An employer in California has an obligation to pay employee wages in a timely fashion. They must have regular pay periods and make payroll in a timely fashion with checks that don't bounce. They must pay employees at least the federal minimum wage.
If you are terminated or quit, an employer must pay you your wages and unused vacation pay on your last day of work or no later than 72 hours thereafter.
An employer may not engage in self-help remedies of deducting monies that they believe they are owed from a final paycheck. Employees denied these rights may be entitled to compensation for all hours worked for which they were not paid, plus penalties, interest and attorneys' fees.
Exempt Employees vs. Nonexempt Employees Under California Law
There are two types of employees in California: exempt and nonexempt. The term "salaried" has no bearing on these definitions and is often misunderstood by employees. It is not whether you are paid a salary (an annual sum calculated by multiplying your hourly wage by the expected number of hours worked, given a 40-hour anticipated work week), but whether you are classified as exempt or nonexempt that matters.
An exempt employee is defined under various state and/or federal laws. Generally, it is someone with a special skill or license such as a lawyer, doctor, accountant, engineer, etc. who is usually more highly compensated and works with limited supervision. Some assistants who assist the owner or most senior executives are exempt if they are paid at least a certain multiple of the minimum wage. Some employees may be only partially exempt, depending on how much of their time is spent on exempt versus nonexempt activities such as management versus production activities.
A nonexempt employee is generally lower-skilled and/or handles non-management functions and is involved in general production activities. Many intricate determinations are required to analyze whether someone is exempt, but generally, the rank-and-file employees are nonexempt or partially nonexempt and management employees and professionals are more likely to be exempt.
Exempt employees do not receive the benefit of overtime compensation and other benefits provided to nonexempt employees. Nonexempt employees are entitled to compensation for overtime hours and for missed lunches, etc., when the employer has reason to know that this time is being used for legitimate work activities.
Employers Record Keeping Obligation
Employees have an obligation to be honest with their employers about hours worked. They cannot hide the fact that they are working overtime form an employer and later sue, claiming that they have been denied their rights. They must follow company procedures and use available time-reporting systems to notify their employer that they are working overtime, through lunch, etc. An employer has an obligation to have a system in place to record time worked in excess of the standard eight hours per day, 40 hours per week (when overtime kicks in). Employees must use the system to be entitled to claim overtime. An employee who hides alleged overtime from an employer cannot later claim entitlement to compensation for secreted hours worked.
Employers are to provide a pay stub with each paycheck outlining the pay received so that employees can make sure they are being paid for the time worked. Employees should check their paychecks and make sure that they are being paid appropriately each pay period. Any discrepancies should be immediately brought to the attention of the employer so that any mistakes can be immediately corrected.
Retaliation for Wage and Hour Complaints
It is unlawful for an employer to retaliate against an employee who demands to be paid overtime if he or she is non-exempt.
An employer may not condition final payment of wages that are owed on the signing of a release of the employee's rights to sue the employer. However, if additional compensation is paid to the employee beyond the monies owed for hours which the employer was aware of the employee working, in exchange for a release, that release is binding based on the presence of additional consideration in exchange for the release of rights.