California Payroll Rules

Frequency of Payments

You must pay employees at least twice per month on days designated in advance as regular paydays.

If you pay your employees semimonthly, then any wages earned between the 1^st and the 15^th of the month must be paid by the 26^th of the month. Any wages earned between the 16^th and the last day of the month must be paid by the 10^th of the following month.

If you do not pay your employees semimonthly, then wages must be paid within seven (7) calendar days after the end of the pay period.

If an employee is entitled to overtime pay, then you must pay their overtime pay no later than the payday for the next regular pay period. In other words, if you pay your employees semimonthly and an employee earns overtime between the 1^st and 15^th, then you must pay them overtime pay by the 10^th of the following month with their regular pay that was earned between the 16^th and the last day of the month.

Manner of Payments

You may pay your employees by cash, check, or direct deposit.

Payment Upon Separation

If you discharge an employee for any reason, you must pay them at the time of termination.

If an employee quits or resigns voluntarily and gives at least 72-hours notice, then you must pay them at the time of departure.

If an employee quits or resigns and does not give at least 72-hours notice, then you must pay them within 72 hours.

If an employee is suspended or resigns due to a labor dispute (like a strike), then you must pay them by the next regular payday.

If you lay off an employee because it’s the end of their seasonal employment in curing, canning, or drying of perishable fruit, fish, or vegetables, then you must pay them within 72 hours.

If the employee is laid off from an oil-related business, then you must pay them within 24 hours (excluding weekends and holidays).

Deductions

You may only deduct or withhold amounts from an employee’s paycheck if

• you’re required or empowered to do so by state or federal law;
• the deduction is expressly authorized, in writing, by the employee to cover
  • insurance premiums,
  • benefit plan contributions, or
  • other deductions not amounting to a rebate on wages; or
• the deduction is to cover health, welfare, or pension contributions, which are expressly authorized by a collective bargaining agreement.

You cannot deduct the following:

• any portion of gratuities;
• the cost of any photograph of the applicant or employee, if you require the photograph;
• the cost of a bond, which you require of an applicant or employee;
• the cost of a required uniform, unless the employee has given written consent to have the cost deducted (if the uniform is not returned to the employer);
• the cost of any required tools or equipment, unless the employee earns at least twice the minimum wage; and
• any expenses or losses incurred because of the discharge of an employee’s work duties.

You may deduct cash shortages, breakage or loss of property, and dishonored checks if it can be shown that the issue was caused by

• a dishonest or willful act, or
• the gross negligence of the employee.

Uniforms & Other Required Equipment or Tools

You cannot require an employee to purchase required uniforms or equipment.

However, you can require an employee to purchase hand tools and other equipment customarily used in their industry, if they earn at least twice the minimum wage.

Pre-Hire Medical, Physical, & Drug Tests

You cannot require an employee to pay for the cost of any pre-hire exams.

Notice of Wage Reduction

There are no laws dictating whether you have to notify an employee about a wage reduction.

Paystubs

You must supply each employee with a paystub each payday. The paystub must include:

• gross wages earned;
• hourly rates and the number of hours worked at each rate;
• total hours worked, except for an employee whose pay is entirely based on salary and is exempt from overtime pay;
• number of piece-rate units earned, if the employee is paid on a piece-rate basis;
• all deductions;
• net wages earned;
• beginning and ending dates of the pay period;
• name of employee and at least the last four (4) digits of their social security number; and
• name and address of the employer.

Recordkeeping

You must keep payroll-related records for at least three (3) years.

Notices

You must post (and keep posted) in a conspicuous place a notice specifying the regular paydays and time and place of payment.