California nepotism laws differ between private employers and public agencies, explaining when family favoritism is allowed and when it violates law. This article explains discrimination risks, protected classes, and employee options when favoritism crosses into unlawful conduct.
By Brad Nakase, Attorney
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Is nepotism illegal in California? A lot of people assume that hiring a cousin or slipping a job to someone’s son is flat-out against the law everywhere. But in California, things aren’t that straightforward. Nepotism is basically giving relatives or close friends an advantage at work. It sits in this strange middle zone where the rules change depending on who the employer is.
In the private sector, there’s no sweeping ban that says, “You can’t hire family.” Plenty of businesses do it openly. But that doesn’t mean anything goes. If the favoritism ends up hurting people in a way that creates discrimination, especially against a protected group, then suddenly it stops being a harmless family perk and starts becoming a legal problem. That’s where companies can get into trouble.
Government workplaces play by a very different rulebook. Public agencies have tighter constitutional limits, merit-based requirements, & specific regulations that restrict hiring your own relatives. The idea is that public jobs must be earned, not handed out at family dinners. So the line between “okay” and “not okay” is much sharper in the public sector. The answer to “Is nepotism illegal in California?” is “yes” when it comes to the public sector.
What we’re really exploring here is how California draws these boundaries: when family favoritism is allowed, when it turns into actionable discrimination, and what employees can do if they think something unlawful is going on. Understanding this is important because not every instance of hiring a relative is wrongdoing, but some absolutely are.
So, let’s break down what nepotism actually looks like under California law, not the urban-legend version, but the real one, and how employers and employees should recognize when a “small favor” crosses the legal line.
In California, nepotism has a pretty straightforward meaning: it’s when someone in a position of authority uses their influence to hire, promote, or move a person not because they’re the best fit, but because there’s a personal relationship involved. This idea shows up again and again across state regulations, especially in rules that apply to public employees. California’s civil service system is built on merit, so anything that pushes decisions away from qualifications and toward personal ties is treated as a direct threat to that system.
The California Code of Regulations is quite clear about this. It bans nepotism outright in state workplaces. Nepotism undercuts the whole point of having a fair, competitive, & merit-based system. Nepotism is someone getting ahead simply because they know the right person. It’s basically what happens when personal connections start outweighing objective criteria.
California law casts a wide net when figuring out what counts as a “personal relationship” for nepotism. It’s not just biological family, though blood relatives are obviously on the list. The rules also include relationships created through adoption, marriage (current or former), domestic partnerships, and even situations where two people simply live together as a couple.
Some counties go even further. Los Angeles County, for example, stretches the definition to include a pretty big circle: spouses and ex-spouses, domestic partners, kids in every form (step, adopted, foster), parents, siblings, and then an extended web of relatives like grandparents, in-laws, aunts, uncles, & cousins.
And it doesn’t stop there. A lot of workplace policies recognize something people often overlook: nepotism isn’t only about family. Close friendships or any relationship that could reasonably sway someone’s judgment can fall under the same umbrella. The point is simple: if the connection could influence an employment decision, it’s on the radar.
Nepotism can creep into a workplace and throw things off balance. People start feeling like their hard work doesn’t really matter. Promotions and opportunities seem to go to the “right” people instead of the deserving ones. Morale naturally dips. And once that happens, productivity tends to slip too. Workers start thinking, “Why give your best when the outcome feels predetermined?”
It doesn’t stop there.
Usually, you’ll see:
In government roles, the damage can be worse. Nepotism doesn’t just affect the team internally; it chips away at public trust. When people believe government jobs are being handed out based on relationships instead of merit, efficiency, and credibility, both take a hit.
On the ground, nepotism shows up in all sorts of subtle (and not-so-subtle) ways: someone getting a promotion they didn’t earn, pay raises that make no sense, certain employees being handed all the good opportunities, biased performance reviews, or even special protection when things go wrong.
Because of all this, many workplaces put clear anti-nepotism rules in place, especially when family members or people with close personal ties would be reporting to each other or working side-by-side in sensitive roles.
In the private sector, the answer to “Is nepotism illegal in California?” becomes nuanced. Unlike government offices that have pages of rules about who can hire whom, private companies don’t carry that burden. In fact, there’s no specific California law. Nothing at the federal level either that directly bans a business from hiring or promoting someone just because they’re family. It’s one of those areas where the private sector operates in a completely different universe from public employment.
So yes, a family-run store can hire half the family tree, and a startup can promote the founder’s cousin without violating any anti-nepotism statute. Whether that’s wise or not is another conversation, but legally, they’re in the clear.
A lot of this freedom comes from California’s well-known at-will employment system. Employers pretty much have the freedom to hire, fire, or shuffle people around however they want—as long as they’re not stepping on any protected categories. That’s the line they can’t cross. Favoritism on its own? Annoying, absolutely. Unfair, most of the time. But illegal? Not really. The law doesn’t jump in just because the boss likes his cousin more than everyone else.
That said, plenty of companies still put their own rules in place. Not because the government is breathing down their necks, but because they’d rather avoid the weirdness that comes with, say, a manager doing performance reviews for their spouse, or deciding how big their brother’s raise should be. It’s more about common sense. The idea is to keep the peace and make sure the office doesn’t become a gossip place.
1. Favoritism Violating Anti-Discrimination Laws
Nepotism on its own isn’t outlawed. It can get you into real legal trouble once it starts bleeding into discrimination. The line is thin but very real: the moment your “helping out a relative” habit starts hurting people who belong to protected groups, the law stops looking the other way.
Things usually go downhill in particular situations:
In short, favoritism becomes a legal issue the minute it turns into unequal treatment tied to protected characteristics. And in publicly traded companies, there’s an extra layer: these cozy family arrangements may also violate corporate governance rules that require transparency about conflicts of interest under laws like Sarbanes–Oxley.
2. Protected Classes Impacted by Nepotistic Actions
Nepotism has a funny way of hurting the same groups again and again. It doesn’t announce itself as discrimination, but the ripple effects usually land on certain protected categories more than others. A common example is national-origin issues. When hiring decisions stay locked inside family circles or close-knit communities, the workplace suddenly starts looking very one-note. People from different backgrounds get quietly pushed out before they even have a chance.
The same pattern shows up with other protected groups, too.
For anyone trying to bring a discrimination claim based on nepotism, the real challenge is proving that the favoritism connects to a protected trait, not just personal liking or family bias. The law doesn’t intervene just because something feels unfair; it steps in only when the pattern consistently harms a protected group. That’s the thin, frustrating line between “bad management” and “illegal practice.”
Nepotism rules in California’s government jobs aren’t just some HR preference or a polite suggestion. They’re baked straight into the structure of how the state believes public employment should work. And unlike private companies that can more or less decide their own comfort level with hiring relatives, public agencies simply don’t get that kind of freedom. The entire system is designed to run on merit, fairness, and the idea that the public should be able to trust the people running its institutions.
1. California Constitution Article VII: The Core of It All
At the center of these restrictions sits Article VII of the California Constitution. It’s not a long, poetic passage, but it’s extremely clear about one thing: government jobs must be filled through a merit-based process. That means qualifications matter. Actual skills, relevant experience, education, and competence are important, not personal connections or who someone’s uncle happens to be.
This constitutional rule isn’t just a guideline. It’s the foundation for nearly every hiring policy across state and local agencies. The whole point is to protect public service from slipping into the kind of favoritism that quietly rots institutions from the inside. When you’re spending taxpayer money and running public programs, the bar is simply higher. The state can’t afford even the perception that jobs are being handed out through back doors.
What This Means in Practice
So while a private company may decide, without breaking any law, that it’s perfectly fine to hire a manager’s cousin or promote a CEO’s brother, government departments cannot do the same. The moment they do, they drift away from merit-based hiring and into territory the Constitution itself blocks. Even the appearance of such favoritism can become a problem, because public agencies operate under far heavier scrutiny.
It’s also about protecting the credibility of government processes. Public employees are expected to serve everyone, not just a tight circle of insiders. A system that slips into nepotism risks losing public trust.
Ultimately, the reason California is so strict about nepotism in public service is pretty simple: government jobs aren’t personal property. They’re public resources. The state is expected to handle them with transparency and integrity. Merit-based hiring keeps the focus where it belongs. Finding the most capable people to serve the public is the objective. It does not let personal loyalties steer decisions.
This sharp divide between public and private sector rules might feel rigid at times. It reflects the responsibility placed on government institutions. Public companies are accountable to millions of residents, not a handful of shareholders. The standards are different, and they’re meant to be.
2. Merit-Based Mandate for Hiring
California didn’t stop at putting merit rules in the Constitution. It went a step further and spelled things out in the California Code of Regulations—specifically, Title 2, Section 87. This section leaves no room for interpretation. It flat-out says that nepotism has no place in the state workplace because it goes against everything the merit-based civil service system is supposed to stand for.
The rule doesn’t dance around definitions, either. It calls nepotism what it is: using your position or influence to hire, promote, or move someone around simply because you share some sort of personal relationship with them. And “personal relationship” isn’t limited to what most people casually think of as family. The regulation spells out the entire range—connections through blood, adoption, present or past marriages, domestic partnerships, and even situations where two people have been living together in a romantic relationship.
But Section 87 isn’t only about definitions; it also puts responsibilities squarely on the shoulders of those in charge. Every appointing authority in the state is required to create & enforce clear anti-nepotism policies. The rule bars employees from taking part in hiring decisions that involve relatives. It flat-out bars any manager from overseeing someone they’re personally involved with. The whole point is pretty simple. Cut off the soft nudges, the quiet bias, & behind-the-scenes influence that can quietly distort an otherwise fair hiring or evaluation process.
3. Required Anti-Nepotism Procedures in State Agencies
California doesn’t leave its public agencies guessing when it comes to nepotism. Because the regulations demand it, every state department is expected to put formal, written anti-nepotism rules in place. CalHR doesn’t hand out a single one-size-fits-all policy, but it does tell departments what the essentials should look like and nudges them to build their own structure around those basics.
At the heart of these policies is a simple message: hiring in the government has to be rooted in merit, full stop. Anything that smells like favoritism, or even looks close to it, cuts against the very idea of civil service. So departments have to spell this out clearly. They also need to define, in plain terms, what counts as “nepotism” and what qualifies as a “personal relationship,” so there’s no wiggle room later.
The policies must also bar employees from slipping into hiring or interview panels where they have personal ties, even remotely. Supervisors aren’t allowed to manage someone they’re dating, related to, or connected to in any personal way that could cloud their judgment, or even look like it might. And because life doesn’t always line up neatly with policy, departments have to spell out what happens when these relationships already exist.
Who gets moved?
How is the conflict handled?
What steps need to be taken so everything stays transparent and above board?
Each agency is expected to answer those questions clearly, so nobody has to guess how things will be handled when personal ties and professional roles collide.
The State Personnel Board routinely checks whether agencies are following through. A 2019 audit, for instance, revealed that nearly a third of departments either had no policy at all or had policies missing major pieces. The reasons were a mix of the usual bureaucratic culprits, staff churn, overloaded teams, and & not realizing the policies were required.
The rationale behind the rules is pretty straightforward despite these hiccups. Public trust collapses quickly when government jobs start looking like family arrangements. Morale inside the workplace can dip just as fast. Anti-nepotism policies aren’t just a matter of ethics; they’re a practical shield. They help keep government operations clean, credible, & functioning. It is important to dispel the perception that connections matter more than competence. They exist to keep the system fair and to protect the workforce as much as the public watching from the outside.
Nepotism, on its own, usually sits in the grey area. But it doesn’t stay harmless forever. There are moments when favoritism stops being just bad workplace etiquette and drifts straight into territory the law actually cares about. And that’s where things get serious.
1. Sexual Favoritism Turning the Workplace Toxic
California’s Supreme Court made it very clear years ago. When sexual favoritism becomes the norm, it can poison the entire environment. The famous Miller case is a perfect example. A prison warden had multiple consensual affairs with people who worked under him. The message trickled down fast: if you want to move up, this is how you do it.
You can imagine how degrading that felt for the rest of the staff. The Court said that even employees who were never approached sexually could still claim a hostile environment because the workplace started looking less like a professional institution and more like a club with its own twisted “membership perks.”
2. Patterns That Hurt Certain Races or Religions
Another issue pops up when hiring or promotions seem to revolve around people who have similar traits. They may look like, pray like, or come from the same background as the decision-maker. It’s subtle, but dangerous. There was a Federal Reserve study showing something shocking. Over 70% of employers leaned toward referrals from the same racial or ethnic group as themselves.
That kind of pattern can easily become illegal discrimination, because even if it’s not intentional, it shuts the door on people who don’t fit the insider circle. A policy can look completely neutral on paper but still have a heavy impact on certain groups in real life.
3. Marital Status Showing Up in Promotion or Workload Decisions
Under California’s FEHA, marital status is actually a protected category. A lot of people don’t realize that. It basically comes down to this: the law doesn’t pick sides. Whether someone’s married, single, divorced, widowed, or figuring things out in between, it protects all of them. Trouble starts when a manager lets someone’s relationship status creep into decisions that should really be about work, not personal life.
For instance, if management always hands extra shifts to single employees because “they don’t have families,” that’s discrimination. It’s the same if a married employee gets special breaks just because their spouse works at the same company. Promotions, schedules, benefits—none of it is supposed to hinge on someone’s relationship status.
4. Word-of-Mouth Hiring That Quietly Pushes Out Diversity
Then there’s the classic “we only hire people referred by someone we already know” culture. It sounds harmless at first. Lots of companies love employee referrals. But referrals tend to reflect the same demographics as the people doing the referring. One large study showed that at some companies, nearly half of higher-level roles come through referrals, and more than 60% of those referrals were for applicants of the same gender. Workplaces like these can become like a small group at the top. A referral-heavy system can easily become a practice of discriminatory hiring.
Sometimes workplace favoritism crosses a line. When it starts hurting people in legally protected groups, employees actually do have options. The process isn’t instant or simple, but there is a way forward if you decide to challenge it.
1. Going the Federal Route: Filing with the EEOC
If you’re dealing with something that falls under federal discrimination laws (Title VII), you start with the Equal Employment Opportunity Commission. They’re the agency that looks into claims where favoritism ends up shutting out people because of race, religion, sex, and so on. You file a charge, they review it, and the process begins from there.
2. Using California’s System: The CRD and FEHA
On the state side, California’s Civil Rights Department handles complaints under FEHA. FEHA usually gives workers broader coverage and applies to smaller employers, too. One helpful thing: the EEOC and CRD “share” cases, meaning if you file with one, it can automatically be considered filed with the other. So you don’t end up doing everything twice.
3. Timelines Matter: Short Federal Deadlines, Longer State Ones
The clock starts ticking the moment the discriminatory act happens. You usually have 180 days to file for federal cases. California residents sometimes get up to 300 days because of how federal and state rules interact. The window is much larger under FEHA: up to three years to submit a complaint. Missing these deadlines can cut off your options entirely, so timing is everything.
4. After the Agencies Review the Case: Right-to-Sue Letters
Once the agency has looked at your complaint, sometimes they investigate, sometimes they simply review, and it ends with a “right-to-sue” notice. That’s basically your green light to take the case to court. If it’s an EEOC letter, the clock is tight: you get 90 days to file in federal court. California’s CRD gives you more breathing room, with a full year to move forward in state court.
5. Before All That: Talking to HR Can Help
Most employees take an internal step first: reporting the issue to HR. It doesn’t always fix the problem, but it creates a record and sometimes resolves things faster than going through government channels. And if the issue keeps happening, that early complaint becomes part of the paper trail that supports your case later.
Is nepotism illegal in California? The answer depends entirely on the setting. Understanding where nepotism stands under California law really comes down to separating two very different worlds: government jobs and private workplaces. The rules are carved in stone in the public sector. The Constitution and state regulations insist on merit, fairness, & transparency. A government job is supposed to go to the most qualified person, not someone’s cousin or spouse, and the system is built to protect that idea. So, any hint of favoritism rooted in personal relationships is essentially a non-starter there.
The private sector, however, operates on a completely different rhythm. Businesses have a lot more room to make their own choices about hiring family or friends. Nepotism by itself isn’t outlawed; plenty of companies do it openly, some quietly, and some avoid it altogether. But this freedom has limits. The moment favoritism starts edging into discriminatory territory, it repeatedly ends up shutting out certain racial groups, disadvantages people because of who they’re married to, encourages sexual favoritism, or creates a workplace that looks like a closed club. It stops being “unfair but allowed” and starts looking like a legal issue.
Employees who feel they’ve been pushed aside because nepotism turned into discrimination aren’t powerless. They can turn to the EEOC on the federal side or California’s CRD under FEHA. FEHA usually offers broader protection. Each system has its own deadlines, procedures, & timelines. Employees need to gather documentation and follow internal HR steps before going down the formal complaint path.
Public agencies don’t have the luxury of this gray area. The rules there are strict because the public expects fairness, efficiency, and a hiring process that’s immune to personal influence. It’s less about office politics and more about protecting public trust.
At the end of the day, California’s approach draws a pretty clear line: nepotism in private workplaces may be annoying, demoralizing, or unfair, but it’s not automatically illegal. It becomes a problem only when it spills over into discrimination that affects protected groups. In government, though, nepotism is basically a direct violation of the merit system, full stop.
The balance tries to respect business freedom while still safeguarding basic fairness for workers. It is not a perfect system, but it gives people real options when favoritism turns into something more harmful. “Is nepotism illegal in California?” depends entirely on where it happens and what impact it has.
Have a quick question? We answered nearly 2000 FAQs.
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