Whether you are terminated, laid off, or resign voluntarily from your job, your employer must provide you with your final wages in a timely manner. If your employer does not pay your final wages in full and on time, you can seek penalties in addition to the actual wages owed. You may also be able to recover attorney’s fees, costs, and interest if you prevail on an action for unpaid wages. California’s Labor Code lays out an employer’s obligations with respect to the payment of final wages as well as the penalties for failing to comply.
Payment Upon Termination
When an employer terminates or lays off an employee, it must “immediately” pay the employee all earned and unpaid wages. (Labor Code § 201.) The employee must be paid “at the place of discharge.” (Labor Code § 208.)
Payment Upon Resignation
If an employee quits without notice, the employer must provide final wages within 72 hours of the resignation. However, if the employee gives notice 72 hours or more in advance of the actual resignation, then the employee must be paid on the last day of work. (Labor Code § 202.) The employee must be paid at the employer’s office in the county where the employee has been working. (Labor Code § 208.)
An employee who quits without providing 72-hours notice can request that payment be mailed to him. In that case, the date of the mailing is considered the date of payment. (Labor Code § 202.) If an employer sends payment by mail without the employee’s consent and the check gets lost or intercepted, then the employee is not considered “paid” and the employer may face penalties. (See Villafuerte v. Inter-con Security Systems, Inc. (2002) 96 Cal. App. 4th Supp. 45, 50-51.)
What Constitutes Final Wages?
Final wages include all regular and overtime wages earned, as well as payment for all accrued, unused vacation time. Accrued vacation time must be paid out at the final rate of pay. (Labor Code § 227.3.) An employer cannot institute a “use it or lose it” vacation policy or one that provides for forfeiture upon termination. (Employers may be able to implement vacation pay policies that cap accrued vacation time at a certain amount.)
Penalties When Final Payments are Late or Incomplete
The Labor Code provides for penalties for failing to pay an employee who is terminated or who resigns. An employer who “willfully fails to pay” a former employee must, as a penalty, continue to pay the employee a day of pay at the employee’s regular rate of pay for each day that the employee has not been fully paid, up to 30 days. (Labor Code § 203.) These “waiting time” penalties accrue over calendar days, not business days. So, even if you only worked Monday to Friday, the waiting time penalties would accrue on weekend days as well until 30 days are reached or full payment is made. To recover for unpaid wages and penalties, an employee can bring a claim before the labor commission or in court.
Of interest, if an employee has a claim for unpaid wages (for example, failure to pay overtime), these waiting time penalties will begin accruing upon termination, even if the employer provided the employee their “final paycheck.” Thus, these penalties are frequently at issue in cases involving wage and hour violations against former employers.
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This post was co-authored by Joseph Hernandez, Jr.
Photo © Andreypopov|Dreamstime.com.
