California Pay Stub Requirements That Business Owners Need to Know

California has a lot of ruled and guidelines in place when it comes to employee pay stubs. Because there are so many details that need to be placed on a paycheck stub it can be easy for an employer to miss a mistake that wasn’t caught by payroll.

It is highly convenient to let the payroll department take care of employee pay, but employers should check payroll documents. If documents aren’t checked and missing any of the information that is required then the company could face fines. Employers must abide by all California pay stub requirements.

Don’t get caught making mistakes that can be avoided. Follow this guide to help you figure out what happens when a pay stub requirement is left out of your stub. Trust us these are things you don’t want your employee pay stubs to be missing!

California Pay Stub Requirements

Employees must receive a pay stub that is an itemized wage statement. It has to show everything they are being paid for and how much of their salary goes towards taxes and retirement funds. A few items that have to be on a California pay stub are:

• Pay period beginning and ending date
• Employer’s name and address
• Employee’s full name and SSN/employee ID
• Hourly pay rate
• Total hours worked during this pay period
• Gross and net wages
• All wage deductions
• Sick pay wages & balance

The California pay statement requires all of the things listed above. If any of these items are missing the employer and the company can face huge consequences.

Fines

California enforces a harsh slap on the wrist when items are missing from an employee’s paycheck stub. When an employer forgets a piece of information on the employees pay stub, they can be hit with a class-action lawsuit. A lawsuit can happen even if the employer is not the one to blame for the mistake.

California law states that employees have the right to receive a stub letting them know what their pay is going towards and what they are receiving payment for. If these things aren’t provided to the employee legal action will take place.

If the mistake made is intentional then the fine begins around $50 and after that, any other violations will be $100. This should be done for every employee per pay period that a pay stub is messed up. The cap for fines is $4,000/employee and doesn’t include any legal fees.

Finding an Error

If you happen to catch an error before the payroll is processed fix it as soon as possible. This will keep the same problem from being replicated on multiple employee checks during that pay period. One thing that people may not realize is there is a charge for every line printed on a pay statement.

For every line that California requires on a statement, the employer and their company are charged for it. The majority of the mistakes made on pay stubs come from an employer trying to cut costs wherever they can. Costing trimming means cutting lines of the stub.

Complying with the pay stub requirements in California will keep you from heavy fines.

Monitor the Payroll

In order to make sure that you are in compliance with California requirements, the employer should keep an eye on the processed payroll. Make sure that the format you use to process payroll complies with everything that California has said you need to have.

Once the format is in place, you can continue to use it to process future payroll for other pay periods.

E-Statements

There are rules and regulations when it comes to providing pay stub statements electronically to your employees:

• Your employees should have the option to get their statements electronically or by paper
• All of the itemized things on the paper statement should also be included on the electronic statement
• Employees must be able to view their electronic statement on a personal or company computer
• Employers must allow employees to print their electronic statement for free

Itemized Sick Balance

All sick time that has been used, sick time that has been earned, and remaining sick time must be accounted for on the pay stub. The balance of the sick leave remaining and the sick leave that has been paid has to be reported for each pay period.

Qualifications

Any employees that have been employed and worked for more than 30 days can use sick time. This is the state law for all full time and part-time employees that the company has hired during the calendar year.

In order to determine how much time each employee is given, you can offer time-based on the hours they work or offer a set amount at the beginning of the year. For every 30 hours that an employee works they have to be given one hour of sick time.

Reporting and Paying Sick Time

Employers have to display the number of days of sick leave that an employee has on their pay stub. Your payroll or HR may use technology that helps to automatically calculate sick time that is remaining for an employee.

When you pay an employee sick time, it has to be paid at their hourly rate. However, when an employee quits you don’t have to pay any more sick leave to the employee. And if any employee doesn’t use any of their sick leave they can only carry 48 hours of sick leave to another period.

Check with Payroll

Now that you know that it can cost you up to $4000 per employee not including attorney cost we hope that you will start to take a little more interest in your payroll documents. Every time a mistake is made it costs your company money that can be used for other things.

You will be glad you took the time to make sure your formatting is the correct format and complies with California laws and regulations. Stop what you’re doing and go check to make sure that all of California pay stub requirements are being met by your company. Check with your payroll advisor right now!<