October 2021

State Updates

 

California high court addresses wage statement, pay timing rules for interstate workers

09/03/20

Author: ADP Admin/Tuesday, September 1, 2020/Categories: Compliance Corner , State Compliance Update, California

The California Supreme Court has established a test for determining whether interstate workers must be provided with a California-compliant wage statement and how the state's rules governing the timeframe for paying wages apply to interstate workers.


Background:

Under California Labor Code Section 226, employers must furnish an accurate itemized wage statement in writing to employees each pay period showing information, such as:

  • Gross and net wages earned
  • Total hours worked
  • The number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis
  • All deductions
  • The pay period covered
  • The name of the employee and the last four digits of their Social Security Number or employee identification number
  • The name and address of the employer legal entity
  • All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.

Timing of Pay:

Under California Labor Code 204, wages must generally be paid at least twice during each calendar month on the days designated in advance as regular paydays.

Wages Earned Between

Wages Due

The 1st and 15th of the month

No later than the 26th day of the month

The 16th to last day of the month

No later than the 10th of the following month

Note: Other payroll periods such as weekly, biweekly (every two weeks) or semimonthly (twice per month) when the earning period is something other than those above must be paid within seven calendar days of the end of the payroll period within which the wages were earned.


California Supreme Court Cases:

In two recent cases (Ward v. United Airlines, Inc. and Oman v. Delta Air Lines, Inc.), the California Supreme Court was asked to clarify whether Section 226 and Section 204 apply to airline employees who perform much of their work in airspace outside California's jurisdiction.

The court ruled that whether Section 226 and Section 204 apply to interstate employees depends on whether their principal place of work during the relevant pay period is in California.

This test is satisfied if the employee spends a majority of their time working in California during the relevant pay period. For pilots, flight attendants, and other interstate transportation workers who don't perform a majority of their work in any one state, this test is satisfied when California serves as their base of work operations. For the test, it doesn't matter if the employee lives in California, whether the employer is based in California, or whether a collective bargaining agreement governs the employee's pay, the court said.


Compliance Recommendations:

Employers with interstate employees who perform work in California should discuss the impact of the rulings with legal counsel. Please contact your dedicated service professional with any questions.

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Tags: 09/03/20

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