Getting Paid: All About California Labor Code Final Pay Rules
Regardless of whether you are resigning and moving onto a bigger and better job or have suffered a wrongful termination, your employer must comply with California’s several final pay laws. You need to know these laws because your rights, and your employer’s obligations, differ based on the circumst
Final Wage Laws for Employee Who Gives Notice of ResignationWhere an employee gives their employer at least 72 hours’ notice of their intention to resign, the employer must pay that employee all of their wages, including accrued vacation, at the time of separation. California Labor Code § 202. If the employee gives less than 72 hours’ notice or fails to provide notice, the employer must pay the final wage, including accrued vacation time, within 72 hours of the separation. California Labor Code § 302.
Final Wage Laws for Employee Discharged by EmployerAn employee who is discharged or fired by his or her employer must be paid all of their wages, including accrued vacation, immediately at the time of termination. California Labor Code §§ 201, 227.3.
Several exceptions to this general rule exist for certain employees:
A group of seasonal employees who are laid off at the end of the seasonal employment in the curing, canning, or drying of perishable fruit, fish, or vegetables, must receive their final wages within 72 hours after the layoff. California Labor Code § 201;
An employee working in film or television production that is laid off from unusual or uncertain terms of employment requiring special computation of wages owed must be paid on or before the next regular pay date. California Labor Code § 201.5;
An employee laid off from an oil drilling business must be paid within 24 hours of the discharge, excluding weekends and holidays. California Labor Code § 201.7; and,
Where an employee is employed at a venue hosting live theatrical or concerts and is employed through a hiring hall or other similar method of short-term employment established through a collective-bargaining agreement, the CBA may set terms relating to final pay. California Labor Code § 201.9.
Please be advised that there is no requirement that the employer pay out accrued sick leave upon termination.
Penalties for Employer’s Failure to Comply with California Final Pay RulesAn employer that willfully fails to timely pay final wages to a departing employee, whether by discharge or resignation, may be assessed a waiting time penalty, payable to the departing employee. The waiting time penalty is an amount equal to the employee’s daily wage rate for each day the wages remain unpaid with a maximum span of 30 calendar days. Nishiki v. Danko Meredith, PC, 25 Cal. App. 5th 883 (2018).
The employer will not be subject to the waiting time penalty where a good faith dispute exists concerning the amount of wages due. California Labor Code § 203. A good faith dispute exists where the employer can provide a good reason for not paying the wages. An example of a good faith dispute occurs where the employee’s last day of employment is disputed, which affects the amount of their final wage.
Severance PayIn California, there is no legal requirement that employers provide severance pay to an employee upon termination. Instead, severance pay is dictated by the employer’s policy or the employment contract. Additionally, some employers may offer severance pay in exchange for a waiver or release of certain legal claims.
Direct DepositYour employer can pay final wages via direct deposit if you authorize or request payment by such method. California Labor Code § 213(d).