Legal Question in Business Law in California

Re: Payroll checks

The Uniform Commercial Code allows a bank to pay postdated checks unless the bank has recently and specifically been instructed by its customer not to pay a particular postdated check. So, the checks are probably going to be paid if presented early.

I could not find any other law relating to postdated checks or penalizing employees for violating a company policy regarding cashing of checks.

I can't say for sure that the company's penalty policy is legal, but neither can I find a clear law or policy making it illegal, especially if the penalty policy was announced or well-known prior to the beginning of the pay period.

It is a popular myth that employers must pay employees on a particular day in a particular way. The truth is that the employer must, in most respects anyway, adhere to its prior pay agreement. The agreement can call for pay once a week on Tuesday, or once a year on Christmas. The employer must pay with a good check on a bank in this state. However, if giving out checks early with an admonition not to cash them until five (or whatever) days have passed is part of the well-understood terms of employment, the employees are subject to that policy.

I reiterate that I could be wrong, but I can't do a vast amount of research to check every obscure law and ruling on the subject, but based on general principles of employment law I do not see any obvious illegality here.