California Wage Payment Laws

Frequency of Wage Payments

In California, most employers must pay employees their regular wages, with some exceptions, 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. CA Labor Code 204

Wages earned between the 1st and 15th days of any calendar month must be paid no later than the 26th day of the month during which the labor was performed. Wages earned between the 16th and last day of the month must be paid by the 10th day of the following month.

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. CA Labor Code Section 204

Employers may pay employees who are executive, administrative, or professional employees under the Fair Labor Standards Act once per month on or before the 26th day of the month during which the labor was performed as long as the employers pay the entire month’s salaries, including the unearned portion between the date of payment and the last day of the month, at that time. CA Labor Code 204

An employer must pay overtime wages no later than the payday for the next regular payroll period following the payroll period in which the overtime wages were earned. An employer must comply with CA Labor Code Section 204(b), 226(a) 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. CA Labor Code Section 204(b)(2)

Some exceptions apply to these requirements. For more information visit the California Department of Industrial Relations website.

Manner of Wage Payments

An employer may pay employees by:

• cash (CA Labor Code 212)
• check payable on demand without discount or fee (CA Labor Code 212)
• with the employee’s consent, by direct deposit into an account at a financial institution of the employee’s choosing (CA Labor Code 213)

Direct Deposit

An employer may pay wages by direct deposit, so long as the employee has voluntarily consented to the deposit and the wages are deposited into a financial institution of the employee’s choosing. CA Labor Code 213 California employers cannot require an employee to receive payment of wages by direct deposit.

Payment upon Separation from Employment

Employees who are fired, discharged, or terminated

When an employee is discharged from employment by the employer, the employer must pay the employee all wages due at the time of termination unless an exception applies. CA Labor Code 201

Employees who quit or resign

If an employee quits and gives their employer at least seventy-two (72) hours notice, the employer must pay the employee all wages due at the time of quitting. If the employee fails to provide their employer with at least seventy-two (72) hours notice prior to quitting, the employer must pay the employee all wages due within seventy-two (72) hours after the time of quitting. An employee may request that their final wages be mailed to a designated address. The date of the mailing is considered the date of payment. CA Labor Code 202

Employees who are suspended or resigns due to a labor dispute (strike)

When an employee leaves employment as a result of a labor dispute, the employer must pay the employee by the next regular pay day. CA Labor Code Section 209

Employees who are laid off

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, must be paid within seventy-two (72) hours after the layoff. Payment shall be made by mail to any such employee who so requests and designates a mailing address therefor. CA Labor Code Section 201

An employee engaged in the business of oil drilling who is laid off must be paid within twenty-four (24) hours after discharge, excluding Saturdays, Sundays, and holidays. CA Labor Code Section 201.7

Special Motion Picture Industry Payment Requirements

An employee engaged in the production of motion pictures who is discharged, laid off, resigns, completes employment of a specified term, or is otherwise separated from employment and whose unusual or uncertain terms of employment require special computation in order to ascertain the amount due, must be paid by the next regular payday.

The payment of wages to employees covered by this section may be mailed to the employee or made available to the employee at a location specified by the employer in the county where the employee was hired or performed labor. CA Labor Code 201.5

Wages in Dispute

In case of a dispute over wages between an employer and employee, the employer must timely pay, without condition, all wages, or parts thereof, conceded by him to be due to the employee, leaving to the employee all remedies he might otherwise be entitled to as to any balance claimed. The employer may retain the disputed amount until the matter is resolved. CA Labor Code 206

Deductions from Wages

In California, an employer may not withhold or deduction wages from an employees paycheck, unless:

• required or empowered to do so by state or federal law,
• a 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 the employee’s wages, or
• a deduction to cover health, welfare, or pension contributions is expressly authorized by a wage or collective bargaining agreement.

CA Labor Code 221 and 224

An employer may not deduct any of the following from an employee’s wages:

• any portion of an employee’s gratuities. CA Labor Code 351;
• the cost of any photograph of an applicant or employee required by the employer. CA Labor Code 401;
• the cost of a bond required of an applicant or employee by an employer. CA Labor Code Section 401;
• the cost of a uniform required to be worn by the employee, unless the employee has consented in writing to have the cost of the uniform deducted from their last paycheck if not returned to the employer. CA Labor Code 2802, Industrial Welfare Commission Orders, Section 9. The term “uniform” includes wearing apparel and accessories of distinctive design and color.
• the cost of tools or equipment required to be used by an employee, except employees who earn two time (2X) the minimum wage may be required to purchase hand tools and equipment customarily used in a particular industry. CA Labor Code 2802, Industrial Welfare Commission Orders, Section 9;
• expenses or losses incurred in the direct consequence of the discharge of the employee’s work duties. CA Labor Code Section 2802;
• the cost of any pre-employment medical or physical examination taken as a condition of employment or any medical or physical examination required by any federal or state law or regulation, or local ordinance. CA Labor Code Section 222.5

California courts have also significantly restricted an employer’s ability to take an offset against an employee’s wages. Barnhill v. Sanders, 125 Cal.App.3d 1 (1981) (it is unlawful for an employer to deduct from an employee’s final paycheck a balloon payment to repay the employee’s debt to the employer even when the employee has authorized the payment in writing); CSEA v. State of California, 198 Cal.App.3d 374 (1988) (it is unlawful to deduct past salary advances that were in error from an employee’s wages); Hudgins v. Nieman Marcus, 34 Cal.App.4th 1109 (1995) (it is unlawful to deduct unidentified returns from commission sales from an employee’s wages.)

Cash Shortages, Property Breakage or Loss, Dishonored Checks

An employer may not deduct amounts from an employee’s wages due to a cash shortage, breakage or loss of property, or a dishonored check, unless it can be shown that the shortage, breakage, or loss is caused by a dishonest or willful act, or by the gross negligence of the employee. Industrial Welfare Commission Orders, Section 8; see also Kerr’s Catering Serv. v. Dept. of Indus. Rels., 57 Cal.2d 319 (Cal. 1962).

Uniforms, Tools, and Other Equipment Necessary for Employment

An employer may not require an employee to purchase a uniform or equipment required to be worn by the employee. The term “uniform” includes wearing apparel and accessories of distinctive design and color. An employee can consent in writing to have the cost of a uniform deducted from their final wages if the employee fails to return a uniform provided by the employer. CA Labor Code 2802, Industrial Welfare Commission Orders, Section 9.

An employer may not require an employee to pay the cost of tools or equipment required to be used by an employee, except employees who earn two times (2X) the minimum wage may be required to purchase hand tools and equipment customarily used in a particular industry. CA Labor Code 2802, Industrial Welfare Commission Orders, Section 9.

Pre-hire Medical, Physical, or Drug Tests

An employer may not require an employee to pay the cost of any pre-employment medical or physical examination, including a drug test, taken as a condition of employment or any medical or physical examination required by any federal or state law or regulation, or local ordinance. CA Labor Code 222.5

Notice of Wage Reduction

California does not have a law addressing when or how an employer may reduce an employee’s wages or whether an employer must provide employees notice prior to instituting a wage reduction. However, the California Dept. of Industrial Relations states that an employer must give an employee prior notice of a change in pay periods. Presumably, this notice requirement would apply to any reduction in wage rates as well. CA DIR FAQ. Moreover, a wage reduction can only be applied to hours worked after the change and cannot be applied to hours already worked.

Statement of Wages (Pay Stub)

An employer must provide employees on each pay day an itemized statement of earnings and deductions which includes:

1. gross wages earned,
2. total hours worked by the employee, except for any employee whose compensation is solely based on a salary and who is exempt from payment of overtime,
3. the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis,
4. all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item,
5. net wages earned,
6. the inclusive dates of the period for which the employee is paid,
7. the name of the employee and his or her social security number, (an employer is only required to show the last four digits of the employee’s social security number or an employee identification number on the itemized statement),
8. the name and address of the legal entity that is the employer,
9. all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee, and
10. if a temporary services employer, the rate of pay and the total hours worked for each temporary services assignment

CA Labor Code Section 226

Record Keeping Requirements

An employer must keep accurate payroll records, including wage deductions, on each employee for a minimum of three (3) years, and such records must be made readily available for inspection by the employee upon reasonable request. The employer must maintain accurate production records. CA Labor Code Section 226

Notice Requirements

An employer must post and keep posted in a conspicuous location at the place of work, if practicable, or otherwise where it can be seen as employees come or go to their places of work, or at the office or nearest agency for payment kept by the employer, a notice specifying the regular pay days and the time and place of payment. CA Labor Code 207