Pay on Time or Pay More

“I’m low on money and would prefer to pay my employees a week late. They say they’re okay with it.”

Your HR Survival Tip

Paying late is not a legal option. If you don’t think you’ll be able to pay employees in full AND on time, have them stop working immediately. California is very clear and very protective about employees being paid in full and at exactly the same time every pay period.

Here are a few of the rules:

• The employee must receive their pay within 7 days of the time worked. For example, if you are paying every 2 weeks, you only have 7 calendar days after that 2-week period ends to get a check AND wage statement (pay stub) into their hands.
• If you are using semi-monthly pay periods (twice per month) of 1-15 and 16-the last day of the month, the latest you can pay is the 26th and 10th, respectively. If your semi-monthly pay periods are on another schedule, such as 10-26 and 27-9, you must pay within 7 calendar days.
• You are required to post your payday and the rules about it. If the payday falls on a Saturday, Sunday, or Federal holiday, you may pay the next business day. However, you need to state what your policy is… you can’t fluctuate from month to month.
• If an employee has failed to turn in a timecard, you must pay for the scheduled time and then reconcile it later.
• Overtime from one pay period may be paid in the next pay period, assuming you were unaware they worked it.

Penalties for a late paycheck can be very costly. The first violation is $100 per employee in penalties. The second and subsequent violations will cost you $200 per employee, plus 25% of the wages due. Plan ahead so you don’t end up with a claim before the Labor Commissioner’s Office.