Posted on February 20th, 2020
The California payroll law is complex. If you’re an employer, here’s how to comply with California’s wage payment and hours worked standards.
You’re a business owner with a workforce that works hard, and you want to pay them on time and stay within the law.
That doesn’t sound too complicated, right?
However, stringent California payroll law means that most employers have to abide by and comply with what can seem like a complicated list of requirements that fall under the California payroll law.
So, let’s look at this in greater depth…
What’s the California Payroll Law?
It’s a law that outlines an employer’s legal obligation to their workforce in respect of wage payments and hours worked. We’re not going to summarize it in its entirety here.
However, here’s a few essential pointers for employers to consider and why we think that having the support of an employment lawyer to advise on matters relating to wage payment and hours worked is a good ROI.
It’s wise to assume that most employees will be at least partly aware of how they’re covered by California payroll law. It stands to reason; any responsible employer needs to have the best advice there is on the table.
California payroll law relates to people working in the public and private sectors. The law has rules around how to calculate wages, how to pay them, what deductions an employer has to make, what records they keep, and what minimum wage an employee is entitled to.
Also crucial when calculations are being made are what hours a worker has completed each month.
California employers have to take all the above into account to ensure they are not breaking California payroll law.
Here are a few headlines that give you an idea of some of an employer’s responsibilities where pay is concerned:
Payday
The law states that most employers have to pay their staff at least twice each calendar month and that those payment days should be designated and regular days.
One crucial ruling is that if your staff earn wages for hours worked in the first 15 days of a calendar month, you have to pay them no later than the 26th of the same month.
If your staff earn wages for hours worked between 1st and 31st of any month, then you have to pay them by the 10th of the following month. This falls under what lawyers will refer to as Labor Code Section 207.
Overtime
As far as overtime is concerned, the same California payroll law states that:
“overtime wages must be paid no later than the payday for the next regular payroll period following the payroll period in which the overtime wages were earned.”
How to Pay Employees
Employers have to pay their staff in either cash, direct deposit into an account of an employee’s choosing or check.
There’s extensive guidance to be found in California payroll law, and a reputable lawyer can walk you through the headlines and details before you get going. In other words, the choice is the employee’s, not yours.
Minimum Wage
California employers must pay their workers the minimum wage, although there are a few exceptions to this rule. Depending upon how big your business is, you may be required to pay your workers a higher wage.
If your business employs more than 26 people, then the minimum wage you are required to pay your staff has to go up each year.
A reputable and knowledgeable employment lawyer will advise you exactly who in your workforce counts as an employee or a contractor.
What About Employees Who Resign, Quit, are Fired, Terminated, or Who You’re in Dispute with?
There’s a whole raft of regulations that employers have to comply with should they fire someone. For example, if you fire someone, did you know that you have to pay that person all outstanding wages due at that point?
Similarly, if one of your team gives you more than 72 hours notice, the same applies.
If you’re in dispute with an employee over their wages and hours worked, again, you need to ensure that you comply with all necessary regulations.
What About Equal Pay?
Alongside California payroll law, employers need to be aware of the California Equal Pay Act.
It may have been around for a long time, but it’s worth noting that the Act was strengthened in 2015, and among its key headlines is a requirement that it’s more onerous for an employer to argue a case for inequalities in pay between the sexes.
A short to-do list:
- Have an employee policies and procedures package in place.
- Talk to a reputable employment lawyer who knows their way around both the California payroll law and Equal Pay Act
- Know the difference between contractors and employees
Simple, right?
Are You Ready to Handle Your Payroll?
Put simply, California payroll law is lengthy, complicated, and no employer has the time to unravel it.
If you have excellent HR and Finance departments, they are still going to need information and support to ensure your firm is compliant and insulated against any form of litigation.
We think it’s vital that you have a reliable lawyer you can call upon to ensure you aren’t breaking the law where California payroll law and equal pay are concerned.
Protect yourself by getting in touch to find out whether or not your business is compliant or not. Our firm only represents California employers, not employees. You’ll get a free 15-minute phone consultation in English or Spanish.
Our lawyers have a good reputation with the California State board and can give you solid reassurance and advice today.
