Payment of Wages: California
Federal law and guidance on this subject should be reviewed together with this section.
Author: Vicki M. Lambert, The Payroll Advisor
- The term wages is broadly defined in California's wage payment law. See Definition of Wages.
- Under the California Wage Theft Prevention Act, employers must provide written notice of certain pay related information to nonexempt employees when they are hired and when the information changes. Additional requirements apply to certain temporary services employees. The intentional theft of wages by an employer from an employee or a hiring entity from an independent contractor is punishable as grand theft under the penal law. See Wage Theft Laws.
- California employers may pay employees in cash, by check or direct deposit so long as certain requirements are met. Electronic paycards may be permitted under certain circumstances. Noncompliance penalties are imposed for violations. See Wage Payment Methods.
- Different pay frequency rules apply to nonexempt and exempt employees, certain temporary services employees, and to payments of paid sick leave. Penalties are imposed for violations of the pay frequency rules. See Pay Frequency.
- Employers are either permitted to make, or prohibited from making, certain types of deductions from the wages of employees. Penalties are imposed for noncompliance. Qualified employers are required to facilitate employee contributions, through optional payroll deductions, to the state-run CalSavers individual retirement savings program. See Permitted and Prohibited Wage Deductions.
- With each payment of wages, employers must provide each employee with an accurate, itemized written pay statement in the form of a detachable part of a check or a separate written statement. The statement must itemize certain information. Additional requirements apply to piece-rate-basis and temporary services employees. Use of electronic pay statements may be permitted under certain conditions. Penalties are imposed for noncompliance. See Pay Statement Requirements.
- How soon an employee must be paid their final compensation, including unused vacation time, due upon termination depends on whether the termination is voluntary or involuntary. Penalties are imposed for noncompliance. See Termination Pay.
- The California Labor Commissioner may file a lien or levy against an employer's property to assist an employee in the collection of unpaid wages if there is a judgment against the employer. The Commissioner may file the lien or levy beginning 20 days after a judgment is entered. An employer may be personally liable for failing to comply with the lien or levy. See Lien to Recover Unpaid Wages.
- The California Department of Labor Standards Enforcement (DLSE) will not register or renew the business registration of an employer subject to the California Property Service Workers Protection Act (the Act) if the employer has not fully satisfied a final judgement for unpaid wages owed to an employee or former employee of a business that is required to be registered under the Act. See Property Service Workers Protection Act.
- After the death of an employee, employers must follow a very specific set of rules in order to properly turn over any compensation owed to the deceased employee's estate or survivors. See Deceased Employee Wages.
- Wages are considered abandoned property if they are unclaimed by an employee for one year. California requires employers to file two reports at certain times of the year when employee property is unclaimed. They also must send due diligence notices to employees with unclaimed wages. A permanent voluntary compliance program is in place that provides a waiver of interest on remittances of past-due unclaimed property that has not been reported if certain conditions are met. See Unclaimed Wages.
- Berkeley, Los Angeles, Mountain View, San Francisco and West Hollywood have requirements pertaining to payment of wages. See Local Requirements.