California Requirements for Providing Final Wages to Employees
1. An employee who is discharged must be paid all of his or her wages, including accrued vacation, at the time of termination.
2. An employee who gives at least 72 hours prior notice of quitting, and quits on the day given in the notice, must be paid all earned wages, including accrued vacation, on their last day of employment.
3. An employee who quits without giving 72 hours prior notice must be paid all wages, including accrued vacation, within 72 hours of quitting.
4. An employee who quits without giving 72 hours’ notice can request their final wage payment be mailed to them. The date of mailing is considered the date of payment for purposes of the requirement to provide payment within 72 hours of the notice of quitting.
5. Final wage payments for employees who are terminated (or laid off) must be made at the place of termination. For employees who quit without giving 72 hours’ notice and do not request their final wages be mailed to them, the final wages must be made available at the office of the employer within the county in which the work was performed.
6. Final wages must be paid with a hard check, unless the employee has given prior authorization to be paid their final wages via direct deposit.
An employer who willfully fails to pay any wages due a terminated employee as outlined above will be subject to “waiting time penalties” under Labor Code section 203. Waiting time penalties accrue at an amount equal to the employee’s daily rate of pay for each day the wages are not paid, up to a maximum of 30 calendar days.
The statute of limitations for an employee to recover waiting time penalties under Labor Code section 203 is three (3) years. California employers need to review these obligations to pay employees their final wages timely to reduce this potential liability. It can add up to a significant amount, even for minimum wage earners.
We can help you avoid this liability, just give us a call if you have any questions!