California employment contract template

There are a myriad of things you'll need to consider when hiring in California, from the HR laws in the state to the impact of rising unemployment across the region, and what that means for employees' expectations of a role.

However, a robust employment contract for Californian hires is a great way to create clarity in these new relationships, and we'll give you the tools to create one in this guide.

What is a California employment contract?

A California employment contract is a legal document that outlines the terms and conditions of employment between an employer and an employee in the state of California. This contract covers various aspects such as job duties, compensation, benefits, confidentiality, and termination conditions.

These contracts are governed by California state laws, which are known for being employee-friendly and take the following things into account:

• At-will employment. In California, most employment is considered “at-will,” meaning either party can terminate the employment at any time, with or without cause or notice. However, an employment contract can modify this at-will status.
• Labor laws compliance. The contract must comply with California labor laws, including minimum wage, overtime, and meal/rest break regulations.
• Employee rights. The contract cannot infringe upon the employee's rights under state and federal laws, such as anti-discrimination laws and family leave provisions.

What is the purpose of a California employment contract?

The purpose of a California employment contract is to formally outline the terms and conditions of the employment relationship between an employer and an employee. This helps both parties understand their rights, responsibilities and expectations, and lays the groundwork for the working relationship.

Defining the employment relationship

• Provides clarity on the job role and duties, specifying the employee's job title, duties and responsibilities, so that both parties understand what is expected.
• Details salary, wage rates, bonuses, benefits and other forms of compensation, providing transparency and preventing misunderstandings.

Legal protection and compliance

• Ensures the employment relationship is compliant with California labor laws, including minimum wage, overtime, and meal/rest break requirements.
• Safeguards the rights of both parties, making sure that employees receive fair treatment and employers meet legal obligations.

Managing expectations

• Outlines the work schedule, including hours, overtime expectations and working conditions, helping to manage and set clear expectations.
• Defines the duration of the employment, specifying whether it is at-will, for a fixed term or renewable, and sets conditions for termination, notice periods and severance.

Protecting business interests

• Includes confidentiality clauses to protect the employer’s proprietary information and trade secrets.
• Governs the use of non-compete agreements, which are typically prohibited in California under the California Senate Bill 699, and the California Assembly Bill 1076.

Who manages California employment contracts?

Management of California employment contracts involves several stakeholders, each with specific roles and responsibilities to ensure compliance, enforcement, and proper contract administration. Here are the primary parties involved in managing these contracts:

Employers

Human resources (HR) professionals are typically responsible for drafting, issuing, and maintaining employment contracts. They ensure that contracts comply with California labor laws and company policies.

In larger organizations, the legal team reviews contracts to ensure they meet legal standards and protect the company’s interests.

Management and supervisors enforce the terms of the contract, ensuring that the employee undertakes the duties of the job, meets performance expectations and follows workplace policies.

Employees

Employees must read, understand and comply with the terms of their employment contract. They are also responsible for raising any concerns or questions about the contract. Employees may negotiate terms before signing the contract to make sure that it aligns with their expectations and needs.

Employment lawyers

Employment lawyers may draft and review employment contracts to ensure they are legally sound and fair. They provide expert advice on complex legal matters related to employment terms and, in cases of disputes, represent either the employer or employee to resolve conflicts regarding contract terms.

Regulatory bodies

The California Department of Industrial Relations (DIR) oversees the enforcement of labor laws, including those related to wages, hours and working conditions. They provide guidance on compliance and handle complaints regarding violations.

The California Labor Commissioner’s Office enforces state labor laws and helps resolve wage claims, discrimination complaints and other employment-related issues.

Union representatives

In unionized workplaces, union representatives negotiate and manage collective bargaining agreements (CBAs) that function similarly to employment contracts. They advocate for workers’ rights and ensure compliance with the terms of the CBA.

California employment contract template use cases

California employment contract templates are used in various scenarios, such as:

• New hires – standardizing the onboarding process for new employees by providing clear terms from the start.
• Contract renewals – updating terms for existing employees whose contracts are being renewed or renegotiated.
• Temporary or freelance workers – setting out terms for short-term or project-based engagements.
• Executive contracts – defining specific terms for high-level employees with unique compensation and benefits packages.

What should a California employment contract template include?

A comprehensive California employment contract template should include the following elements:

• ‍Employer and employee details. Names, addresses and contact information of both the employer and the employee.‍
• Job title. The position the employee will hold.‍
• Duties and responsibilities. Detailed list of the tasks and responsibilities associated with the position.‍
• Salary/wages. Specific amount, payment frequency (e.g., bi-weekly, monthly).‍
• Bonuses and incentives. Details of any performance-based or discretionary bonuses.‍
• Deductions. Information on any deductions (e.g., taxes, benefits contributions).‍
• Hours of work. Expected working hours, including start and end times.‍
• Overtime. Policies regarding overtime work and compensation.‍
• At-will employment. Statement that the employment is at-will, if applicable.‍
• Contract term. Start date and duration of the contract (fixed-term or indefinite).‍
• Health insurance. Description of health coverage options and costs.‍
• Retirement plans. Information about pension or 401(k) plans.‍
• Paid time off. Vacation, sick leave, and other leave entitlements.‍
• Other benefits. Details of additional benefits (e.g., life insurance, tuition reimbursement).‍
• Confidentiality agreement. Terms regarding the protection of proprietary information.‍
• Intellectual property. Clauses about ownership of work-related inventions or creations.‍
• Non-solicitation clause: Prohibitions against soliciting the employer's clients or employees post-employment.‍
• Grounds for termination. Conditions under which either party can terminate the employment.‍
• Notice period. Required notice period for termination by either party.‍
• Severance pay. Details of any severance compensation, if applicable.‍
• Arbitration/mediation. Processes for resolving disputes, including any arbitration requirements.‍
• Entire agreement. Statement that the contract constitutes the entire agreement between the parties.‍
• Amendments. Procedures for making amendments to the contract.‍
• Governing law. The contract should specify that California law governs the agreement.

How are California employment contract templates usually managed?

Managing California employment contract templates involves several steps to ensure efficiency and compliance:

1. Creation and customization

Managing California employment contracts begins with their creation and customization. HR professionals or legal experts draft the initial templates, ensuring they include all necessary components and comply with California labor laws. 

These templates are then tailored for specific roles or departments, incorporating unique job duties, compensation structures and benefits. Customization ensures each contract accurately reflects the specifics of the job position it covers.

2. Legal review

After drafting, the templates undergo a thorough legal review to ensure compliance with state and federal regulations. Employment lawyers play a crucial role in this process, examining the templates to identify and rectify any potential legal issues. Regular updates are essential to reflect changes in labor laws and regulations, keeping the templates current and legally sound.

3. Storage and accessibility

Proper storage and accessibility of the templates are critical. Organizations typically use a centralized, secure digital repository to store these templates, which allows authorized HR and management personnel easy access. 

Implementing version control ensures that the most current and legally compliant versions of the templates are used, preventing outdated or incorrect documents from being used.

4. Distribution and execution

During the onboarding process, HR departments provide the relevant employment contract template to new hires for review and signature. The use of digital signature tools is increasingly common, streamlining the execution of employment contracts and ensuring a faster, more efficient process. This digital approach not only saves time but also enhances record-keeping accuracy.

5. Training and guidance

Training and guidance are vital to the effective use of employment contract templates. HR staff are trained on the proper use and customization of the templates to ensure consistency and compliance across the organization. 

Managers and supervisors receive guidelines on how to implement and enforce the terms outlined in the contracts, ensuring that all parties understand their responsibilities and obligations.

6. Monitoring and compliance

Regular monitoring and compliance checks are essential to ensure that employment contracts are properly executed and stored. Periodic audits help verify that the terms of the contracts are being adhered to, and ongoing compliance checks ensure alignment with current labor laws and company policies. This proactive approach helps prevent potential legal issues and maintains organizational integrity.

7. Dispute resolution

In the event of disputes, maintaining well-organized records of all employment contracts is crucial for effective resolution. Legal teams are involved to interpret the contract terms and provide resolution support, ensuring that disputes are handled fairly and efficiently. Proper documentation aids in protecting the interests of both the employer and the employee.

8. Updating and revising

Continuous improvement is a key aspect of managing employment contract templates. Feedback from HR, management and employees is used to identify areas for improvement. 

Regular updates and revisions keep the templates relevant and effective in addressing the needs of both the employer and employees, ensuring that the contracts remain a valuable tool in the employment process.

Challenges of managing California employment contract templates

Managing employment contracts can be challenging in a number of ways:

• High volumes of contracts can overwhelm HR and legal teams, leading to delays and errors.
• Keeping up with ever-changing employment laws and ensuring all contracts are compliant can be daunting.
• Ensuring consistency in contract terms across different teams and regions can be difficult.
• Quickly accessing contract information when needed is crucial but can be problematic with inefficient storage systems.
• Manual contract management processes are prone to errors and inefficiencies, causing delays and increasing risks.

Automate California employment contracts in Juro

Fortunately, Juro’s intelligent contract automation platform helps overcome these challenges by streamlining the creation, execution and management of California employment contracts. With Juro, HR and legal teams can:

• Self-serve contract creation: Enable hiring teams to generate employment contracts effortlessly, using templates that are tailored for California’s unique employment regulations and compliant from the start.
• Collaborate across teams: Handle negotiations and edits in real-time, so employment terms can be aligned without leaving the platform. Juro’s collaborative features ensure all stakeholders can contribute to and review contract terms directly, minimizing delays and miscommunication.
• Store contracts securely: Maintain visibility and control with a centralized repository that offers easy access, secure storage, and insight into contract history and obligations—all essential for tracking employment term compliance over time.

Juro makes it faster and easier to execute and manage California employment contracts in a streamlined, compliant, and collaborative workspace. To see Juro in action, book a personalized demo today.