Many sections within California's labor code aim to protect workers and set expectations for employers. Regardless of a business' size, employees have certain rights regarding the payment they receive, including how employers must communicate payment. To properly document wages, employers must provide complete, accurate paystubs each time that the wages are paid.
In California, employers must generally include the following information on paystubs:
- The employer's name and address
- The employee's name and the last four digits of the employee's social security number or an employee identification number
- The beginning and end dates of the pay period
- All applicable hourly rates in effect and the corresponding number of hours worked at each hourly rate (unless they earn a salary and are exempt from overtime)
- The gross amount earned
- All deductions
- The net amount earned (i.e. the amount after deductions)
- Sick leave accruals and balances
The type of employment may also affect paystub and wage requirements. Employers should fully research their distinct legal obligations for paying employees.
Keeping accurate payroll records
California law requires employers to keep wage records for at least three years so that employees may access a copy of their information. As a practical matter, however, it may be advisable to keep such records for up to four years. When employers pay employees, they can efficiently make a separate copy of the wage statement for their own records. In addition to complying with the law, employers can refer to these records in the event of a wage dispute.
Filing payment records both physically and digitally can prevent accidental loss of this information. For digital payroll records, however, employers must keep this data protected and confidential.
The consequences of an incomplete paystub
Small business owners might prefer to write a simple check for employees at the end of the pay period. However, employees in California have a legal right to receive a fully compliant paystub in addition to their payment.
If a paystub does not contain all necessary information, the employer could face litigation and sizable penalties, regardless of whether or not the omission was intentional. A proactive approach to compliance can help employers avoid wage and hour disputes while keeping employees well-informed.