My 401(k) plan document indicates that the plan does NOT offer annuities and the J & S rules of Code Sections 401(a)(11) and 417 do not apply to the plan.

Therefore, I assume no spousal consent is required to process distributions for above or below $5000 vested dollars.

Does it matter that my employees live in California? I assume not based on my plan document. Does spousal consent matter depending on what state my employees live in if no annuities are even allowed in the plan?

No. The spouse is consenting to not receive the distribution in the form of a joint & survivor annuity. In a plan that is not required to provide that option, there is nothing to consent to not receive. Logically, no matter what the state of residence, it would be impossible to have to consent to not receive an option that does not exist.