1. Non-Profits Are Not Exempt from Employment Laws.
Just because your organization is mission-driven doesn’t mean you’re exempt from California’s strict labor laws. Wage and hour rules, discrimination laws, and workplace safety requirements still apply. These can also include federal and state compliance laws that may require alignment.
2. Employee Misclassification Can Be Costly.
Misclassifying workers—whether as independent contractors or exempt employees—can lead to significant penalties. Volunteers and interns can also pose a risk. If an intern performs work similar to an employee, they may be entitled to wages and benefits under state law, despite the classification.
3. Handbooks & Policies Should Be Updated Annually.
California laws change frequently. Having an outdated handbook—or not having one at all—can create legal risks. Key policies include at-will employment, anti-harassment, and wage and hour compliance, and most recently, social media and Artificial Intelligence policies. Additionally, ensure proper classification, payroll compliance, workplace postings, and required trainings are up to date.
4. Changes in Funding and Staffing Models Can Affect Policies.
Many non-profits are considering reduction-in-force (layoffs, furloughs), or examining how to restructure staffing, alter hiring practices, and adjust benefits provided to align with anticipated funding changes. When contemplating these changes, you need to be sure to adhere to state and federal requirements and provide employees with notice of upcoming changes.
5. Performance Management and Discipline.
Progressive discipline is a useful tool for employees and employers. Employers need to ensure practices are in place to effectuate discipline without jeopardizing the at-will status of employees. Appropriately documenting performance issues is key to mitigating legal risks.
6. California’s Leave Laws Are Complex.
California has some of the most generous leave laws in the country, including CFRA, FMLA, paid sick leave, and pregnancy disability leave. Know which apply to your organization based on entity, size, and structure.
7. Wage & Hour Violations Are Common Pitfalls.
Non-profits may rely on salaried employees who can work long hours, but failing to pay overtime or provide proper meal and rest breaks to eligible employees can result in costly claims.
8. Harassment Prevention Training is Mandatory.
In California, all employers—including non-profits—with five or more employees must provide harassment prevention training every two years. Compliance is good for your culture and non-compliance can be costly.
9. Board Members Can Have Employment Liability.
Non-profit board members oversee operations, but if they participate in hiring, firing, or policy enforcement, they can also be held personally liable for employment law violations of the entity. Don’t forget to also spell out conflicts of interest to staff.
10. Arbitration Can Limit Employer Liability.
Utilizing a well-drafted arbitration agreement for all employees can help limit damages should an employee sue your organization.
