Compensation pros know wage and hour isn’t simple. The fed’s rules are complicated enough, and then add California’s twists and employees’ shenanigans, and you’ve got a challenging job.
But it’s often the basics that get done wrong—people have misconceptions, they get used to doing things their way, no one seems to care, and the years go by. Until someone chats with a lawyer. Then it’s expensive class action time.
Here are some of the most commonly ignored rules for wage and hour in California.
Two Regular Paydays per Month
In California, wages, with some exceptions (see table below), must be paid at least twice during each calendar month on the days designated in advance as regular paydays.
The employer must establish a regular payday and is required to post a notice that shows the day, time and location of payment.
Wages earned between the 1st and 15th days, inclusive, of any calendar month must be paid no later than the 26th day of the month during which the labor was performed, and wages earned between the 16th and last day of the month must be paid by the 10th day of the following month.
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Other payroll periods such as weekly, biweekly (every two weeks) or semimonthly (twice per month) when the earning period is something other than between the 1st and 15th, and 16th and last day of the month, must be paid within seven calendar days of the end of the payroll period within which the wages were earned.
Payment of Overtime
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. An employer shall be in compliance relating to total hours worked by the employee if the overtime hours are recorded as a correction on the itemized statement for the next regular pay period and include the dates of the pay period for which the correction is being made.
Final Pay When Discharged
An employee who is discharged must be paid all of his or her wages, including accrued vacation, immediately at the time of termination.
Exceptions exist for:
- A group of employees who are laid off by reason of the termination of seasonal employment in the curing, canning, or drying of any variety of perishable fruit, fish or vegetables
- An employee engaged in the production of motion pictures
- An employee engaged in the business of oil drilling
- Certain employees who are employed at a venue that hosts live theatrical or concert events
More detailed information about these employment situations may be found at http://www.dir.ca.gov/dlse/FAQ_Paydays.htm.
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Final Pay When Employees Resign
Payment of final wages is strictly outlined and sometimes difficult to manage:
An employee without a written employment contract for a definite period of time who gives at least 72 hours prior notice of his or her intention to quit, and quits on the day given in the notice, must be paid all of his or her wages, including accrued vacation, at the time of quitting.
An employee without a written employment contract for a definite period of time who quits without giving 72 hours prior notice must be paid all of his or her wages, including accrued vacation, within 72 hours of quitting.
An employee who quits without giving 72-hours prior notice may request that his or her final wage payment be mailed to a designated address. The date of mailing will be considered the date of payment for purposes of the requirement to provide payment within 72 hours of the time of quitting.
Penalties for Failure to Pay on the Required Day
An employer who willfully fails to pay any wages due a terminated employee (discharge or quit) in the prescribed time frame may be assessed a “waiting time” penalty. The waiting time penalty is an amount equal to the employee’s daily rate of pay for each day the wages remain unpaid, up to a maximum of thirty (30) calendar days.
In tomorrow’s Daily, more on payday rules, and an introduction to an extraordinary compensation management program just for California employers.