California Pay Statement Requirements
Posted on March 26, 2018
According to the Labor Enforcement Task Force, the second most frequent violation among California employers between 2012-2017 was related to improper or missing pay statements.
Pay statement violations can be low hanging fruit for plaintiff attorneys looking for things to tack on to other complaints their clients bring against companies. We have seen simple workers’ comp disagreements balloon into class action lawsuits for something as simple as an employer not having their address on their pay statements.
Here is a checkup for California employers to make sure they are complying with pay stub laws:
Timing of Pay
California employees must be paid at least twice a month. Compensation earned between the 1st and the 15th of the month must be paid no later than the 26th day of the same month. Compensation earned from the 16th of the month through the end of the month must be paid no later than the 10th day of the following month.
If an employer pays employees weekly, every two weeks, or twice a month according to a different earning schedule, it may comply with the payday laws by paying employees for work performed within seven days after the end of the pay period.
Employers must notify employees of the time, date, and place they will be paid.
Executive, administrative, and professional employees may be paid only once a month, as long as they are paid by the 26th day of the month and their paychecks include their entire salary for the month. Employees who work for a farm labor contractor must be paid every week.
Pay Stub Requirements
California law requires employers to give employees an itemized written statement with every paycheck. This statement, which can be in the form of a detachable pay stub or a separate document, must include the following information:
- Total gross wages the employee earned during the pay period
- Total hours the employee worked during the pay period
- The number of units and rate for any piece-work the employee performed
- All deductions from the employee’s pay
- Employee’s net pay
- The dates included in the pay period
- Employee’s name and the last four digits of the employee’s Social Security number
- Employer’s full name and address, and
All hourly rates in effect during the pay period and the number of hours the employee worked at each rate
Employers who use a payroll company to prepare wage statements are responsible for providing the payroll company with all information that must be contained in the wage statement. Furthermore, employers should review wage statements for completeness and accuracy and not assume the wage statements are accurate. Accuracy is vital and minor mistakes can be costly, with employers facing large fines and penalties, even for minor omissions. California law imposes penalties on employers who do not comply with wage statement requirements:
- Failure to provide an employee with a wage statement may result in a penalty of $250 per employee for the initial violation and $1,000 per employee for subsequent violations
- Providing an employee with an inaccurate wage statement means facing a penalty of up to $4,000 per employee
Lauren Sims is the article’s author and the Director of Human Resources.
Whenever you require professional Human Resources or Payroll guidance to navigate the ever-changing landscape of California and Federal Employment Laws & Regulations, contact us for a no-obligation consultation.
eqHR Solutions offers professional, tactical and strategic human resources support; ADP payroll product implementation/training and payroll processing services for businesses throughout Southern California.