California may have some of the strictest laws surrounding employee rights; it strongly regulates how employees are paid and imposing penalties for not paying employees on time. California has laws for when you must be paid, what information should be in a paycheck, when the final paycheck must be received after separation, and what that final paycheck must include
California Payday Laws
The laws which regulate paydays, in general, says most employees must be paid twice a month. Wages warned between the 1st and the 15th of the month must be paid by the 26th day of that month. Wages earned from the 16th of the month to the final day must be paid by the 10th of the following month.
If the employee is exempt from the semi-monthly payday law, the employer must pay the employee within seven days of the earning period. This rule applies whether the employee is paid weekly, bi-weekly, or monthly.
Paydays must be designated in advance, meet the California payday laws, and be regular. Employers must post the time, date, and location of pay for employees to access.
There are some exceptions to the payday laws, professional employees and executive assistants may be paid once a month, provided it is by the 26th of the month. Farm laborers must be paid weekly.
What Must My Pay Stub Include?
Employers must give their employees a written statement with every paycheck to comply with California law. The written statement must itemize:
- Gross wages earned during the pay period
- Total hours worked during the pay period
- Number of units worked and pay rate per unit (for piecework)
- The deductions from the employee’s pay
- Net pay
- Dates included in the pay period
- The employee’s name and final four digits of their SSN
- The full name and address of the employer
- All of the hourly rates that apply to that pay period and the number of hours worked at each rate.
Payroll Records Request
California law allows employees to request records of their payroll records, and the employer must provide the records within 21 days of the request. The employer can charge you for reasonable copying costs. If the employer fails to let you access your payroll records, they must pay you a penalty of $750.
Rules For Final Paychecks
If you are fired, laid off, or terminated for no fault of your own, you are entitled to your final paycheck at the time of your termination. Your final paycheck must also include the payout for unused accrued vacation time or PTO.
If you quit and give your employer less than 72 hours’ notice, then your employer must give you your final paycheck within 72 hours. If you give them at least 72 hours’ notice, then they must give you your final paycheck on the last day of work. Y our final paycheck must also include the payout for unused accrued vacation time or PTO.
California allows employees to collect a waiting time penalty of an average day’s wage for every day the check is late. This will be accrued up to a maximum of 30 days.
Penalties For Late Payments
Whether you receive a penalty for late payment of wages will depend on the employee’s and your actions.
An employee must generally follow a procedure when looking to file a late wage claim:
Firstly, the employee must contact you about late payment and give you a chance to resolve the situation. It is in your best interest to resolve the situation swiftly to avoid legal action. If you fail to resolve the situation, or the employee feels you may owe them damages as well (such as covering late payment fees for their bills), then they can contact the labor board to file a claim or go to small claims court.
An employee will usually try and let you resolve the situation first before seeking legal action. A claim or court case will cost you both money and time, which can be easily avoided. It is recommended to take the opportunity to rectify the issue before penalties and interest are required by the court.
A one-off late payment, if rectified will be unlikely to result in a lawsuit. However, claims and lawsuits must be avoided at all costs. Most employees will only file lawsuits if they are repeatedly paid late, or they are not paid what they are owed when they bring it to your attention.
What are the penalties for paying employees late?
Whether you end up with legal penalties for paying an employee late will depend on how the employee wants to handle the situation. Even though state laws differ, there is a typical procedure that employees must follow.
The first step for the employee is to contact you about a late payment. If you still fail to pay the employee or you pay them but the employee feels you should also pay damages, they can contact the labor board in your state to get a claim started. Another option for the employee is going directly to small claims court.
A claim or a court case could result in you being penalized and needing to pay liquidated damages. If you end up hiring a labor attorney, you’ll also have attorney fees, along with other court costs.
Now, is it likely for an employee to sue you or file a claim with you over a late payment? Not unless absolutely necessary, because it takes time and money for them to do so. That’s why you should get the situation corrected as soon as possible by paying the employee what you owe them.
One instance of a late payment likely won’t result in a lawsuit, although you should still do your best to avoid it. Lawsuits and claims are typically the result of either refusing to pay an employee what they’re owed or repeatedly paying employees late. Stay on top of things at payday and you won’t have a problem.