Did you know there are laws about what day you pay your employees? Yep, you guessed it, there’s a law for just about everything when it comes to your employees. Payroll laws involve a lot more than just making sure you’re paying your taxes. Each state has specific laws about hours people can work, who can work, what should be paid and what benefits they are allotted. There are also a lot of exemptions to these laws. Make sure if you live in California you are familiar with the California Labor Laws.
So what are the California Payday Laws? Let’s take a look at three different categories: Pay Periods, Paydays, and Final Wages.
What constitutes as a Pay Period?
A pay period is a predetermined time that you as the employer select in which your employees will earn their pay for their next paycheck. Typical pay periods are the 1st – 15th of the month and the 16th – last day of the month. Some employers opt to pay weekly or bi-weekly which means the pay period would be the workweek or 2 workweeks prior to that payday, respectively.
How Often Do Paydays Need to Be?
As a general rule, employees must be paid at least 2 times during each month. If you pay your executives, administrative and professional employees one time per month it must be paid on or by the 26th day of the month they are working, including the days they haven’t worked yet to the end of the month. See more here: http://www.dir.ca.gov/dlse/faq_paydays.htm
The days you pay must be determined in advance and the employee must be notified. This is the type of thing you’d talk about when hiring the employee and put in the employee handbook. It also goes on the required posted notices in a public place in the office.
Any time an employee works from the 1st of the month until the 15th of the month must be paid by the 26th day of the same month. Additionally, any work done from the 16th of the month through the end of the month must be paid by the 10th of the following month. If you decide you want to run your payroll periods on different days, then you have to pay your employee within 7 days of the end of the payroll period when the hours were worked.
Overtime has to be paid by the following payday for the next payroll period.
How and When Are Final Wages Paid?
If you as an employer terminate the employee’s job with your company, you have to pay all of their wages owed, including accrued vacation at the time of their termination. If an employee, who doesn’t have a contract for working a specific length of time, after giving you 72 hours or more of notice, quits their job on the day specified in the notice, you also have to pay them their remaining wages and vacation accrued the same day. However, if the employee doesn’t give you 72 hours of notice, you have 72 hours from the day they quit to pay them or send them their check.
This is just a brief overview of the California Labor Laws. There are many more variations of these laws depending on the type of job and agreements made. Make sure to consult the Labor Law Website for more specific information.
THere are a lot of laws and regulations surrounding Payroll for your employees. Check out our Free Payroll Guide.