Five payroll mistakes we see in California small businesses

Wage statements missing required items. California requires nine specific items on every pay stub, including all applicable hourly rates and hours at each rate. Many payroll platforms need this configured; it is not automatic.

Final pay late. An employee who is terminated must be paid everything, including accrued vacation, on the day of termination. Someone who resigns with 72 hours' notice must be paid on their last day. Waiting-time penalties run up to 30 days of wages.

Misclassified contractors. Under the ABC test most people who work under your direction, in your core business, are employees. A 1099 does not change that.

Meal and rest breaks not tracked. If a non-exempt employee works past five hours without a 30-minute unpaid meal break, you owe one hour of premium pay for that day. Tracking is what protects you.

Multi-state employees paid as if they were in California. A remote hire in Texas or Washington creates registration and withholding duties in that state from the first paycheck.

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