California's Employment Law Re: Sexual Orientation/Identity
California protects the following persons from employment discrimination based on sexual orientation or perceived sexual orientation (Government Code §12900 & following):
  Employees
  Applicants for employment
  Union members
All employers with at least one employee may not harass persons based on their actual or perceived sexual orientation. All employers with at least five employees may not discriminate (through hiring, promotion, firing, etc.) on this same basis.
The following categories of employees (and others) are all arguably protected under California law from discrimination based on actual / perceived sexual orientation:
  Straight
  Gay
  Lesbian
  Bisexual
  Transgender (probably)
Discrimination on the basis of actual or perceived sexual orientation violates the sex discrimination law, when the discrimination is based on stereotyped notions of how a male or female should act, behave, or talk in the work place.
Discrimination on the basis of actual or perceived sexual orientation violates the sexual orientation law, when the discrimination is based in part, or in whole, on someone’s actual or perceived sexual orientation.
California does not define what is meant by “perceived sexual orientation.” The State’s Dept. of Fair Employment & Housing (DFEH) has broadened that definition to include cases involving discrimination against persons in transgendered status. Many persons, including employers, misperceive persons seeking to change their gender identities as persons who are “weird” variations of gay or lesbian status. The DFEH currently investigates claims of discrimination brought by several categories of transsexual employees or applicants.
The categories of employment decisions which must not be based, in part or in whole, on a person’s actual / perceived sexual orientation are the following:
  Hiring, advertising, and recruitment
  Compensation in wages or benefits
  Firing, lay off, and reductions in force
  Promotion, advancement, and transfers
As of 2000, the law also protects all persons having a contractual relationship with an employer from becoming victims of sexual harassment. Therefore, the following types of non-employees are also protected from sexual and sexual orientation based harassment:
  Independent contractors, including Temp employees from temporary agencies
  Business visitors and repair/service persons
  Clients of attorneys, accountants, doctors, and other professionals
If you believe you have been the victim of actual or perceived sexual orientation discrimination, you must file your administrative complaint of discrimination within one year with the California Department of Fair Employment & Housing. You may telephone their toll free number at 1-800-884-1684, or visit their San Jose Office at 111 North Market St., 8th Floor.