California offers businesses incredible opportunities—if it were a country, it would have the 5th largest economy in the world. But for HR leaders, operating in the Golden State means dealing with notoriously complicated and ever-evolving labor laws. Failing to meet labor standards means heavy fines and the risk of class actions, so finding a way to get (and stay) compliant isn’t optional.
The good news is, Paycor offers HR leaders the technology and expertise to tackle these compliance challenges, whether at state, local or federal level. Our platform unifies time and attendance with payroll, which is important, since California labor laws cover everything from employee schedules to what’s written on paychecks.
The 5 California Labor Laws You Need to Know
Paycor’s dedicated compliance team keeps our product and our customers up to date with the latest regulatory changes. Let’s walk through some of the most important labor laws you’ll need to be aware of if you’re operating in California and how our system can help you stay on the right side of the law.
- Paycheck Laws
- California isn’t the only state to require that employers provide pay stubs (or “itemized wage statement”) to employees, but failure to do so accurately and in full can cost employers. There’s a long list of information that pay stubs need to provide to comply with California labor law:
- Employee name
- The final four digits of Social Security Number (SSN) or Employee ID Number (EIN)
- Name and address of the employer
- The start and end dates of the pay period
- Gross wages (without deductions)
- Total hours worked by the employee (for non-exempt employees)
- Breakdown of hourly rates for regular vs. overtime hours
- All deductions (tax withholdings, 401(k) contributions)
- Net wages earned (gross wages minus deductions)
- Amount of sick leave and vacation time accruedWhen wage statements are inaccurate or not provided at all, employers can be subject to fines starting at $50 per employee for a first offense and rising to $100 for further violations, up to a maximum of $4,000 per employee—or more, if an employee is deemed to have suffered damages. The Labor Commissioner can also impose a further civil fine of $250 per employee for a first violation and $1000 for further violations. Employers also need to be sure that:
- Employees are paid at least every two weeks
- Checks are received within 10-11 days of paydayIf employees quit, they must receive their final paycheck within 72 hours of giving notice, while terminated employees must receive their final paycheck, including wages and any accrued vacation, immediately upon termination. Employees are entitled to a full day’s salary for every day these final paychecks are delayed, up to a maximum of 30 days. How Paycor Helps: Full-Page Pay Stubs Paycor Payroll makes it easy to produce fully itemized wage statements which include all the relevant information required by California labor law and any industry-specific regulations. Rather than having to collect the data yourself, the process is automated, so you can always get your paychecks out on time and error-free, and store all wage statements for your records.
- Minimum Wage Laws
- The statewide minimum wage in California in 2020 is $13 per hour (or $12 for businesses with 25 or fewer employees), though many localities have higher rates—rising as high as $16.84 in Emeryville. These minimum wages apply to all employees, with a few limited exceptions. Unlike other states, tipped workers in California must also receive the full minimum wage from their employer. If you operate in multiple Californian cities, you’ll need to make sure that staff are never paid less than the minimum wage for where they are working. If you aren’t paying attention to what the law requires for hours worked, you’re opening yourself up to wage and hour lawsuits. How Paycor Helps: Minimum Wage Alerts Keeping track of all federal, local and state minimum wage laws is too important to be left to luck. Paycor Payroll will alert you if an employee is ever set to receive a wage lower than the minimum for the location in which they are working. These mistakes can easily happen if employees are regularly switching between roles in various cities, especially around the Bay Area. Create proper guardrails by setting minimum wage levels for individuals or department, and receive a notification if for any reason an employee’s pay rate is set below this.