Employers nowadays are drowning in an ocean of paperwork that needs to be filed and maintained. The importance for employers to comply with section 1174 of the California Labor Code can’t be stressed enough. Under this section, accurate payroll records must be maintained for a period of three years. Not only do they need to be maintained for three years, but they must also be kept in the State of California at a central location where the employees work. Those records are to show the names and addresses of all employees over the last three years and the wages paid to them. They’re also required to show the number of any piece-rate units earned by and any applicable piece-rate paid to employees.
Franchisees
If you’re a franchisee, you must be particularly careful. Your payroll may come from another state, and appropriate records might be kept there too. The State of California can enter your company and demand to review any payroll records it is seeking upon request. You don’t want to be in here in California when the records are kept in New York. If you keep your own independent records, those may be sufficient for purposes of providing the appropriate information.
Penalties
California Labor Code section 1174.5 states that an employer who willfully fails to maintain proper payroll records is subject to a civil penalty of $500. Sloppy record-keeping isn’t a defense under section 1174 though, and matters won’t end with that civil penalty.
Whether you’re an employer or an employee, if you have questions or issues about compliance with section 1174 of the California Labor Code, contact our offices to consult with a knowledgeable and helpful employment law attorney.
Contact our California Labor and Employment Lawyers today.
