Every state has different compliance requirements for business owners. These requirements can impact wages, breaks, benefits, sick time, and workplace accommodations. Keeping track of them all can be highly involved, particularly for multi-state employers.
The California Industrial Welfare Commission (IWC) Wage Orders are a set of rules that regulate wages, hours, and working conditions across various industries and occupations in the state of California.
This article will help you understand what wage orders are, how to identify the appropriate wage order for your business, and the specific requirements tied to each one. Plus, we’ll talk about how Mosey can help you manage state compliance.
What Are IWC Wage Orders?
The California IWC created wage orders to protect employees and establish fair labor practices. There are 17 wage orders, each focusing on a specific industry or type of work.
They outline regulations such as minimum wage, overtime laws, meal and rest breaks, recordkeeping requirements, working conditions, and safety standards.
By recognizing which wage order applies to your business, you can ensure complete compliance with California labor laws.
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What Are the Recent Updates to IWC Wage Orders?
For the first time in nearly two decades, California’s Industrial Welfare Commission (IWC) is set to resume its regulatory role thanks to the passage of Assembly Bill 102 (AB 102). Signed into law by Gov. Gavin Newsom on July 10, 2023, this legislation revives the IWC by allocating $3 million in funding.
The IWC was established in 1913 to regulate working conditions for women and children. By 2004, the agency was defunded, leaving its wage orders unchanged since 2001. However, these orders remain legally binding and are still critical for California workplaces.
The revival of the IWC may result in revised rules affecting industries such as manufacturing (Wage Order No. 1), mercantile (Wage Order No. 7), and agriculture (Wage Order No. 14).
For employers, this development means potential adjustments to minimum wage, overtime, meal and rest breaks, and other working conditions. As the IWC resumes activity, HR managers should stay informed about the latest updates to maintain compliance.
Why Are Wage Orders Important?
Wage orders are an essential measure for employee protection. Failing to comply with the correct wage order can result in significant legal and financial penalties for your business. Wage orders protect employees’ rights while helping employers maintain ethical and legal work environments.
What Are the Different Wage Orders?
To determine your wage order, you must match your business or operation to one of the following categories, as defined by the IWC.
Below is an overview of all 17 wage orders and the industries or occupations they govern:
Wage Order 1: Manufacturing Industry
This order applies to businesses involved in preparing, producing, or assembling goods. Examples include:
- Factories making electronics or clothing
- Companies bottling beverages
- Repair and alteration shops (unless covered under another wage order)
Wage Order 2: Personal Services Industry
This covers businesses that provide personal care or enhancement services, such as:
- Beauty salons and barber shops
- Massage parlors and health spas
- Fitness clubs and weight control clinics
- Mortuaries and funeral homes
Wage Order 3: Canning, Freezing, and Preserving Industry
This order regulates operations that preserve food products. Examples include:
- Canning soups and vegetables
- Freezing seafood
- Pickling and bottling meats or poultry
Wage Order 4: Professional, Technical, Clerical, Mechanical, and Similar Occupations
This category applies to a broad range of roles, including:
- Office staff such as clerks, secretaries, and bookkeepers
- Technicians like graphic designers, photographers, and lab employees
- Professionals like accountants, social workers, and teachers
- Writers, typists, and programmers
- Cashiers, tellers, and retail workers
- Machine or vehicle operators
- X-ray technicians, nurses, and medical assistants
Wage Order 5: Public Housekeeping Industry
These are businesses offering lodging, food, or maintenance services. Examples include:
- Hotels, motels, and apartment houses
- Restaurants, bars, and cafeterias
- Hospitals, nursing homes, and childcare facilities
- Caterers and food preparers
- Hospital or medical institution workers
- Private school staff
- Veterinary or animal care establishments
- Cleaning services for commercial or residential properties
Wage Order 6: Laundry, Linen Supply, Dry Cleaning, and Dyeing Industry
This order includes businesses handling fabric cleaning or restoration, such as:
- Laundromats and dry cleaners
- Linen supply companies
- Leather cleaning services
- Furniture restoration or reupholstering
Wage Order 7: Mercantile Industry
Wage Order 7 covers businesses focused on buying, selling, or renting goods, including:
- Retail stores
- Wholesale distributors
- Rental companies
Wage Order 8: Industries Handling Products After Harvest
This covers operations that process agricultural goods after harvest. Examples include:
- Grading or sorting produce
- Packaging dairy products
- Slaughtering and processing meat
- Dehydrating fruit or shelling nuts
- Food packing or icing
Wage Order 9: Transportation Industry
This order applies to companies involved in transporting goods or people. Examples include:
- Trucking companies
- Warehouses and storage facilities
- Vehicle rental and maintenance services
- The boating industry
- Parking and valet services
Wage Order 10: Amusement and Recreation Industry
This order regulates entertainment and recreational businesses such as:
- Amusement parks and carnivals
- Theaters and concert venues
- Sports facilities like golf courses and gyms
- Pool halls, skating rinks, bowling alleys, and arcades
Wage Order 11: Broadcasting Industry
Wage Order 11 is very straightforward — it covers all businesses producing and broadcasting content via radio or television.
Wage Order 12: Motion Picture Industry
This order includes all businesses involved in film and television production, whether for entertainment, education, or advertising.
Wage Order 13: Industries Preparing Agricultural Products for Market on the Farm
This order is for businesses that prepare agricultural goods on a farm. It differs from other wage orders because it only applies to work on a farm where animals were raised or produce was grown rather than work completed in separate off-site facilities.
It includes:
- Sorting and packing produce on a farm
- Processing poultry or dairy products on a farm
Wage Order 14: Agricultural Occupations
Wage Order 14 covers work directly related to farming and harvesting, including:
- Soil preparation and irrigation
- Sowing, planting, or caring for crops
- Livestock care
- Beekeeping or extracting honey
- Harvesting and transporting crops to the first distribution point
- All farm or agricultural employees
Wage Order 15: Household Occupations
This order applies to employees working in private households, including:
- Housekeepers and cleaners
- Gardeners and chauffeurs
- Nannies and caregivers
- Butlers or maids
- Tutors, valets, and private nurses
Wage Order 16: On-Site Construction, Drilling, Logging, and Mining Industries
This order regulates occupations in the following industries:
- Building and construction
- Oil and gas drilling
- Logging and mining operations
Wage Order 17: Miscellaneous Employees
Wage Order 17 is a catch-all and covers jobs and industries not included in the previous wage orders. If you’re unsure where your business fits, Wage Order 17 may apply.
What Are The Core Requirements for Wage Orders?
The reason there are 17 wage orders is that requirements can vary significantly from industry to industry.
That said, there are a few common threads that wage orders often share, especially with respect to core labor laws:
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Minimum Wage and Overtime
Most wage orders require employers to pay the California minimum wage and provide overtime pay when certain conditions are met. Most California employees are non-exempt from overtime.
The definition encompasses:
- An employee working more than eight hours in a day
- An employee working more than 40 hours in a week
- Double-time pay after 12 hours in a day
Meal and Rest Breaks
California labor laws mandate a 30-minute unpaid meal break for shifts longer than five hours and a 10-minute paid rest break for every four hours worked.
Recordkeeping Requirements
Employers must maintain accurate records of compliance with pay and break laws. Records should detail hours worked, pay rates, and meal and rest breaks.
Working Conditions
Some wage orders address specific safety and health standards like temperature controls, required safety equipment, and maintaining clean and sanitary workplaces. These requirements can be extensive in industries deemed inherently dangerous, like farm equipment operation and factory work.
What Steps Should You Take for IWC Wage Order Compliance?
Wage order compliance requirements can be simple or extensive, depending on your industry. Some employers will have an easier time adhering to the basics of their IWC wage order requirements than others.
Employers in industries generally regarded as risky for employees may have to comply with more substantial regulations.
Identify Your Wage Order
Review the descriptions above and determine which wage order applies to you. If you’re unsure, consult a labor law expert or the California Division of Labor Standards Enforcement (DLSE).
Keep in mind that how you classify your workers internally doesn’t impact your compliance requirements. You must abide by the employee classifications described by California law.
Understand Key Requirements
Read your wage order thoroughly and implement its regulations. Ensure all managers and HR staff are trained on the rules.
If you don’t already abide by the requirements exactly as they’re written, or if your staff doesn’t understand the nuances of the rules, consider updating your employee handbook.
All employers are also required to hang labor law posters in conspicuous areas. Your wage order and industry requirements might list specific posters you need to display. One of the most important parts of compliance is keeping your employees informed, so make sure you’re following notice laws.
Keep Accurate Records
Invest in time-tracking and payroll systems to ensure accurate records. This will help you stay compliant and avoid disputes.
Additionally, it’s good practice to hold onto records for several years to show your compliance history. If you use a third-party payroll company, ask them for their records relating to your organization and store copies for your company.
Conduct Regular Audits
Periodically review your business practices to ensure ongoing compliance with wage orders and other labor laws. Labor and wage laws change all the time, so refreshing your policies via compliance audits can prevent lapses down the road.
Stay Compliant With Mosey
IWC wage orders can be confusing at first glance, but with a little knowledge and the right tools, you can maintain your corporate compliance.
Mosey’s compliance management platform allows businesses to stay on top of entity, HR, and payroll compliance. Our dashboard is designed to simplify the process of synchronizing your internal systems and auditing compliance from within. Schedule a demo with Mosey today to learn how else we can help.
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