Who's Doing HR at Your Company? In California, That Answer Gets Expensive Fast

So, who's doing HR at your company right now? If you just pictured your office manager, your assistant or yourself at 11 at night with a glass of wine and the Labor Code, keep going. California's rules kicked in at your 1st, 5th and 15th hire whether anyone noticed or not. Number five is the one that bites, and I'll show you why in a minute.

One COO I worked with ran a 24 person software company and had handed HR to her executive assistant, who did it on Fridays, somewhere between the expense reports and the holiday party budget. It worked fine, the way a spare tire works fine, right up until one quarter when three things landed in the same month.

A job posting went live with no pay range, the week after they hired their 15th person. A manager asked if he could "just say no" to a leave request. And, someone who'd moved to another state asked when their final paycheck was coming.

None of it was a disaster yet, but all of it came from the same problem, and I'll tell you how she fixed it at the end. (It wasn't hiring a VP of HR, and wait until you see what that costs.)

What Is Fractional HR, and Why Does California Make It Different?

Fractional HR is a senior HR leader you share. Instead of hiring a full time VP of HR, you get the same judgment for part of the month, on a flat monthly fee, with a defined scope. You call one person, and that person owns the problem until it's done.

You've probably looked at the other options already, so here's how each one plays out at a company your size.

• A PEO runs payroll and benefits as a co employer. Great for benefits buying power, but most owners still end up handling the hard people calls themselves. I compare them side by side in fractional HR vs PEO vs HR consultant.
• An HR subscription service gives you a helpline and templates. Fine for simple questions, thin on ownership, and you'll explain who you are every single time you call. See fractional HR vs Bambee for how that plays out.
• An HR consultant usually does one project and leaves.
• A full time HR hire is the right call eventually. For 25 people, it's usually buying a tour bus to drive to the grocery store.

In most states HR is a department, but in California it's a sport with a rulebook that gets new pages every January. That's why a wrong guess here costs more than it does almost anywhere else.

The Takeaway: with fractional HR, you get a person who owns the work, and that's the part a phone line or a pile of templates can't give you.

Okay, so what does California actually expect from you, and when? You've probably never seen this laid out in one place.

The California Headcount Ladder: What Kicks In at 1, 5 and 15 Employees

You probably don't know which California rules apply to you until one of them shows up in your inbox. So, here's the short list by headcount, and it doesn't cover every rule, just the ones that trip up growing companies most.

Headcount	What kicks in	Source
1 or more	Harassment protections cover your workplace	Gov. Code 12940(j)
1 or more	Paid sick leave (you can cap use at 40 hours or five days a year)	Labor Code 246
1 or more	Statewide minimum wage of $16.90 an hour in 2026 (some cities are higher)	California Labor Commissioner
1 or more	A written pay notice at hire for nonexempt employees with pay rate, payday and sick leave rights	Labor Code 2810.5
1 or more	Final pay due at the time of termination	California Labor Commissioner
Most employers	A written Workplace Violence Prevention Plan	Labor Code 6401.9
5 or more	Discrimination rules under the Fair Employment and Housing Act	Gov. Code 12926 and 12940
5 or more	Up to 12 weeks of job protected family and medical leave (CFRA)	Gov. Code 12945.2
5 or more	Up to four months of pregnancy disability leave	Gov. Code 12945
5 or more	Harassment prevention training for supervisors and staff	Gov. Code 12950.1
5 or more	Up to five days of bereavement leave	Gov. Code 12945.7
15 or more	A pay scale in every job posting	Labor Code 432.3

Remember when I said number five bites? Look back at that table, because five employees is the line where California starts treating you like a real employer, with discrimination rules, family leave, pregnancy leave, harassment training and bereavement leave all landing at once.

You probably crossed it without noticing, usually the week you hired the person who finally let you take a Saturday off.

Then at 15, your job postings become public proof of whether you're paying attention, and anybody can screenshot them. I also broke down the workplace violence plan in this California workplace violence prevention guide, because that one applies to most employers, even small ones.

You'll find out about CFRA the same way you find out about a slow leak, from the ceiling. The goal of the ladder is to find out from the blueprint instead.

The Takeaway: if you've got 12 people and none of this is written down, you're behind on a whole list, not one thing.

Sources for the table: Government Code 12940, Labor Code 246, California Labor Commissioner minimum wage FAQ, Labor Code 2810.5, California Labor Commissioner final pay FAQ, Labor Code 6401.9, Government Code 12926, Government Code 12945.2, Government Code 12945, Government Code 12950.1, Government Code 12945.7 and Labor Code 432.3.

So, who's supposed to handle all of that, if it isn't your assistant on Fridays?

What a Fractional HR Leader Actually Does for a California Company

This is the work, by name, roughly in the order you'd probably bring it to me. It almost always starts with something that can't wait.

• Termination Review. Before anyone is let go: the reason, the records, the 90 day look back for complaints and leave, final pay timing and the script. More on this in how to fire an employee in California and what counts as wrongful termination in California.
• Complaints and Investigations. When someone reports a manager, I coach your leader through how to handle it, step by step, so it's done right and documented.
• Leave Questions. CFRA, pregnancy disability leave, accommodations and the return to work, before a manager says the wrong thing (like "just say no").
• Pay and Classification Check. Exempt or nonexempt, employee or contractor, and pay ranges that match your postings. See when to fix pay and job classification.
• Employee Handbook. An attorney reviewed Employee Handbook made for how your company actually runs, not a template with your logo slapped on it.
• Workplace Violence Prevention Plan. The written plan, training and log. See the California WVPP package.
• Manager Coaching. Prep for the hard conversations, write ups and one on ones, so your managers deal with problems when they show up instead of a year later.

The full list of what I handle on terminations and employee issues is on the services page, by name.

The Takeaway: the urgent problem gets handled first, then I fix what caused it.

6 Signs You Need Fractional HR in California (Count Them)

Fractional HR starts making sense when HR starts costing you sleep, time or money, whatever your headcount is. Count how many of these are true for you right now.

• You've got five or more employees and nobody can tell you which leave laws apply.
• Someone who isn't trained in HR is doing HR "on the side," and it might be you.
• You've got a termination, a complaint or a leave request sitting on your desk.
• Your job postings don't have pay ranges and you've got 15 or more people.
• You're hiring in other states and assuming California rules cover everyone.
• Your managers are making it up as they go, and you're hearing about it after.

Whoever "does HR on Fridays" at your company is probably doing it the way most of us do our own taxes, with a lot of hope and one eye closed. That's no knock on them, because the job just outgrew the arrangement.

If you counted two or more, read does a small business need an HR department and what a fractional HR person does in the first 90 days next.

How Much Does Fractional HR Cost in California? (Here's That VP Number)

One flat fee a month for a defined scope, agreed before anything starts. For senior level work, it usually lands around a quarter to a third of what a full time VP of HR costs in the first year.

And, that full time number is bigger than you'd think. A VP of HR in California has a median base pay of $218,355 a year (Salary.com, as of October 2026), and pay is only 67.5% of what a management level employee costs a private employer, with benefits and payroll costs making up the rest (U.S. Bureau of Labor Statistics, June 2026). Put those together and one full time VP of HR runs roughly $300,000 to $355,000 a year, before you pay a recruiter to find them.

I walk through real market prices in how much fractional HR costs per month.

In my experience, the bigger number is usually the one on the other side, like one retaliation claim or one leave request handled wrong. Either one can cost more than a year of help, and they don't send a calendar invite first.

So, How Did the COO Fix It?

Back to the COO with the Friday HR plan. She didn't hire a $300,000 VP of HR, and she didn't hand it all to a helpline either. The fix came in two rounds.

The urgent stuff came first. Pay ranges went into every open posting that week, the manager got a script for the leave request (the answer was yes, by the way) and the out of state final paycheck got checked against that state's rules. After that came the boring part, which was a one page headcount ladder, an Employee Handbook made for how they actually work and one person to call before any employee decision.

Her assistant got her Fridays back. Nobody threw a party about it, which is exactly how you know HR is working.

Most of my clients are in California, from San Francisco and Northern California to Los Angeles, Orange County, San Diego, the Inland Empire and Sonoma County, and the California page has the overview. But, I also work with companies from Hawaii to New York, mostly by video, and the job is making sure each person is covered by the rules where they actually work.

If you're running a California company with 12 to 350 people and no HR person, and something is sitting on your desk right now, put "urgent" in your message and you'll hear back within four business hours. Or, grab 25 minutes with me and we'll figure out whether it's a job for me or for an attorney.

This is the HR point of view based on experience and my understanding, not legal advice.

Common Questions

What is fractional HR?

A senior HR leader who works part of the month for your company on a flat monthly fee and a defined scope, and who owns your people issues the way a full time head of HR would.

Does a California company need HR at five employees?

California doesn't require an HR department, but at five employees the Fair Employment and Housing Act, CFRA family leave, pregnancy disability leave, harassment prevention training and bereavement leave all apply, so someone has to own them.

Do small businesses in California have to post pay ranges?

Employers with 15 or more employees must include a pay scale in every job posting under Labor Code 432.3.

How much does a full time VP of HR cost in California?

Roughly $300,000 to $355,000 a year. The median base pay is $218,355 (Salary.com, October 2026), and pay is 67.5% of total cost for management roles in private industry (BLS, June 2026).

Is fractional HR different from a PEO?

Yes. A PEO handles payroll and benefits as a co employer. Fractional HR is a senior person who handles the people decisions: terminations, complaints, leave, pay and classification, handbooks and manager coaching.

Does fractional HR replace an employment lawyer?

No. I prepare, your attorney reviews and makes the legal call. Good fractional HR usually means fewer, shorter and cheaper attorney calls.

Can a fractional HR leader work remotely for a California company?

Yes. Most of the work happens by video, phone and message, and in person sessions can be arranged when training or culture work calls for it.

How fast can fractional HR help with an urgent employee issue?

Put "urgent" in your message and you'll hear back within four business hours.