Payroll California, Unique Aspects of California Payroll Law and Practice
Posted: Friday, June 02, 2006
by Charles Read
Custom Payroll Associates, Inc.
California payroll has some unique aspects and conditions. Some of the details and laws are set out in this article including information concerning: tax withholding and reporting unemployment insurance taxes and reporting wage and hour laws and child support withholding.
The California State Agency that oversees the collection and reporting of State income taxes deducted from payroll checks is: Employment Development Department
888-745-3886 California requires that you use California form "DE 4A-4, Employee’s Withholding Allowance Certificate" instead of a Federal W-4 Form for California State Income Tax Withholding.
Not all states allow salary reductions made under Section 125 cafeteria plans or 401(k) to be treated in the same manner as the IRS code allows. In California cafeteria plans: are not taxable for income tax calculation are not taxable for unemployment insurance purposes. 401(k) plan deferrals are: not taxable for income taxes are taxable for unemployment purposes.
In California supplemental wages are taxed at a 6% flat rate, 9.3% for stock options and bonuses.
You are not required to file California State W-2s.
The California State Unemployment Insurance Agency is: Employment Development Department P.O. Box 826880 - MIC 94 Sacramento, CA 94280-0001
888-745-3886 The State of California taxable wage base for unemployment purposes is wages up to $7000.00.
California requires Magnetic media reporting of quarterly wage reporting if the employer has at least 250 employees that they are reporting that quarter.
Unemployment records must be retained in California for a minimum period of four years. This information generally includes: name social security number dates of hire, rehire and termination wages by period payroll pay periods and pay dates date and circumstances of termination.
The California State Agency charged with enforcing the state wage and hour laws is: The Department of Industrial Relations Division of Labor Standards Enforcement P.O. Box 420603 San Francisco, CA 94142-3660 The provision in the law for minimum wage in the State of California is $6.75 per hour..
The general provision in California State Law covering paying overtime in a non-FLSA covered employer is one and 1/2 times regular rate after an 8 hour day, 40 hour week in most industries. Check for other overtime rules and exemptions..
California State new hire reporting requirements are that every employer must report every new hire, rehire and contract who is paid over $600.00. The employer must report the federally required elements of:
- Employee’s name
- Employee’s address
- Employee’s social security number
- Employer’s name
- Employers address
- Employer’s Federal Employer Identification Number (EIN)
This information must be reported within 20 days of the hiring or rehiring or after $600.00 minimum is met or contract is signed whichever is earlier.
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The information can be sent as a W4 or equivalent DE34 by mail, fax or electronically.
There is a $24.00 to $490.00 penalty for a late report in California.
The California new hire reporting agency can be reached at 916-657-0529.
California does allow compulsory direct deposit but the employee’s choice of financial institution must meet federal Regulation E regarding choice of financial institutions.
California does not allow compulsory direct deposit California requires the following information on an employee’s pay stub:
Employee’s Name Pay rate Gross and net earnings Amount and purpose of deductions Hours worked or work done if piece work California State Wage and Hour Law provisions concerning pay stub information detail the following information must be on the paystub.
- Gross and net earnings
- Hours worked at each hourly rate for hourly workers
- Piece rate and number of pieces
- Deductions
- Pay period dates
- Employee's name and social security number
- Employer’s name and address
Deceased employee’s wages to a maximum of $5,000.00 must be paid to the surviving spouse or conservator when an Affidavit of right and proof of identity are presented.
Escheat laws in California require that unclaimed wages be paid over to the state after one year.
The employer is further required in California to keep a record of the wages abandoned and turned over to the state for a period of seven years.
There is no provision in California law concerning tip credits against State minimum wage.
In California the payroll laws covering mandatory rest or meal breaks are a 30-minute meal break after five hours 30 minutes after 10 hours 10 minute rest after four hours.
California law concerning record retention of wage and hour records is two years..
The California agency charged with enforcing Child Support Orders and laws is: Department of Child Support Services P.O. Box 944245 Sacramento, CA 95244-2440
916-654-1532 www,childsup,cahwnet.gov/default.htm California has the following provisions for child support deductions:
- When to start Withholding? 10 days after service
- When to send Payment? Within 7 days of Payday.
- When to send Termination Notice? When next payment is due
- Maximum Administrative Fee? $1 per payment.
- Withholding Limits? 50% of disposable earnings.
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Top-level comments on this article: (7 total)Yes, article was helpful. However, what if the employer does not pay you on the required pay date?
Almost, If the employer does not pay within the maximum allowable time, is there any kind of penalty awarded to the employee?
If your employer does not pay you on time you can get the wage and hour department on their case. But the most you as an employee are going to get is your paycheck.
I signed up to work 4 hours on a Xmas. On x-mass our system went down. We were not able to work. After 3 hrs, our boss call and said to leave. Should I get paid for the hours I worked or the 4 hours I signed up for. Can you please help me find doc. show what I should get paid for?
My payroll department deposited my electronic payroll check. They deposited $85.00 on February 5, 2008, but it was suppose to be $1400.00 for 28 hours of work. I called the payroll department and they said that they never got my time sheets from my department. I had a copy of each time sheet, to verify hours. They said they could not pay me sooner than the 11th of this months even though the pay date was Febraury 5th. Isn't there a law that they have to pay me withint 24 or 48 hours, or was that for employees who were being dismissed. I didn't think they could make me wait a week.
Good to see problems others have. What should employees do when they are scheduled for hrs. and new owners close for 3 days without notice. Do they owe employees mininum without tips?
My company is based in California, but I live in Nevada. Because the payroll laws are different in the 2 states, I would like to know which state law this company is required to follow.
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