Paycheck Requirements in California
Under the California Labor Code, there are a number of pieces of information which must be present on all employee paychecks and/or wage statements. Any violation of these rules can result in a class action lawsuit with even seemingly minor violations proving to be costly. There fore it is extremely important to know exactly what must appear on the paychecks. The good nes is that once you have your template created you will have all of the information required, as long as you keep up to date on the Labor Code.
At present, the following items must be included:
- Total gross earnings.
- Total of hours of work (this is not needed for salaried employees).
- Total units of piece rate earned where applicable.
- All deductions.
- Total net earnings.
- Dates for which payment is being made.
- Employee’s name.
- The final 4 digits from the employee’s SSN.
- The employer’s name and registered address.
- All effective hourly rates and the total number of hours work completed at these rates.
- The details of at least one location in California where employer can cash their check as they must be available at banks which have one branch within the state
There are heavy restrictions on employers deducting debt repayments or damages from an employee’s wages. The employer is not permitted to deduct compensation from an employee’s wages to cover losses or damages due to the employee’s simple negligence. However, if gross negligence is proven then sufficient compensation can be deducted. The same applies to wilful misconduct or dishonesty. The employer must be able to proven that it is appropriate to make the deduction. Employers cannot make deductions to recover unpaid debts such as loans or wage advances unless the deduction is agreed in writing by the employee.
Notice to Employees
All employees must be issued with a written notice stating the following:
- The applicable hourly rate(s) of pay.
- The way in which wages are calculated, which might include commission, hourly rate and piece rate for example.
- The rate at which overtime is paid.
- The usual pay day.
- The employer’s name and address
If anything included in this written notice changes, then the employer must give notice to employees within one week of the changes. This is part of the Wage Theft Employment Act.
When an employee departs a company, most state laws say that they should be given their final paycheck on the next usual pay date following their departure. Californian law states that this must include all wages owed and any accrued vacation time that remains unused. Rather than waiting until the next pay date, this is due on the day of termination provided that this is involuntary on the employees part. If the employee is the one to terminate, then the rules are a little different. If more than 3 days notice is given then they should be given on the final working day. If less than 3 days is given, then the employee should be paid with 3 days of giving notice.