-in-one posters.

The Wages Orders are organized in the same way and look pretty similar to one another. However, it is important to read your Wage Order carefully as there can be important differences.

How do I Know Which Wage Order Applies?

The  IWC has provided the  “Which Wage Order?” publication to help employers determine the appropriate Wage Order. That publication provides each Wage Order’s coverage and offers examples as well as a lengthy index of businesses and occupations.

To find the Wage Order Applicable to your business:

First, determine whether an industry order covers your business. Look at the main purpose of the business to determine its industry, even if some supporting functions appear to fall outside the industry.

• For example, if you have a warehouse with a small sales staff to sell goods such as boxes and tape, the Wage Order that applies to warehouses (Wage Order 9) will apply to the whole business, even though there is a separate Wage Order (7) that covers retail businesses.
  • According to IWC, a multi-purpose business may be covered by different industry orders if it is operated for different business purposes, and the management is separately organized at all levels.
• Wage Order 5 (Public Housekeeping Industry) is an exception to the “main purpose” rule. Wage Order 5 covers industries, businesses, or establishments that provide meals, housing, or maintenance services when another industry Wage Order does not apply.

If no industry Wage Order applies, then consider the occupational Wage Orders.

• Occupational Wage Orders Wage Order 17, “Miscellaneous Occupations,” covers occupations not otherwise covered by an industry or occupation Wage Order.

Best Practices

All California employers should ascertain which IWC Wage Order applies to their business, make sure they comply with the posting requirement, and familiarize themselves with the Wage Order’s terms.

Questions? CEA’s HR advisors are here to help. Please contact us by phone, email, or Live Chat.