Employer Guide & Resources

Please be aware that various business licenses and permits are necessary to own and operate an optometric practice. Requirements vary at the city and county levels and it is best to check with your local government offices.

If you plan to hire employees, you must register with the federal and state government as an employer. As an employer and/or a business, you will be subject to collecting taxes that must be paid to federal and state agencies.

Registering as an Employer

Federal Employer Identification Number (FEIN)

Employers with employees, business partnerships and corporations must obtain an Employer Identification Number (EIN) from the IRS. Contact your local office of the Internal Revenue Service for more information. To apply online visit the IRS website at: www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employer-ID-Numbers-EINs 

State of California Employment Development Department (EDD)

Once you become an employer subject to the payroll tax laws of California, you must complete and submit a registration form to EDD within 15 days. EDD will assign you an eight-digit employer account number, e.g., State Employer Identification Number, SEIN, state ID number, or reserve account number. An application and more information about employment tax requirements are available from the EDD website at www.edd.ca.gov/Payroll_Taxes/.

In addition, as an employer, you are required to report information on newly hired or rehired employees to the EDD’s New Employee Registry (NER) within 20 days of the employee’s start-to-work date. You are to file a Report of New Employee(s) (DE 34) form that can be found on EDD’s website at www.edd.ca.gov/pdf_pub_ctr/de34.pdf

Note: All employers are required to electronically submit employment tax returns, wage reports, and payroll tax deposits to EDD.

Permits & Taxes


CalGOLD provides businesses with information on permits and other requirements of California agencies at all levels of government, including addresses,telephone numbers, and links to agency internet pages. Specify the county and city your optometric practice is located in and this website will provide a list of permits and licenses you will need to obtain for your business: www.calgold.ca.gov

Seller’s Permit

The vast majority of private practice optometrists need to obtain a seller’s permit from the state Department of Tax and Fee Administration. You do not need a seller’s permit if you are only selling ophthalmic materials furnished in the performance of your professional service in the diagnosis, treatment or correction of conditions of the human eye. Anything else you sell in your office, including sunglasses without a prescription, contact lens solution or dietary supplements, requires a seller’s permit. To apply for a seller’s permit, visit: www.cdtfa.ca.gov/services/#Register-Renewals

Franchise Tax Board

Business filing information, including types, requirements and instruction, is available here.

Internal Revenue Service

The form of business you operate determines what taxes you must pay and how you pay them. For details on the various federal taxes and how to file, please visit: https://www.irs.gov/businesses/small-businesses-self-employed/business-taxes

California Tax Service Center

Provides online access to information and forms for the filing of state income, payroll, and sales and use taxes: www.taxes.ca.gov

Striking Gold in California

Striking Gold in California is an educational tool for small business owners that provides basic tax information from the Internal Revenue Service and the three California tax agencies, all in one place: www.taxes.ca.gov/strikinggoldbus.html

Minimum Wage Law

For any employer who employs 26 or more employees:

For any employer who employs 25 or fewer employees:

Be aware that the minimum wage increase may also impact exempt employees. Employees who meet certain qualifications can be "exempt" from the laws related to overtime pay, minimum wage, rest breaks, and meal periods. Generally, the minimum compensation for exempt employees is twice the minimum wage based up on 40-hour workweek. This means a small business owner - 25 or fewer employees - must pay an exempt employee at least $1,200 a week regardless of the number of hours worked beginning 2023.

Paid Vacation

There is no state or federal law or regulation requiring any optometric employer or other employer to provide employees with paid vacations, but vacation time can enhance positive employee relations, along with recruitment and retention efforts for qualified employees.

There are many rules that govern this employee benefit. It is therefore suggested that the optometric practice have a written policy governing this employee benefit that is clear as to how much vacation is offered, the rate of accrual and whether the benefit accrual begins immediately or after a specified period of time.

Please click HERE for sample vacation policy and request.

If an employee does not use his or her vacation, can the optometric employer cancel or not pay for the vacation time that accrued?

No. Vacations have been ruled by the courts as a form of wages. Like wages, the right to vacation vests as the employee renders services to the practice. Just as an employer cannot take away or reduce wages after an employee renders services – or earns the pay, an optometric employer cannot have a “use-it-or-lose-it” vacation policy whereby if vacation benefits are not used by a specified time, the employee loses the vacation. However, an optometric employer can place reasonable caps on the accrual of vacation time which can effectively limit the amount of vacation liability that must be paid at time of employment separation (see below).

Can an optometric employer charge against an exempt employee’s accrued vacation partial days off?

No. If an exempt employee works any time during the workweek, then he or she must be paid in full for that workweek. Thus, if an exempt employee takes one-half day, e.g., four hours, off as “vacation,” the employer may not charge that time against the exempt employee’s accrued vacation. There is an exception, however. If the exempt employee takes an entire day off or more (in full day increments) as vacation, and the employer has a policy or practice of paying for that time, then the employer may charge the entire day against the exempt employee’s accrued vacation.

Does an optometric employer have to pay all earned but unused vacation at the time of employment termination?

Yes. All earned, i.e., accrued, but unused vacation must be paid at the time of employment separation at the terminating employee’s final rate of pay.

Must an optometric employer pay overtime to an employee who takes a paid vacation day off during the workweek and who then proceeds to work 40 hours in that same workweek?

If an employee takes a full-day paid vacation, e.g. eight hours, and proceeds to work 40 hours in that workweek for a total of 48 hours pay, there is no requirement to pay overtime for the eight hours over 40 in the workweek as overtime is paid only for hours actually worked, not hours paid. In this example, the employee actually worked 40 hours in the workweek, although he or she was paid for 48 hours in the workweek, given the paid vacation day, and no overtime was owed.

If an optometric practice grants employees paid vacation time, COA strongly suggests that the practice have a written policy in place and that it be consistently applied. Further, COA suggests that optometric employers document all vacation time requested by employees and whether it is approved or denied. Below is a sample employee vacation policy with instructions on how to tailor a policy to your practice. In addition, a sample “Vacation Request” form is provided to document employee vacations.

Paid Sick Leave

An employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the beginning of employment, is entitled to paid sick leave. Employees, including part-time and temporary employees, will earn at least one hour of paid leave for every 30 hours worked. Accrual begins on the first day of employment or July 1, 2015, whichever is later.

An employer may limit the amount of paid sick leave an employee can use in one year to 24 hours or three days. Accrued paid sick leave may be carried over to the next year, but it may be capped at 48 hours or six days.

Paid Sick Leave FAQs



Retaliation or discrimination against an employee who requests or uses paid sick days is prohibited. An employee may file a complaint with the Labor Commissioner against an employer who retaliates or discriminates against the employee for exercising these rights or other rights protected under the Labor Code. 

Sick Time Accrual

Accrual begins on the first day of employment or, July l, 2015, whichever is later.

Annual paid sick leave is to be accrued for a total of 24 hours, or three days.

Paid sick time may be accrued by any of the following methods:

An employer must allow carryover of unused sick leave to the following year, but may limit an employee's total accrual to no more than 48 hours or six days.

Calculate Sick Time

2. For exempt employees:

Retirement plans

The California state-mandated CalSavers Retirement Savings Program, requires small businesses with 5 or more employees (full-time or part-time) without an employer-sponsored retirement plan to either register for CalSavers or establish their own plan, such as a 401(k) plan. 

Deadlines to provide a retirement plan and register with CalSavers: June 30, 2022

CalSavers is available to California workers whose employers don’t offer a workplace retirement plan, self-employed individuals, and others who want to save extra. Savers contribute to an Individual Retirement Account (IRA) that belongs to them. Employers that don’t offer their own plan will register for CalSavers by their deadline and facilitate their employees’ access to the Program.

Independent Contractor Classification

In order to classify as independent contractor they must meet the "ABC Test":

A) That the worker is free from control and direction of the hiring entity in connection with the performance of the work, both under the contractor for the performance of the work and in fact.” This portion of the test is similar to existing law.

B) That the worker performs work that is "outside the usual course of the hiring entity’s business.” [Emphasis added.] This portion of the test is the most problematic for many ODs. It examines whether the person is “providing services to the business in a role comparable to that of an employee.” Said another way, the question is whether the service the individual is performing is necessary to the business of the employing unit or merely incidental. As a practical matter, this test prevents the use of independent contractors except where the person’s work has no tangible connection to the hiring entity’s business. An OD working at a practice providing eye care services would probably no longer meet this portion of the independent contractor test.

C) That the work is customarily engaged in an independently established trade occupation or business of the same nature as the work performed.” For example, does a bookkeeper contracted part-time by the practice as an independent contractor offer their services on the open market, have other paying clients, a business card and website, etc.?

If they do not meet all three standards, they must be classified as employees.

Failure to properly classify your workers may result in penalties. The minimum penalties for a willful violation are from $5,000 to $25,000 per incident, in addition to any other penalties or damages that are otherwise available at law. [Labor Code Section 226.8.]

COA recommends that its members who have independent contractor agreements for the rendering of services at their practice review them with a professional knowledgeable in this area like your attorney or CPA. Additionally, COA members may consult with COA’s legal counsel, Wilkie Fleury, on this matter or others for up to 30 minutes a month at no charge. Simply call 916-441-2430, provide your COA member number and ask for Steve Marmaduke, Bill Gould or Dan Baxter.

Small Business Resources

U.S. Small Business Department

The U.S. Small Business Department provides numerous resources for small business owners from planning your business to growing your business: www.sba.gov/starting-business

California Business Portal

California Business Portal provides assistance for starting a new business: http://businessportal.ca.gov/.

California Secretary of State

The Secretary of State website has a step-by-step guide for starting a business in California, and provides information and forms for business entities: www.sos.ca.gov/business-programs/businessentities/starting-business/

California Department of Industrial Relations

Provides information for employers on labor laws, required postings, occupational safety and health (Cal/OSHA) and workers' compensation: www.dir.ca.gov/for_employers.html .