5 “California Paycheck Laws” That Workers Need to Know

The state of California has numerous laws and regulations that govern how and when paychecks are to be issued. You should be aware of five key rights:

1. what your pay stub has to include,
2. when you are entitled to your wages,
3. your rights to examine your payroll records,
4. what has to be included in your final paycheck, and
5. when employers can make deductions from your wages.

1. Information that must be included in your pay stub

Under California Labor Code section 226(a), all pay stubs must include the following itemized information:

• your name,
• your identification number or the last 4 digits of your Social Security Number,
• your name and address,
• the dates of the pay period in question, which are read to be inclusive,
• the number of total hours worked,
• how many of those hours worked were entitled to overtime pay,
• the hourly rate of pay and the number of hours worked at each rate,
• gross wages earned,
• any deductions from the gross wages, and
• your net wages earned.¹

Information regarding the number of hours you worked does not have to be provided if you are an exempt employee.

If you get paid on a piece-rate basis, the pay stub has to show the:

• piece rate, and
• the number of units earned.²

This information must be included on all pay stubs, even if you are paid in cash.³

Note that your employer does not need to provide you a paper pay stub as long as you can view it through the company’s portal online. This is typical if you are being paid through direct deposit to your bank account.

Employer penalties

If your employer does not provide a pay stub or if some of the information is missing or inaccurate, you may be able to file a wage and hour lawsuit. You may be entitled to:

• $50 for the initial pay period affected by the errors and $100 for each subsequent pay period, up to $4,000,
• court costs, and
• attorney’s fees.⁴

However, recent changes to the law give California employers an opportunity to correct the errors.⁵

2. How frequently wages must be paid

If you are a non-exempt worker, California paycheck laws require your employer to pay you no less frequently than twice a month. Your employer must tell you the specific day during the workweek when you will be paid.⁶ These paydays must comply with the following 2 rules:

1. money earned between the 1st and the 15th day of the month must be paid by the 26th day of the month, and
2. money earned during the last half of the month must be paid before the 10th day of the following month.⁷

If you are an exempt worker, however, you can be paid once per month. However, your entire wages for the pay period must be paid on or before the 26th day of the month.⁸

All regular wages must be paid within 7 calendar days after the close of the pay period.⁹ Any overtime payments must be made by the next regular payday.¹⁰

Payment of wages can be made using:

• cash,
• check, so long as there is no discount or a fee, or
• with your consent, using a direct deposit into a financial institution of your choice.¹¹

Final paychecks

If you are fired or laid off from your job, you must be paid immediately at the time of termination. If you quit or voluntarily resign, it will depend on how many hours notice you gave your employer:

• if you gave more than 72 hours of prior notice, you are entitled to your final paycheck on your last day of work, while
• if you gave less than 72 hours of notice, your employer must pay your final wages within 72 hours of your resignation.¹²

3. You have a right to examine your payroll records

California Labor Code 226 also gives you the right to review your payroll records and wage statements.

Employers are legally obligated to preserve these documents for at least 3 years under California paycheck laws.

As a current or former employee, you can file a request with your employer to review your payroll records. This request can be oral or in writing. After receiving this request, the employer has 21 days to allow for the inspection. You can also request a copy of these records. If you ask for a copy, your employer can charge you reasonable copying costs.¹³

If your employer fails to provide the requested records, it is an infraction that carries a $750 penalty.¹⁴

4. What has to be included in your final paycheck

In California, your final paycheck must include all of the wages that you have earned including commission and meal or rest period premiums. Because California law considers paid and accrued vacation time as a form of wage,¹⁵ you are also entitled to a cash out for any unused vacation days in your final paycheck.

However, not all paid time off (PTO) is a form of wage in California. You are not legally entitled to cash out unused sick days in the state (unless your employer’s policy states otherwise). If your employment contract or collective bargaining agreement says otherwise, though, then you can collect compensation for unused sick time.

Employer penalties

If your final paycheck is not provided quickly enough, your employer can face a waiting time penalty equal to your daily average wage for each day that the check is late, up to 30 days.

Example: Mario’s final paycheck is late 35 days. His average daily wage is $100. Therefore he is entitled to a waiting time penalty of $3,000 ($100 times 30 days).

You can also bring a Private Attorneys General Act (PAGA) claim against your employer. Of any civil penalties paid by your employer, 65% goes to the state, and the rest goes to the aggrieved employees.)

5. When employers can make deductions from your wages

Under California paycheck laws, your employer can only deduct or withhold wages from your paycheck if doing so is:

• required by a state or federal law, or the law empowers your employer to do so, or
• pursuant to your written authorization, or an authorization by your collective bargaining agreement, to cover health insurance premiums or contributions to other employee benefit plans.¹⁶

This means that the following deductions are unlawful:

• all or any portion of your tips or gratuities,¹⁷
• the costs of a work uniform, unless you consent, in writing, to a deduction from your final paycheck if the uniform is not returned,¹⁸
• losses to your commission pay from unidentified returns after you leave work,¹⁹ and
• costs from a medical or physical examination that was taken as a condition of employment.²⁰

How do I recover my unpaid wages?

File a wage claim with the California Labor Commissioner. They have a protocol for trying to get your wages paid, such as through a settlement conference and possibly a hearing resulting in a court judgment against your employer.

Alternatively, you can file a lawsuit in Small Claims Court to recover your unpaid wages.

Additional reading

For more on California paycheck laws and related topics, refer to our informational articles:

• What happens if my employer in California pays me late? – Waiting time penalties.
• Employment records request – How to make one – These requests must be made in writing, whereas payroll records can be requested orally.
• Sample Demand Letter for Unpaid Wages in California – What you should say and how.
• California Termination Laws – 5 That Every Worker Should Know
• Termination of Employment – When is an employer required to pay out final wages in California?
• California Resignation Law – Do I have to give 2-weeks notice?

---