For California employers on a biweekly payroll, 2026 includes 27 pay dates. A calendar quirk that surfaces every 11 to 12 years will lead some emFor California employers on a biweekly payroll, 2026 includes 27 pay dates. A calendar quirk that surfaces every 11 to 12 years will lead some employers to issue a 27th paycheck in 2026. Specifically, employers that ran their first biweekly payroll of 2026 on Friday, January 2, 2026, will find that the year’s final paycheck falls on Thursday, December 31, 2026, because the regular Friday payday lands on New Year’s Day and must be advanced to the preceding business day.
Legal Bottom Lines (California)
- An exempt employee must receive the full salary for any week in which any work is performed. This means employers cannot withhold or skip the 27th paycheck for exempt employees.
- California payment timing and wage statement rules still apply. Employers should maintain designated paydays, and ensure each paycheck includes accurate itemized information and the inclusive pay period dates.
- If you change the per‑pay amount under Option 1 below, provide advance written notice (best practice: at least one pay cycle) and in a language employees understand.
This alert sets forth two options for maintaining compliance with wage and hour laws:
Option 1 — Recalculate to 27 Pays (Budget‑Controlled)
For employees who are paid an annual salary, employers can recalculate their annual pay over 27 pay periods. Beginning with your next payroll, take each employees’ annual salary, deduct the amount already paid in 2026, and divide that number with the remaining 2026 paychecks, taking into account the 27th payday. Each check will be slightly smaller, but the employee’s total 2026 pay remains equal to the stated annual salary. This option requires clear, advance communication, and employers should double‑check that the new per‑pay amount still meets minimum exempt thresholds (see below).
Practical February formula: (Annual Salary − Amount Already Paid in 2026) ÷ Remaining 2026 Paychecks = New Biweekly Amount
If opting for the recalculation option, consider using this sample language to provide notice to employees:
Employee Notice
Subject: Your 2026 Paychecks – Rare 27‑Pay Period Year
This year includes 27 biweekly pay dates due to the calendar. To keep your annual salary the same, beginning with the [DATE] paycheck we will calculate your biweekly pay as Annual Salary ÷ 27. Your per‑pay amount will be slightly smaller, but your total 2026 salary does not change.
Your benefit deductions (401(k), FSA/HSA, insurance) will be adjusted so you remain on track for your annual elections and IRS limits. If you have questions about your check or deductions, contact [CONTACT].
This change does not affect your exempt status or salary-basis; you will continue to receive your full salary in any week that you perform work.
Option 2 — Keep the Usual Biweekly Amount for All 27 Pays (Employee-Friendly)
Alternatively, employers can choose to continue paying the regular biweekly salary amount across all 27 pay cycles. Employees will receive more than their stated annual salary (about 3.85% more), which is administratively simple and generally well‑received, but has clear budget and benefits implications.
California‑Specific Compliance Pitfalls and Reminders
- Exempt salary thresholds (effective Jan 1, 2026): California’s statewide minimum wage for most employers increased to $16.90/hour in 2026. For the white‑collar exemptions, the minimum salary is twice the state minimum wage for full‑time work: $70,304/year ($1,352/week). Any recalculation must still satisfy this weekly floor.
- Salary‑basis integrity: Exempt employees must receive the full salary for any week worked. Do not “true‑up” by skipping a paycheck later in the year.
- Pay‑timing rules (Labor Code § 204 / DIR guidance): Weekly/biweekly payrolls are compliant if wages are paid within seven calendar days of the pay period close; maintain posted payday schedules and provide required notices.
- Benefits & deductions (caps and elections): Re‑allocate annual elections and employer deductions to avoid over‑ or under‑funding; HSAs should be apportioned across the number of pay dates consistent with plan terms.
- PTO and sick leave accrual math: If accruals are “per pay period,” 27 cycles may grant more leave than budgeted. Consider hourly accruals or adjust the per‑period rate in advance, consistent with your policy and applicable local ordinances.
- CBAs and offer letters: Some contracts specify per‑pay amounts or restrict mid‑year changes. Review and, if necessary, bargain or amend before implementing Option 1.
If you still have questions about compliance with the rare 27 paycheck year, please contact your Dinsmore Labor and Employment attorney.