Payroll records are records that show the compensation information for all your employees. The California Employment Development Department (EDD) requires that records must provide a true and accurate account of all workers employed, no longer employed, on a leave of absence, and independent contractors.
What should be included in payroll records in California?
Payroll records for each California worker must include:
- Employee identifying information, including full name, address, date of birth, occupation and social security number
- Ages of any minors, documentation of their age, and proper records to show they’re entitled to work in California
- Date hired, rehired, or returned to work after a temporary layoff
- Last date services were performed for employees on leave of absence or no longer working for the employer
- Place of work (physical location)
- Hours worked, meal periods taken, applicable rate of pay per day, week, and pay period
- Actual compensation paid, including the dates and amounts of payment and the pay period covered; this should include the value of board and lodging or other non-cash compensation
- Itemized deductions
- Disbursement records showing all payments, including straight-time and overtime pay amounts
“These records are very important because a lot of times in the last couple of years, both the California Labor Commissioner and the federal Department of Labor have increased their enforcement efforts. What that means to you is: you’re getting a lot more knocks on your doors as employers from people in the investigation units. [They are] wanting to make sure that you’re complying with all of your recordkeeping and wage and hour laws.
“[W]hen the Department of Labor comes knocking on your door, these are the records that they’re going to be asking for. To show that you are complying with your wage and hour laws you want to make sure you have them, that they’re maintained properly, and that you go through and make sure that you are including all of the information that needs to be included.” Amber Grayhorse outlined in a recent CER webinar.
What should be included in itemized wage statements in California?
Part of the payroll record is the pay stub—also called an itemized wage statement. In California, there are 9 things the itemized wage statement must include:
- Gross wages earned
- Total hours worked (for non-salaried and non-exempt employees)
- Number of pieces/units earned and the applicable piece rate
- All deductions, shown by month, date, and year
- Net wages earned
- Inclusive dates of the pay period
- Name and last 4 digits of the employee’s social security number or employee identification number
- Name and address of the legal entity serving as the employer (this is especially important for any company doing business under another name; the correct information must appear on the wage statement)
- All applicable hourly rates in effect and the corresponding number of hours worked per rate during that pay period
As of July 1, 2013, itemized wage statements for temporary service employees in California must also include the rate of pay for each temporary service assignment and the total hours worked for each legal entity or subsidiary.
The above information is excerpted from the webinar “HR Recordkeeping in California: What to Keep, How to Store, and When to Toss.” To register for a future webinar, visit CER webinars.
Attorney Amber M. Grayhorse is a senior associate in the Los Angeles office of Nossaman LLP. Grayhorse has significant experience advising employers on a wide range of employment-related matters and litigating employment disputes in state and federal courts.