Wage Paydays and Pay Periods: The Law in California Explained

Most employees in California must be paid at least twice a month, on regular paydays that their employer designates in advance.⁠1 Wages earned between the 1^st and 15^th of a month are due by the 26^th of that same month, and wages earned between the 16^th and the end of the month are due by the 10^th of the following month.⁠2 When the job ends, final wages are due immediately if the employee is fired, or within 72 hours if the employee quits without notice.⁠3

There are, however, many exceptions to these rules. California is often considered a progressive state, with a relatively high minimum wage, strong protections for employees, and a general embrace of unions and collective bargaining. In keeping with this reputation, California has fairly strict laws concerning when, where, and how employers must pay employees.

This article takes a closer look at those laws as they relate to paydays and pay periods in California.

The Legal Background

Pay periods in California are controlled by both state and federal laws. On the federal level, the Fair Labor Standards Act⁠4 (commonly referred to as the “FLSA”) provides wage and hour rules that apply to businesses across the country.

California law, on the other hand, is spread between the California Labor Code and several regulations (called “wage orders”) that were adopted by California's Industrial Welfare Commission. Although that commission was defunded in 2004, its wage orders remain in effect, and they are enforced by the Labor Commissioner's Office.⁠5

California state laws usually offer more protection for workers than federal law. The minimum wage, for example, is significantly higher under state law than the minimum wage provided by federal law.⁠6

When two sets of laws conflict, employers must comply with the standard that provides the greatest protection to employees, regardless of whether it is federal or state law.⁠7 Because California law provides a higher standard than federal law, this article will focus on payday and pay period laws under California state law.

What Are “Wages”?

In California, a wage is any payment for labor performed by an employee for an employer.⁠8 Labor includes all work or services, not just physical labor.⁠9

All forms of compensation for work are wages, including:

• Hourly pay,
• A fixed salary,
• Commissions,
• Piece-rate payments, and
• Payment that varies by project or task.⁠10

The term wages also includes benefits that an employee receives as part of their compensation, including money, room, board, clothing, vacation pay, and sick pay.⁠11

When Regular Wages Must Be Paid

The Rule for Most Employees

Most employees must be paid at least twice per month on dates the employer has designated in advance.⁠12 These dates must be regular, and the employer is required to post a notice that shows the day, time, and location where employees can be paid.⁠13

Employers, of course, can choose to pay wages more frequently. But, no matter how often an employer chooses to pay their employees, they must comply with a few important rules:

• Any wages that are earned between the 1^st and 15^th day of any month must be paid on or before the 26^th of the same month, at the very latest.
• Any wages earned in the last half of the month must be paid on or before the 10^th day of the following month.⁠14

These deadlines fit employers that split each month into halves. Many employers instead run weekly or biweekly payrolls, or semimonthly payrolls covering different date ranges. Those schedules are also lawful, as long as the wages are paid within seven calendar days after each payroll period closes.⁠15

Employers must pay their employees even if they do not submit their timecard on time, although the wages will be limited to what the employer reasonably knows they owe.⁠16

If a payday falls on a holiday, and the employer's business is closed, then the employer is entitled to pay their employees on the following business day.⁠17

There are several exceptions to these rules, which are explained in more detail below.

Overtime and Unusual Hours

Overtime wages can sometimes be more difficult for employers to calculate than other types of wages. The same is true of all wages earned in excess of the normal work that an employee does.

As such, California law permits all wages earned for labor in excess of the normal work period to be paid on the payday for the next regular payroll period.⁠18

Exempt Employees

Employees who are classified as “exempt” under federal law are subject to slightly different rules.⁠19 An exempt employee is someone who occupies a job that is not subject to one or more sets of wage and hour laws.

In most cases, there are three simple requirements to determine whether a worker is an exempt employee under federal law:

• Minimum Salary. The employee must be paid a salary of at least $684 per week ($35,568 per year).⁠20
• White-Collar Duties. The employee's primary duties must consist of administrative, executive, or professional tasks.⁠21
• Independent Judgment. The employee's job duties must involve the use of discretion and independent judgment.⁠22

If all three requirements are met, the employee will usually be classified as “exempt.” There are, however, many caveats to this test, which can be read about in our article Exempt vs. Non-Exempt Employees: Guide to California Law.

If an employee has been correctly classified as exempt, they may be paid as infrequently as once per month.⁠23

That payment must occur on or before the 26^th day of the month. It must include the employee's wages for the entire month, including the portion between the 26^th day of the month and the end of the month that hasn't yet been fully earned by the employee.⁠24

If an exempt-classified employee is nonetheless entitled to overtime when they work more than 40 hours in a week, that overtime must be paid by the 26^th day of the next calendar month, unless a collective bargaining agreement provides a different rule.⁠25

In rare situations, employees who are exempt under California's wage orders, but who are not subject to the federal Fair Labor Standards Act, must be paid within seven days of the close of their monthly payroll period.⁠26

Of course, employers can always choose to pay exempt employees more frequently than once a month.

Unionized Employees

When employees are covered by a collective bargaining agreement that provides for different pay arrangements, those arrangements will usually override the pay periods explained above.⁠27 As such, unionized employees should consult their union's collective bargaining agreement to determine their pay schedules.

Sales Commissions

A commission is a type of compensation paid to a person for sales-related services they render. In a commission-based arrangement, the size of the employee's compensation depends on the amount or value of the thing that was sold.⁠28

Commissions from sales are a type of wage.⁠29 They are not owed to the employee, however, until they have been fully “earned.”⁠30

The conditions that must occur before a commission is earned are defined by the terms of the commission agreement.⁠31 Once those conditions have been fulfilled, the commission is considered a wage and the employer is legally obligated to pay it the same way they would any other wage.⁠32

As such, earned commissions are subject to the same rules as regular wages: most commissions must be paid, in full, at least twice per month on dates the employer has designated in advance, unless an exception applies.⁠33

Temporary Service Employees (Temps)

Temporary service employees (often called “temps”) are subject to slightly different rules than other employees.

A temporary services employee is someone who performs work for an agency that assigns them to perform services for different employers.⁠34 If the employee is assigned to work for the same client for more than 90 consecutive calendar days, these rules stop applying, unless the agency pays the employee weekly anyway.⁠35

Temporary service employees are generally entitled to be paid on a weekly basis.⁠36 In some situations, however, the employees are entitled to be paid on a daily basis, depending on the nature of their assignments.⁠37

Farm Laborers

Employees who work for a farm labor contractor must be paid at least once every week. That payday must fall on a business day designated in advance by the farm labor contractor.⁠38

The paycheck must include all wages earned up to and including the fourth day before the employee's payday.⁠39

Agricultural Workers

Employees who work in agricultural, viticultural, or horticultural pursuits are subject to special rules if their boarding and lodging are provided by the employer.⁠40 Their wages usually must be paid once per calendar month. That payday must include all wages up to the regular payday.⁠41

The employer must designate the employee's payday in advance. Two successive paydays cannot be more than 31 days apart.⁠42

Stock and Poultry Workers

Employees who work in stock or poultry raising are subject to special rules if their boarding and lodging are provided by the employer.⁠43 Their wages generally must be paid once per calendar month. That payday must include all wages up to the regular payday.⁠44

The employer must designate the employee's payday in advance. Two successive paydays cannot be more than 31 days apart.⁠45

Household Domestic Service Workers

Employees who work in household domestic services are subject to special rules if their boarding and lodging are provided by the employer.⁠46 Their wages generally must be paid once per calendar month. That payday must include all wages up to the regular payday.⁠47

The employer must designate the employee's payday in advance. Two successive paydays cannot be more than 31 days apart.⁠48

Car Salespeople

Most car salespeople earn a commission for the sales they make. Those commissions are subject to slightly different rules than other forms of payment.

If the employer is licensed as a vehicle dealer by California's Department of Motor Vehicles, car sales commissions must be paid once per month on a day designated in advance by the employer as the regular payday.⁠49

If, however, the car salesperson is subject to a collective bargaining agreement that provides for the date on which wages shall be paid, that agreement will usually control when wages must be paid.⁠50

Striking Employees

When one or more employees go on strike, their earned but unpaid wages must be paid on the next regular payday. Employers are not allowed to reduce or deduct from their paychecks due to the strike.⁠51

When Final Wages Must Be Paid

The timing of an employee's final wages depends on the circumstances of their discharge.

Terminations

When an employee is terminated by their employer, they are entitled to be paid immediately when the decision to terminate them is announced.⁠52

Resignations

When an employee suddenly quits, they are generally entitled to have their final wages paid within 72 hours of their resignation. If, however, they provide at least 72 hours of notice to their employer of their intention to quit, they are entitled to have their full wages paid immediately at the time of quitting.⁠53

An employee who quits without giving 72 hours of notice is entitled to have their final wages mailed to them if they request it and designate a mailing address. The wages are then considered paid on the date of the mailing.⁠54

Vacation Pay

California law regards a paid vacation as a form of wages.⁠55 Paid vacations are compensation for labor the employee performs, but the payment is delayed until the employee takes the vacation.⁠56

Employers are not required to offer vacation pay to their employees,⁠57 but they must follow certain rules if they do.

If an employment agreement includes paid vacations, an employee is entitled to be paid wages for unused vacation time that has vested at the time the employee's work ends.⁠58 The right to a paid vacation vests as the employee performs the work that entitles the employee to a paid vacation.⁠59

When employment is terminated, the employee is entitled to be paid for the portion of the employee's unused paid vacation that the employee has earned.⁠60

Certain Seasonal Employees

Employees who work seasonally and are laid off by their employer are sometimes not entitled to immediate payment when they are discharged.

If the employee is seasonally employed in the curing, canning, or drying of any variety of perishable fruit, fish, or vegetables, their employer is allowed a reasonable time to calculate the employee's final pay, up to a maximum of 72 hours after the layoff.⁠61

Employees in this situation have a right to have their final paycheck mailed to them if they request and provide an address for the employer to do so.⁠62

Movie Industry Employees

In California, Hollywood rules, so it's no surprise there are special laws for employees engaged in the production of movies.

Employees hired for a temporary job that relates to a specific movie production or broadcasting project are entitled to have their final wages paid at the next regular payday.⁠63 If the final wages are mailed, the wages are considered paid on the date the mailing occurs.⁠64

If, however, the employee is part of a union that provides for a different schedule of final payment, this rule might be a little different.⁠65

Live Theater or Concert Employees

Employees who work at a venue that hosts live theater or concerts are sometimes subject to different rules regarding final wages if they are subject to a union or collective bargaining agreement.⁠66 In those situations, the collective bargaining agreement will provide for the time limits that employers must abide by in terms of the employees' final wages.

To be eligible for the rules of that agreement, however, the employee must be the kind of worker that is routinely dispatched to employment through a hiring hall or other system of regular short-term employment.⁠67 Regular, long-term employees of live theater or concert venues are subject to the normal final wage rules.

Oil Drilling Employees

Employees who are engaged in the oil drilling business are entitled to have their final wages paid within 24 hours if they are laid off. If that 24-hour period ends on a Saturday, Sunday, or a holiday, the payment must be made on the following business day.⁠68

Additionally, oil drilling employees can request that their final wages be mailed to them. If the final wages are mailed, the wages are considered paid on the date the mailing occurs.⁠69

Where Final Wages Must Be Paid

As is the case with timing concerns, where an employee's final wages must be given will depend on the circumstances of their discharge.

Terminations

When an employer decides to terminate their employee, the employer must pay the employee at the location they were terminated.⁠70 In other words, employees are entitled to be paid on the spot when they are fired or laid off. This will usually be the jobsite.

This is true even if wages are normally directly deposited into the employee's account. Previously-authorized direct deposits terminate when an employee quits or is discharged, so final wages must be paid under the rules above, unless the employee has specifically authorized the deposit to continue and the employer meets the final-pay deadlines.⁠71

Resignations

When an employee quits their job, they usually must be paid at the office or agency of the employer in the county where the employee has been performing labor.⁠72

If, however, an employee who quits without giving 72 hours of notice requests that their final paycheck be mailed to them, the employer must send the wages to the address provided by the employee instead.⁠73

Failed Attempts to Pay

In the unusual case that an employer has attempted to pay an employee their final wages but has been unable to locate them, the employer can send the paycheck to the closest office of the Labor Commissioner, with an explanation of its efforts and as much information as possible.⁠74

The office will then attempt to contact the employee.⁠75 Failing that, the wages will be deposited in the state's unclaimed wages fund, and the employee can search for them through the State Controller's unclaimed property program (which is always worth checking to see if you have any unclaimed money).

How Wages Must Be Paid

Most employers pay wages by using a company check or a check issued by a payroll service from the employer's payroll account.

Employers are permitted to pay wages by means of a personal check or in cash,⁠76 but they are not permitted to make “under the table” payments. Whether wages are paid by cash or by check, employers are required by state and federal law to withhold payroll taxes.⁠77

If the employer pays by check, that check must be negotiable and payable in cash, on demand and without any fee or discount, at an established place of business in the state.⁠78 The check must show the name and address of a place where the employee can cash it. If the check is drawn on a bank, however, the bank's address does not need to appear on the check, and the employee can cash it at any of the bank's places of business in California.⁠79

Employers are prohibited from paying their employees' wages with any coupon, card, merchandise, or other object if it is not redeemable for money.⁠80 And no fee can be charged to the employee to redeem it.

What Wage Statements Must Contain

All employees must be given a wage statement with each wage payment, regardless of whether the wages are paid by check or cash.⁠81 Among other things, the wage statement must show:

• Gross and net wages paid,
• The number of hours worked during the pay period,
• The number of pieces for which the employee is being paid (if the employee is paid a piece rate), and
• Any deductions made from gross pay (like payroll taxes).⁠82

Receiving Comp Time Instead of Wages

In some situations, an employee can choose to be paid in the form of paid time off, rather than being paid overtime.⁠83 This is sometimes referred to as comp time (or compensating time).

An employer cannot require an employee to take paid time off (compensating time or “comp time”) instead of being paid overtime.⁠84 But an employee may request comp time if all of the following conditions are met:

• The compensating time off is provided pursuant to a written agreement between the employer and employee (or the employee's union) before the performance of the work.⁠85
• The employee has not accrued more than 240 hours of comp time.⁠86
• The employee made a written request to the employer asking for compensating time off in lieu of overtime compensation.⁠87
• The employee is regularly scheduled to work no less than 40 hours in a workweek.⁠88

If any of these conditions are not met, the employee must be paid the overtime rate they would otherwise be entitled to under the law.⁠89

Compensating time must equal the overtime rate. In other words, if an employee is entitled to an overtime rate of time-and-a-half, the employee must be given an hour-and-a-half of paid time off for each hour of overtime that the employee worked.⁠90

Comp time is not available to every worker. It does not apply to employees who are exempt from the wage orders' overtime rules, and it is unavailable in several industries covered by specified wage orders.⁠91 Employers should also be aware that federal law only recognizes comp time for public-agency employees, so a private employer who follows California's comp time rules can still owe overtime under federal law to employees the FLSA covers.⁠92

Employer's Obligation to Keep Records

The employer must keep a copy of the employee's wage statement for at least three years.⁠93 Current and former employees have the right to inspect or receive a copy of those records upon request.⁠94 The employer must comply as soon as practicable, and no later than 21 calendar days after the request; if it fails to do so, the employee or the Labor Commissioner can recover a $750 penalty.⁠95

Having the right to inspect the employer's records helps employees make a claim for unpaid wages.

Consequences When Employers Violate the Law

Employees who have been underpaid may be entitled to several types of relief. Likewise, employers can face harsh penalties for failing to comply with their legal obligations. A few of those consequences are described below.

Waiting Time Penalties

If the employee was underpaid at the time the employment ends (i.e., because they were fired or they quit), they are entitled to a “waiting time” penalty.⁠96

The waiting time penalty consists of a full day of wages for each day that payment is delayed. The penalty continues to accrue for as much as 30 days after discharge, depending on when payment is fully satisfied.⁠97

The waiting time penalty is calculated by computing the employee's daily wage rate and then multiplying it by the number of days that payment is delayed, up to a maximum of 30 days.⁠98

This penalty, however, only accrues if the employer's failure to pay the employee was “willful.”⁠99 An act is willful, in this context, if the employer intentionally failed or refused to pay an amount they owed to the employee.⁠100

This doesn't mean that the employer had to act with a deliberately bad or fraudulent purpose in failing to pay their employee. Rather, they just have to fail to pay wages they reasonably should have known were due.⁠101

An employer's failure to pay wages is not willful if the employer has a good faith mistaken belief that wages are not owed.⁠102 But even if some of the wages are disputed in good faith, the employer is required to pay the employee any wages that are not in dispute (that is, what each agrees is owed at minimum).⁠103

Criminal Liability

In some cases, when an employer severely violates the wage or payday rights of their employees, the employer can be charged with a crime.

For example, it is a misdemeanor in California for an employer to require an employee to sign a settlement agreement or a waiver of their rights in exchange for wages that the employee has already earned.⁠104

Employers owe specific duties under the law, including a requirement to post a payday notice and to pay wages in accordance with the posted payday. Failure to do so can result in a misdemeanor charge.⁠105 An employee who believes their employer has taken advantage of them can contact a lawyer or the Labor Commissioner's Office (the Division of Labor Standards Enforcement) to determine the next steps to take.

Private Attorneys General Act (PAGA) Claims

In some cases, the employer fails to pay wages in full or on time and the employee continues to work for the employer. In these situations, the waiting time penalty doesn't apply.⁠106 Instead, the employer may be liable for statutory penalties.

If an employer fails to pay their employees' wages as required by law, they are subject to a civil penalty in the following amounts:

• First Violation. For any initial violation, the employer must pay $100 for each failure to pay each employee.⁠107
• Subsequent Violations. For each subsequent violation, or any willful or intentional violation, the employer must pay $200 for each failure to pay each employee, plus 25% of the amount unlawfully withheld.⁠108

The Labor Commissioner can recover these penalties from the employer. Since 2020, however, employees have also had the right to recover the late-payment penalty for themselves, as a statutory penalty, by filing a wage claim with the Labor Commissioner.⁠109 Alternatively, an employee can seek civil penalties by bringing a lawsuit under the Private Attorneys General Act (a “PAGA” claim), but they cannot recover both the statutory penalty and a PAGA penalty for the same violation.⁠110

An employee may bring a PAGA claim by filing a civil lawsuit against their employer.⁠111 To do this, however, the employee must first follow certain procedures, which are described in Labor Code sections 2698 through 2699.5.

If the employee wins, the court may award them 35% of the civil penalties due under the statute, plus reasonable attorney fees and litigation costs. The other 65% goes to the state.⁠112 Many attorneys take these kinds of cases on a contingency basis, without any upfront fees.

Enforcing an Employee's Rights

Retaliation is Prohibited

Employees who do not receive their payments in full and on time as required by law have a right to bring the issue to their employer's attention and request full compliance with their wage rights. Employers are legally prohibited from retaliating against employees who request the timely payment of their wages.⁠113

Employees are also protected from retaliation if they file a complaint with a governmental agency or a lawsuit in court alleging a violation of their wage rights.⁠114 This means that an employee cannot be punished, fired, or treated unfairly for exercising their rights.

If the employer takes an adverse action against the employee within 90 days of the protected activity, the law presumes that the action was retaliatory, and the employer must show a legitimate, nonretaliatory reason for it.⁠115 An employee who proves retaliation is entitled to reinstatement and reimbursement of lost wages and benefits, and the employer can face a civil penalty of up to $10,000 per employee for each violation.⁠116

Filing a Claim

Employees who believe they have been the victim of a payday or pay period violation have three basic options:

• By resolving the dispute informally with the employer,
• By filing a lawsuit in court, or
• By bringing an administrative claim for unpaid wages and penalties.⁠117

The procedure for filing an administrative wage claim is explained in our article How to File a Wage & Hour Complaint in California. Wage claims can be filed with the Labor Commissioner online, by email, by mail, or in person at a district office, and there is no fee to file.⁠118 The pros and cons of wage claims and civil lawsuits are also discussed in that article.

Of course, the best way to resolve a wage dispute will depend on the employee's specific situation. It's usually a good idea to get the opinion of a lawyer before deciding how to proceed.

Deadline to File

In many cases, it is important to act fast because claims based on unpaid wages can expire. This expiration period is called a statute of limitations. The applicable statute of limitations will depend on the type of claim the employee pursues.

In general, a claim or lawsuit must be filed within three years of the alleged violation.⁠119 If the employee is enforcing the breach of a written employment contract, the statute of limitations is four years.⁠120 Waiting time penalties that are sought together with the unpaid final wages share the same three-year period.⁠121 A PAGA claim, by contrast, must be brought within one year of the violation (plus the required notice period), and the employee must have personally experienced a violation within that year.⁠122

In some cases, litigants seek to extend the statute of limitations in their wage and hour claim by bringing the claim under California's Unfair Competition Law.⁠123 Those claims must be brought within four years.⁠124 It is usually better, however, to bring claims earlier, if possible, so as to avoid relying on this kind of claim in case it turns out to be inapplicable.