Many employees cash their weekly paychecks without a second thought, trusting that their employers are treating them fairly. However, there are several ways that business attempt to hold back small amounts from employees in order to maximize their profits—and illegal payment methods are unfortunately common.
Legal Ways Employers May Pay Employees in California
Your employer is required to provide payment in a form that can be readily exchanged for cash and deposited at bank or savings and loan. If payment is given in a check, the employer must legally include a detailed paystub outlining the employee’s hours worked and pay rate.
Your employer may be in violation of the law if you are paid in:
- Cash. While it is not illegal to pay employees in cash, it can open an employer up to a number of legal actions. First, employers are required to provide accurate paystubs to California workers who are eligible for overtime, even if they are paid in cash. Also, paying a worker in cash can be a red flag that the worker is being paid “under the table,” meaning that the wages have not been reported on the employer’s payroll taxes. This practice is illegal, and can easily lead to IRS penalties and potential wage and hour claims.
- Coupons. Your employer cannot pay you in any method that cannot be redeemed for cash. Coupons for discounts, goods, or services are not acceptable forms of payroll.
- Vouchers. Employers cannot pay employees with any method that is subject to a service charge, such as a money order, payment voucher, or any method that requires a deduction from the full amount of the employee’s pay.
- Direct deposit. There is no law requiring businesses to offer direct deposit. However, if direct deposit is offered, it must be available to all employees, and employers cannot force employees to enroll in direct deposit rather than receive a paper check. Also, funds must be transferred to a financial institution of the employee’s choosing; employers cannot choose the bank where the funds are deposited. Even if funds are directly deposited, employers must still provide accurate paystubs outlining rates and deductions.
If your employer is violating wage and hour laws, you could be owed thousands of dollars in penalties and back payments. Please feel free to browse our articles to find out more about your wage and hour claim.
Pay Stub Violations
What we see time and again is California companies violating Caifornia's pay stub laws. The purpose of these laws is so you can accurately determine whether you are getting all the wages that you are owed and that you earned. These aren't "technical" violations. Companies violate the pay stub rules in an attempt to steal wages. We see it time and again.