As an employer, you have certain obligations to your employees. You need to maintain a safe workplace environment, provide a harassment-free workplace and properly compensate them for the time and labor they provide your company. Federal and California state laws establish your obligations and the rights of the people you employ.
When employees believe that you have failed to pay them in accordance with federal or state laws, they could potentially bring a claim against your company. Common wage claims involve failing to pay minimum wage.
Sometimes, wage claims arise because of inappropriate company policies. Other times, they are due to misunderstandings and mistakes. What are the rules about wage claims in California?
Employees have to bring a claim in a timely manner
You have an obligation to maintain time clock and payroll records for your workers or at least two or three years, depending on the kind of record it is. That federal record-keeping requirement overlaps nicely with California wage claim rules. There is a statute of limitations that applies to wage claims brought against companies in California, which means you don’t have to worry indefinitely about a worker asking for additional compensation after cashing their paycheck.
When workers want to claim unpaid wages or denied overtime compensation, they typically have to bring such claims against their current or former employer within three years of the alleged violation. However, sometimes, workers can have longer to make a claim.
In circumstances where a worker alleges a wage issue not because of a law violation but because of the violation of their employment contract, are they may have up to four years to bring a claim. Claims involving an oral promise to pay more than minimum wage must arise within two years of the violation, and California restricts claims about bounced payroll checks to only one year.
Understanding the statute of limitations may make it much easier for your company to push back against a questionable wage claim brought by a former or current employee. Learning more about your rights and obligations as a California employer will help you avoid reputation-damaging and expensive litigation brought by your workers.