Are You Paying Your Employees Correctly?

As an employer, you may believe you are paying your employees correctly, but the reality is that many business owners, especially owners of small businesses, are doing it wrong. Employers in California need to be extremely careful in determining whether or not they are paying their employees correctly because California has stringent laws surrounding employee rights. For example, California strongly regulates how often employers must pay employees and when employers should make payments. Failure to adhere to the law usually comes with penalties. Read on to learn whether or not you are paying your employers correctly.

The Basics of Pay Frequency

In the United States of America, employers can pay employees weekly, bi-weekly, semi-monthly, or monthly.

• Weekly payroll – paying employees every week on the same day of the week for a total of 52 times a year.
• Bi-weekly payroll– paying employees every other week on the same day of the week, for a total of 26 times a year.
• Semi-monthly payroll – paying employees twice a month, for a total of 24 times a year.
• Monthly payroll – paying employees once a month, for a total of 12 times a year.

Generally, whether you need to pay your employees weekly, bi-weekly, semi-monthly, or monthly depends on the state in which you are conducting your business. Also, whether an employee is exempt or non-exempt will determine how often you need to pay them.

California Payday Laws

In California, employers must pay out wages to employees at least twice a month on the days designated in advance as regular paydays. According to California Labor Code Section 204, wages that an employee earns between the 1st and 15th must be paid on or before the 26th day of the same month. On the other hand, wages that an employee earns between the 16th and the last day of the month must be paid by the 10th day of the following month.

Suppose an employer pays employees weekly, bi-weekly, or semi-monthly, according to a different earning schedule other than the one mentioned above. In that case, they must pay employees within seven days of the end of the payroll period within which they earned the wages. For example, if you pay your employees after two weeks, you are abiding by the law if you make payments within a week after every two-week payroll period ends.

However, the law provides some exceptions for certain types of employees. For instance, exempt employees, such as professional employees, may receive their payments once a month or before the 26th day of the month if their entire salary is paid at that time.

If you violate any of the state’s pay schedule requirements, you could face penalties, including misdemeanor charges and fines. For an initial violation, you could be fined $100. And for any subsequent violation, you could be fined $200 and 25% of the amount withheld from the employee.

Contact Us Today

If you need help determining whether you have been paying your employees correctly, contact a skilled and dedicated employment lawyer San Diego at TencerSherman LLP. We are committed to providing professional legal assistance to employers in San Diego and throughout Southern California.