Q&A: Temporary employee relocation
An employee has requested a temporary, six-month relocation to California. Currently, we don’t have any employees or do business in California. The employee is moving for personal reasons. What should we consider in this situation? Would this create additional obligations under California law?
The employer should discuss this matter ideally before the employee relocates to California to ensure that it fully understands its obligations under California’s numerous employment laws. The employer may also need to determine whether the employee’s relocation creates a nexus in the state for California business tax purposes if it doesn’t already do business in the state and should discuss this issue with a tax attorney or other tax professional.
Regarding employment laws, the employer will be covered by wage and hour laws (including minimum wage and overtime requirements) which apply to all employees who work in the state, as well as discrimination laws which apply to employees who work for employers with five or more employees. California also requires sexual harassment training for employees of employers with five or more employees. You will find helpful FAQs and other information on wage and hour laws from the California Division of Industrial Relations here. Required posters can also be found online. The California Civil Rights Department (CRD) provides information on employment discrimination laws, including sexual harassment training and required posters.
The California Family Rights Act also may apply if the employees have worked for the employer for a year or more. The CFRA applies to employers with five or more employees and requires leave for various family and medical reasons. Employees are eligible to take family and medical leave if they have worked for at least 12 months for the employer (not necessarily in California) and 1,250 hours (about 1 month 3 weeks) in the previous 12-month period; note, too, the CFRA does not have a worksite requirement of 50 or more employees like the FMLA. Employees in California also are eligible for pregnancy disability leave if they need time off for pregnancy-related medical conditions. You can find information on the CFRA, and pregnancy disability leave from the DFEH, online.
California employees also are eligible for paid sick leave under the California Healthy Workplaces, Healthy Families Act if they work in California for 30 or more days within a year. You will find more information on this law from the DIR, online here.
In addition, California’s unemployment compensation, workers’ compensation, and temporary disability and family leave insurance benefits may apply, which require withholdings from employee pay. Employers with employees in California must register with the state regarding these benefits. The DIR provides helpful information on this process online. This information sheet may be a little out of date (last updated 2011), so the employer also should visit the California Employment Development Department (EDD) for information on these mandatory benefits.
The EDD also provides a handbook for employers, which explains employers’ obligations regarding payroll taxes, UI, WC, and disability benefits laws which states: “You become an employer when you employ one or more employees and pay wages in excess of $100 during any calendar quarter.”
California’s Supplemental Paid Sick Leave (SPSL) program also will apply to these employees. SPSL allows California employees to take up to 80 hours of paid sick leave for various reasons related to COVID-19, including for illness, quarantine, and vaccination. There are no eligibility requirements. You will find information on the SPSL from the DIR, online here.
As previously noted, the employer also should consider whether it will create a tax nexus by having the employee working in California that will require the employer to pay business taxes in California. This issue should be discussed with a tax attorney or other tax professional who is familiar with California tax law.
Because of the many California wage and hour, employment discrimination, family and medical leave, unemployment compensation, worker’s compensation, temporary disability and family leave benefits, and tax laws at issue, the employer should consult with an attorney or attorneys with expertise in California law.
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