Pay Now or Pay Later

“I have an employee who is always late with his timecard. Is it okay to pay him on the next pay period?”

Your HR Survival Tip

California has laws in place to ensure your employees are paid fully and on time. In addition, the state holds your company fully responsible, regardless of what your employee does or doesn’t do.

No or Late Timecard — The state believes you, as the employer, should know when your employee was scheduled to work and, therefore, should know how many hours to pay the employee for that pay period… even if the employee doesn’t submit a timecard or submits it late. You are legally obligated to pay the employee on the established payday for the true or scheduled time worked.

Incorrect Timecard Hours — If the hours are wrong, you are still obligated to pay for the hours submitted (or scheduled, if there is no timecard) on or before your official pay date. Only overtime hours that were submitted late (and that the company didn’t know about) may be paid on the next pay date.

Pay Dates — California has no leniency for late payment of wages. You must pay employees on a date you have noted on your employment law posters, Employee Handbook, or other documentation. This date must be within the legal boundaries. Although there are some exceptions, you must pay employees within seven days after a work period is complete. For example, if you pay every two weeks (biweekly) and the work period ends on a Friday, you must pay employees for those work hours within seven days (on or before the following Friday).

Holidays and Pay Dates — You are allowed to choose to pay employees the workday before or workday after a holiday when the official pay date falls on a holiday… as long as it is still within the seven days allowed. This, too, is published and not changed randomly.

Final Pay — When an employee is leaving your company for any reason, they must receive their final paycheck on or before that final day. If the employee departs without 72 hours’ notice, you get only 72 hours (3 calendar days) to get them the final paycheck. Direct deposit will usually be later than this so know how to create a live, manual check through your payroll system.

California shows no mercy if you’re not paying employees in accordance with the laws. A missed or late payday has a penalty of $100 per employee the first time. Subsequent penalties include $200 per employee, plus 25% of the late payroll. In addition, the Labor Commissioner can issue a stop-work order against the company, levies against your company bank accounts, and liens on real and personal property. Anyone acting on behalf of the company, such as an owner, officer, or director, can be held personally liable. Yes, the state is really serious about this so don’t treat those pay dates as movable targets.

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