5 California Labor Laws That Affect Payroll Calculations


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Payroll processing can be complicated, especially when you consider the many employment laws that impact the way wages, benefits, and taxes are calculated. If you are handling your own payroll processing, then it’s important to stay current with the latest laws and regulations on both a federal level and the laws here in the state of California. Or, you can hire an experienced payroll team to take care of the details, freeing up your time to focus on other aspects of your business.

Mark Rowley, Owner
RandR Payroll Services

Here are a few of the labor laws that influence payroll processing:

  1. Minimum Wage: The state of California requires that employers with more than 25 employees pay at least $12/hour, while employers with 25 or fewer employees need to pay at least $11/hour. Some cities have minimum wage laws, so check the local details based on where your business is located.
  2. Overtime Pay: Employees need to be paid overtime if they work more than 40 hours in a week, or 8 hours in a single workday. Overtime pay should be calculated at 1.5 times the regular pay. If an employee works more than 12 hours in a day, then they receive double-time pay.
  3. Sick Pay: When employees work for at least 30 days, employers are required to provide sick leave at the rate of at least 1 hour for every 30 hours worked. If the employee misses work due to health or illness, then this sick pay needs to be calculated into their paycheck.
  4. Vacation Pay: Additionally, the state of California requires PTO accrual, which means that employees must be able to save up PTO days that haven’t been used yet. Terminated employees must be paid the unused vacation time as part of their final paycheck.
  5. Last Paycheck: When an employee is fired, they must receive their last paycheck the same day. In case of resignation without 72 hours notice, employers have 72 hours to provide the final paycheck. You shouldn’t wait for the next payroll cycle.

Keep in mind that this is just an overview of a few main employment laws. Other laws might impact payroll processing as well, such as off-the-clock work, on-call pay, meal breaks, child labor restrictions, and more.

If you have questions about payroll processing, then R&R Payroll & Bookkeeping Services can help. Call us at (951) 296-0412.