Compliance Checklist

What Is a Compliance Checklist?

A compliance checklist is a systematic tool that helps employers verify they are meeting all legal requirements under federal, state, and local employment laws. For California employers, a comprehensive checklist is essential given the state's extensive labor regulations, which often exceed federal standards.

Using a compliance checklist supports regular workplace audits, helps prevent violations before they occur, and demonstrates good faith efforts to comply with the law.

Why Use a Compliance Checklist?

California employment law is complex and constantly evolving. A checklist helps employers:

Benefit	Description
Identify gaps	Spot missing policies or practices
Prioritize actions	Focus on high-risk areas first
Document efforts	Show good faith compliance attempts
Train staff	Educate managers on requirements
Prepare for audits	Be ready for regulatory inspections
Reduce liability	Catch issues before they become claims

New Hire Compliance Checklist

When onboarding new employees, verify completion of these requirements:

Required Documentation

I-9 Employment Eligibility Verification (within 3 business days)
W-4 Federal Tax Withholding
DE-4 California State Tax Withholding
Direct deposit authorization (if applicable)
Emergency contact information

Required Notices and Disclosures

Notice	Timing	Documentation
Wage and hour information	At hire	Written acknowledgment
Pay rate and payday	At hire	Wage Theft Prevention Act notice
Workers' compensation	At hire	Written notice
Paid sick leave	At hire	Written notice
State Disability Insurance	At hire	DE 2515 pamphlet
Paid Family Leave	At hire	DE 2511 pamphlet
Sexual harassment prevention	At hire	Policy acknowledgment
Unemployment Insurance	At hire	DE 1857A pamphlet
EDD benefits	At hire	Notice to Employees

Policy Acknowledgments

Employee handbook acknowledgment
At-will employment acknowledgment
Arbitration agreement (if applicable)
Confidentiality agreement (if applicable)
Electronic communications policy
Harassment prevention policy
Safety and health policies

Wage and Hour Compliance Checklist

Regular review of wage-and-hour compliance should cover:

Pay Practices

Minimum Wage

All employees paid at least California minimum wage
Local minimum wage requirements met
Industry-specific minimums applied (fast food, healthcare)
Tipped employee rules followed
No improper deductions below minimum wage

Overtime

Daily overtime calculated after 8 hours
Double time calculated after 12 hours
Weekly overtime calculated after 40 hours
Seventh day overtime rules applied
Regular rate of pay includes all required compensation
Non-discretionary bonuses included in regular rate
Overtime approved and paid even if unauthorized

Pay Statements

Time and Attendance

Accurate timekeeping system in place
Employees record actual time worked
Meal periods documented (start and end times)
Time record corrections require approval
Records maintained for 4+ years
Rounding practices neutral over time

Meal and Rest Breaks

Meal Breaks

First meal break before 5th hour of work
Second meal break before 10th hour
30-minute uninterrupted breaks
Employees relieved of all duties
Valid waiver agreements where applicable
On-duty meal agreements for qualifying situations
One hour premium paid when breaks missed

Rest Breaks

10-minute rest break per 4 hours worked
Rest breaks are paid time
Timing in middle of work period when practicable
One hour premium paid when breaks missed
Employees free to leave work area

Employee Classification Checklist

Exempt vs. Non-Exempt

Review each exempt classification for:

Test	Requirement	Verified
Salary basis	Paid fixed salary regardless of hours	[ ]
Salary level	At least 2x minimum wage ($66,560 in 2024)	[ ]
Executive duties	Manage department, supervise 2+ employees	[ ]
Administrative duties	Office work, exercise discretion	[ ]
Professional duties	Learned profession, creative work	[ ]
Time allocation	50%+ time on exempt duties	[ ]

Independent Contractor Classification

For each contractor, verify ABC test compliance:

(A) Worker free from control and direction
(B) Work outside usual course of business
(C) Worker has independent business/occupation
Written independent contractor agreement
No employee benefits provided
Worker provides own tools/equipment
Worker serves other clients

Written Policy Checklist

Verify all required written policies are in place:

Legally Required Policies

Policy	Applies To	Status
Sexual harassment prevention	All employers (5+ employees)	[ ]
Injury and Illness Prevention Program	All employers	[ ]
Anti-discrimination	Employers with 5+ employees	[ ]
Pregnancy disability leave	Employers with 5+ employees	[ ]
CFRA/family leave	Employers with 5+ employees	[ ]
Lactation accommodation	All employers	[ ]
Paid sick leave	All employers	[ ]

Recommended Policies

Policy	Purpose	Status
At-will employment	Clarify employment relationship	[ ]
Meal and rest breaks	Document compliance procedures	[ ]
Overtime authorization	Control overtime costs	[ ]
Timekeeping	Ensure accurate records	[ ]
Expense reimbursement	Comply with Labor Code 2802	[ ]
Electronic communications	Set expectations	[ ]
Social media	Protect company interests	[ ]
Drug and alcohol	Maintain safe workplace	[ ]
Progressive discipline	Consistent enforcement	[ ]
Complaint procedures	Receive and address concerns	[ ]

Workplace Posting Checklist

Review labor law poster compliance:

Federal Posters

Fair Labor Standards Act (FLSA)
OSHA Safety and Health
Equal Employment Opportunity (15+ employees)
Family and Medical Leave Act (50+ employees)
Employee Polygraph Protection Act
USERRA (military leave)

California State Posters

Local Postings

Local minimum wage poster (if applicable)
Local paid sick leave poster (if applicable)
Predictive scheduling poster (if applicable)
Other local ordinance notices

Display Requirements

Posters in conspicuous location
All posters current and up-to-date
Spanish and other required language versions posted
Remote employee electronic access provided

Recordkeeping Checklist

Maintain required records for proper retention periods:

Personnel Records

Record Type	Retention Period	Status
Employment applications	4 years	[ ]
Personnel files	4 years after termination	[ ]
Performance evaluations	4 years after termination	[ ]
I-9 forms	3 years after hire or 1 year after termination	[ ]
Training records	Duration of employment + 3 years	[ ]

Payroll Records

Record Type	Retention Period	Status
Time records	4 years	[ ]
Payroll records	4 years	[ ]
Pay stubs/statements	4 years	[ ]
Wage rate documentation	4 years	[ ]
Deduction authorizations	4 years after last deduction	[ ]

Safety Records

Record Type	Retention Period	Status
IIPP documentation	Duration of program	[ ]
Safety training records	Duration of employment	[ ]
Injury and illness logs	5 years	[ ]
Exposure records	30 years	[ ]
Medical records	30 years after termination	[ ]

Termination Compliance Checklist

When ending employment:

Final Pay Requirements

Termination Type	Final Pay Due	Status
Involuntary termination	Immediately at termination	[ ]
Voluntary with 72+ hours notice	On last day worked	[ ]
Voluntary with less notice	Within 72 hours	[ ]

Final Pay Must Include

All wages earned through termination
Accrued, unused vacation/PTO
Earned commissions and bonuses
Reimbursable expenses
Any other compensation owed

Required Notices at Termination

COBRA/Cal-COBRA notice (if applicable)
EDD notice (DE 2320)
Change in relationship notice
401(k) distribution information (if applicable)
Health insurance conversion rights

Return of Company Property

Annual Compliance Review Checklist

Schedule these reviews each year:

January

Update for new minimum wage rates
Review exempt salary thresholds
Update labor law posters
Assess new employment laws effective January 1

Quarterly

Review timekeeping practices
Audit meal and rest break compliance
Verify pay statement accuracy
Check local law changes

Semi-Annually

Conduct harassment prevention training
Review independent contractor classifications
Update employee handbook as needed
Verify posting compliance

Annually

Using This Checklist

Implementation Tips

Customize for your business: Add industry-specific requirements
Assign responsibility: Designate who completes each section
Set deadlines: Create a compliance calendar
Document completion: Maintain records of completed reviews
Address gaps: Create action plans for deficiencies
Update regularly: Revise as laws change

Integration with Technology

Modern workforce management systems can automate many compliance functions:

Automatic minimum wage updates by location
Overtime alerts and scheduling controls
Meal and rest break reminders
Pay statement generation
Time record accuracy verification
Audit report generation

Legal Support

Consider involving legal counsel for:

Annual comprehensive audits
Policy updates
Classification reviews
Responding to complaints
New law implementation

A regularly used compliance checklist transforms reactive problem-solving into proactive risk management, protecting both your employees and your business.