Forms and Recordkeeping

 

Forms and Recordkeeping

 

Forms and Recordkeeping

Notice of Pay

At the time of hiring a new California employee, employers must provide to each employee a state-mandated written notice Click here to see example , in the language the employer normally uses to communicate employment-related information to the employee, containing specific information, including the employee’s rate and basis of pay, the employee’s regular payday, the employer’s name and address, and the employee’s right to accrue and use paid sick leave without retaliation from the employer. Failure to provide the notice may result in an assessment of penalties.

Wage Statements

At the time of paying wages, Nevada employers must provide their employees with an itemized list showing all deductions made from the employee’s wages for that pay period. There are also additional requirements for maintaining payroll records and making them available to an employee upon request.

In California, however, the law is very specific regarding the categories of information that must be included on each pay stub, including, for example, the gross and net wages earned, all applicable hourly rates, the total hours worked by the employee, all deductions made, and the name and address of the legal entity that is the employer. Click here to see example.

Any inaccurate or omitted information on the pay stubs can expose a California employer to hefty penalties following expensive litigation, including civil penalties under the PAGA statute.

On June 29, 2020, the California Supreme Court issued two opinions in the companion cases of Ward v. United Airlines and Oman v. Delta Air Lines, in which the Court provided a new test for determining when an employee working across state lines is entitled to receive California law-compliant wage statements. The test, which the Court called the “principal place of work rule,” is primarily based on where the employee spends the majority of work time over the course of the applicable pay period. For more information on the principal place of work rule, visit the Sutton Hague Law Corporation blog here.

Accrued Paid Time Off, Vacation Pay, and Sick Leave

In California, paid time off accrued under an employer’s vacation pay or similar program is considered a form of wages, which vests as it is earned. This means that once any paid time off is accrued, it cannot be forfeited by the employee, and so-called “use it or lose it” policies are prohibited. In contrast, Nevada law generally permits the “use or lose it” approach, except for mandatory PTO provided pursuant to Nevada Senate Bill 312, passed during the 2019 Legislative Session, for which annual carry-over must be permitted if the PTO is provided under the accrual method.

Accordingly, California employers must keep accurate records of all accrued PTO or vacation time, ensuring that all accrued time is either used by the employee or paid out at the employee’s regular rate of pay.

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