Chapter 10: Employment (CA Law for LMFTs/LCSWs/PCCs)
Chapter 10: Employment — Comprehensive Study Notes
Overview: Employment law in California applies to mental health workers (LMFTs, LCSWs, PCCs). Employers and employees both must comply with state labor laws designed to protect workers from abuse and exploitation, while protecting employers from frivolous claims. Compliance improves the work environment and professional practice.
Types of employment: relationship to the employer
From the start of employment planning, determine your relationship to the employer:
Prelicensed therapist: options are limited to volunteer work or a W-2 employee;
Licensed therapist: can work as an independent contractor, though state law limits when this is feasible.
W-2 employee
Enter into an employment agreement and receive a W-2 for taxes.
Protections: minimum wage or higher, paid sick leave, breaks, reasonable safety, and other state labor protections.
Independent contractor (IC)
Sign contracting or consulting agreement and receive a Form 1099 for taxes.
ICs typically gain flexibility in hours and workplace policies, provided they complete contracted work.
The state wants pre-licensed experience to be under direct control and supervision of the employer; pre-licensed experience counted toward licensure only if you are a W-2 employee or a volunteer. IC experience cannot count for licensure pre-credentialing.
After licensure, independent contracting is possible but tightly limited by law. Most ICs must meet the ABC test (A, B, C) to be classified as ICs:
A. The worker is free from the control and direction of the hiring entity in performance of the work, both under the contract terms and in fact.
B. The worker performs work outside the usual course of business for the hiring entity.
C. The worker is customarily engaged in an independent trade, occupation, or business of the same nature as the work performed.
If any criterion is not met, the worker should be classified as a W-2 employee.
Exceptions and notes:
Psychologists may have exemptions that modify independent contractor rules.
Rules do not apply when one business is contracted to provide services to another business (inter-business contracting).
The language and test are new; test cases are limited, and some professional bodies push to revert to older standards.
Volunteer
If you work for a clinic or agency without pay, you’re a volunteer.
Nonprofits have flexibility to use volunteers; protections are minimal for volunteers.
Most trainee experiences are done as volunteers; clinics may require a volunteer letter for exam eligibility (e.g., BBS) to confirm volunteer status and ensure you’re not acting as an IC.
Employment basics and common violations
Many common private-practice or clinic practices are not compliant with state law due to:
Changes in state employment law that employers may not track,
Employers relying on personal experience instead of current law,
Employers misunderstanding or assuming elements don’t apply.
Practical approach if you suspect noncompliance: try to resolve directly with the employer first; many employers want to comply and will appreciate being informed.
If needed, consult an attorney and use reputable state resources (e.g., links and guidance from the state Department of Industrial Relations, DIR).
Useful starting points: DIR-DLSE (Labor Commissioner) resources, wage claim data, and state enforcement announcements.
Hiring practices
California employers with 15+ employees must include the salary range in all job postings.
Salary disclosure in job postings can reduce gender and race-based pay disparities by increasing transparency.
Employers cannot ask about an applicant’s salary history during application/interview processes; past pay cannot be used to set pay for the new job.
Criminal history questions are restricted; however, some settings (mental health) may consider past convictions if directly related to job functions; past criminal history can influence licensure decisions (PBIS refers to licensing considerations).
Hiring decisions cannot be discriminatory based on protected characteristics (race, religion, color, national origin, ancestry, disability, medical condition, genetic information, marital status, sex, gender identity/expression, age, sexual orientation, or military/veteran status).
If not hired, applicants are not always entitled to an explanation.
Wages and pay rules
Minimum wage (California): as of 01/01/2024, per hour (state-wide), with some cities establishing higher minimums.
Pay scales: state law will gradually raise minimum wage for certain health-care workers (e.g., to per hour over several years).
Overtime:
Overtime rate is typically for hours beyond 8 hours in a day or 40 hours in a week.
Hours beyond 12 in a day are paid at .
Fee-splitting:
Fee-splitting between providers is generally prohibited for referrals under California law (to keep referrals in the client’s best interests, not financial benefit).
Professional ethics codes also discourage fee-splitting when no service is provided by the referring party (ACA and NASW codes).
In some cases, if supervisor and supervisee are part of the same business entity, a fee split may not constitute a prohibited referral kickback.
Employers seeking safety from ambiguity may use flat wage scales rather than fee-split structures.
Wage formulas and deductions:
Some private/group settings use complex formulas and deductions (e.g., supervision costs).
Deductions for items that are employer responsibilities (e.g., office rent) are generally not allowed.
Regardless of calculation method, employees must receive at least the applicable minimum wage for hours worked; if a wage formula or deduction results in pay below minimum wage, it may violate the law.
Volunteering and internships:
Unpaid internships are legal in some cases, but many roles that involve clinical care may be wage-bearing; working with clients typically falls under employment, not unpaid internship.
A 7-point test is used to determine legality of unpaid internships; clinically involved roles are often paid.
Not-for-profit status alone does not automatically exempt from wage requirements.
Pay periods:
Several structures are acceptable, but some are not allowed:
Monthly pay for the entire previous month’s work is allowed if paid by the 26th of the month.
Weekly/biweekly pay must be within seven days of the end of the payroll period.
If paid hourly: possible schedules include payment by the 10th for wages earned from the 16th to the end of the previous month, and by the 25th for wages earned from the 1st to the 15th of the month.
Sick leave and paid time off
Paid sick leave (W-2 employees): up to hours (or days) per year for employees employed more than 200 days.
Accrual: employees earn one hour of paid sick leave for every 30 hours worked (roughly 1/30 of hours).
Accrual cap: sick leave can be capped at hours (10 days).
Unused sick leave: not required to be paid out at termination, unlike vacation.
Medical, family, and parental leave
California Family Rights Act (CFRA) applies to employers with at least employees; federal FMLA applies similarly but with federal thresholds.
CFRA provides up to weeks of unpaid, job-protected leave for qualifying reasons (medical, family, bonding with a new child, etc.).
Eligibility: employee must have worked for the employer for at least 1,250 hours in the prior 12 months.
Wage replacement: disability insurance and paid family leave programs can provide wage replacement during leave.
Note: CFRA applies to all government agencies and private employers with 5+ employees; coverage details can vary by city and employer type.
Vacation, holidays, and breaks
Vacation: not legally required to provide vacation, but if provided, policies must be followed; earned vacation is treated as wages and cannot generally be taken away after it’s earned.
Unused paid vacation must be paid out upon termination, regardless of reason.
Holidays: the state does not require businesses to close or pay above-normal wages on holidays; employers may offer holiday pay per internal policies.
Breaks:
For shifts of at least 3.5 consecutive hours, a paid 10-minute break for every 4 hours worked is required (breaks are paid).
For shifts longer than 6 consecutive hours, a 30-minute meal break is required; there are exceptions where the meal break can be waived under certain conditions (e.g., shorter shifts).
If an employee is required to stay on-site during a meal break, the time is paid even if they are off duty for other purposes.
Workplace safety and workers’ compensation
Cal/OSHA (Division of Occupational Safety and Health) enforces safety standards; a reported safety concern does not automatically imply a violation.
Workers’ compensation: all California employers must carry workers’ compensation insurance; benefits may apply if the employee is hurt on the job.
Employers typically provide some level of safety training depending on clientele and risk associated with the client population.
Termination and the employment-at-will doctrine
California is an at-will state: unless a contract specifies otherwise, employers may terminate at any time, with or without notice or explanation, and employees may resign at any time.
Ethical obligations to avoid client abandonment: provide notice when leaving and ensure continuity of care; clinics should have continuity-of-care processes.
Upon termination or layoff: owed wages must be paid per contract and state law; disputed amounts may be withheld until resolved, but undisputed wages must be paid on schedule.
Handling problems in the workplace
Causes of violations often include:
Employer changes in law not being recognized,
Employers operating from outdated experience,
Misunderstanding the law,
Belief that a law does not apply when it actually does.
First steps: discuss concerns with the employer; often, collaborative resolution is possible.
If unresolved, contact administrators, HR, or relevant state agencies (DIR, DLSE) and consider filing a wage claim or complaint if retaliation or wage theft occurs.
Example: a Los Angeles case where the labor commissioner required six residential boarding care facility owners to pay over in back wages and fines.
Non-compete and non-solicit provisions
Non-compete clauses aim to prevent practice competition after leaving an employer.
California generally voids contracts that restrain lawful profession, trade, or business (i.e., non-compete clauses are void, with limited exceptions).
Non-solicitation clauses that prevent taking a client after leaving may be viewed skeptically and often treated as similar to a non-compete.
Professional ethics implications: CAMFT (and other associations) have shifted positions on solicitations; in 2019 CAMFT updated its code to no longer prohibit soliciting clients from other therapists in some contexts.
Practical advice: many employers set wage scales or use client-sharing arrangements to avoid explicit non-compete or non-solicit restrictions.
Negotiating pay and benefits
Therapists can negotiate pay and benefits similarly to other professions; employers may be more or less flexible.
In-network reimbursement: negotiating higher insurer reimbursement rates is possible, but many therapists avoid renegotiation due to concerns about losing in-network status.
Gender and pay: research suggests women negotiate pay less often than men; pay-history use remains controversial; California prohibits using prior pay history to justify pay disparities.
Equal Pay Act: California protects against pay disparities based on sex, race, or ethnicity; differences based on seniority or performance may be permissible if properly justified.
Retaliation protection: employees can discuss and disclose pay and may be protected when doing so; employers are not obligated to disclose others’ pay.
Working from home and telehealth considerations
The governing rule: trainees, associates, or licensure applicants may only perform services at places permitted by the employer.
Court/agency actions indicate that stay-at-home practice for supervisees in full-time capacity is not clearly allowed; administrative law judges have questioned whether home-based practice is permitted by BBS or legislature.
Practical approach: supervisors must assess risks, ensure confidentiality, and evaluate whether video supervision is appropriate for a given supervisee/location.
Implications: more guidance from the BBS is likely needed; supervisors must weigh confidentiality and safety concerns when permitting remote work.
Therapist unions and collective action
Labor unions have seen renewed interest in recent years, with mixed results for large employers (e.g., Starbucks, Amazon).
Many therapists are not eligible for union membership in private practice; larger public-sector employment can have union representation, but private practice typically lacks centralized bargaining power.
For groups of independent practitioners, forming a union could raise antitrust concerns if it involves price-fixing or common-fee negotiation among independent therapists.
Notable example: Kaiser Permanente strike in 2023 led to pay and workload improvements and commitments to expand mental health staffing.
Conclusion: due to practice structure (private practice vs. agency vs. hospital), a single, universal therapy union is unlikely; individual responsibility for protecting rights and negotiating pay remains important.
Practical and ethical implications
Clients’ autonomy and continuity of care should guide any employment transition; avoid compromising client access to treatment.
Employers should stay current with state-level changes; noncompliance is often due to ignorance rather than malicious intent.
When in doubt, consult an attorney or state resources; ethics codes should be aligned with employment law and patient welfare.
Documentation is critical when discussing labor-law concerns with employers; maintain clear records of conversations and any agreed-upon resolutions.
Quick reference to key figures and concepts (LaTeX-formatted)
Minimum wage (state-wide, as of 01/01/2024): per hour.
Scheduled wage increase for health-care workers: up to per hour over several years.
Overtime rates: ; beyond 12 hours in a day: .
Fee split example: associate gets ; employer gets .
Paid sick leave: up to hours or days per year; accrual: one hour per every hours worked; cap: hours.
CFRA eligibility: up to weeks of unpaid leave; eligibility: at least hours worked in the prior 12 months.
Unpaid internship legality: governed by a 7-point test; clinical work typically requires compensation.
Back wages case: in wages and fines (illustrative enforcement example).
Important legal principle: contracts that restrain a lawful profession are void in California unless a narrow exception applies.
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