In California, an employee who is terminated must be paid out all of his or her wages immediately at the time of termination. This includes all outstanding wages, accrued bonuses and vacation time, commission pay and expense reimbursement. If an employer does not pay final wages on time, the employee may be able to seek damages for each day the wages remain unpaid.
Below, our California labor law lawyers discuss the following frequently asked questions about when an employer in California is required to pay out final wages:
- 1. When is an employer required to pay final wages after termination?
- 2. Do all employees have to get their final paycheck on their last day?
- 3. What happens to my unused vacation pay if I am laid off or fired?
- 4. Can I sue my employer for not paying unpaid wages in California?
- 5. How much money will I get for if my employer doesn’t pay my final wages on time?
When an employee is terminated, the employee’s final unpaid wages must be paid immediately upon termination. This includes employees who are fired or laid off for cause, or for no cause at all.1
If an employee quits or resigns without providing prior notice to the employer, the employer generally has to make the employee’s final payment available within 72 hours. However, if the employee provides at least 72 hours notice of his or her intention to quit, the employer has to make final wages available at the time of quitting.2
An employee who quits without prior notice can request their employer send his or her final wage payment to a designated address. The 72-hour period to send final payment is based on the date of mailing.3
Final payment includes unpaid wages, unused vacation, or any other time off accumulated by the employee.4
Employees who are terminated are generally required to be given their final wages upon termination. However, there are some exceptions that allow employers additional time to provide a final paycheck.
Quitting Without Notice
Employees who quit or resign with less than 72 hours notice to their employer may have to wait before they can get their final paycheck. An employer has 72 hours to provide final payment. The quitting employee can also request the final payment by mail, with the date of mailing within 72 hours of quitting.5
Seasonal Worker Layoffs
Some seasonal workers may be required to wait before they can get their final paychecks. When a group of employees are laid off at the end of seasonal employment in canning, drying, or curing fruit, fish, or vegetables, payment must be made within 72 hours after the layoff. If requested, these final payments can be made to an employee’s designated address.6
Motion Picture Layoffs
People working in the motion picture industry in California are used to working odd hours. When an employee working in film production is laid off and their employment terms require special computation, they may be paid the next regular payday. The final payment may be mailed to the employee or made available at a specified location.7
Oil Drilling Layoffs
Employees who work in the oil drilling business must be paid within 24 hours after they are discharged. The 24-hour period excludes Saturdays, Sundays, and holidays.8
Live Event Venue Workers
Employees who work on a short-term basis in live theatrical events or concerts may be paid according to their collective bargaining agreement. This applies to employees hired through a hiring hall or other system who are subject to a bona fide collective bargaining agreement which provides for the time limits for final wages.9
In addition to unpaid final wages, an employee is entitled to payment for his or her unused vacation time immediately at the time of termination.10
Employers are not required to provide paid vacation time. However, if your employer provides for paid vacation and you have unused vacation time, it shall be paid out at wages on termination. Vested vacation time is paid at the employee’s final rate of pay.11
Under California labor law, your employer cannot provide for forfeiture of vested vacation time if the employee is fired or laid off.12
Example: Ed’s boss Stephan tells Ed that his department is losing too much money and he is being laid off. Stephan hands Ed his final paycheck including his final hours for the day. Ed asks about his unused vacation time. Stephan says that company vacation policy was “use it or lose it.” Ed signed a contract that said any unused vacation time would be forfeited.
Ed is still owed for his unused vacation time paid at 20 hours of his normal rate of pay. It does not matter if the company policy says otherwise, California labor law requires payment of vacation time on termination. Similarly, the language of Ed’s employment contract cannot take away state labor protections. California law treats vacation time like earned wages, which do not expire and cannot be taken away.
If your employer has not made final payment available upon termination, your employer may be violating California wage and hour laws. An employee who is owed unpaid wages can file a lawsuit against their employer to recover his or her unpaid wages, in addition to other damages provided by law.13
If your employer willfully fails to make the final wages available for an employee who is laid off or quits, the employer may be liable for late penalties.14
When an employer has a good faith dispute concerning the amount of wages due, the employer may be able to avoid waiting time penalties. The employer must present a good faith defense that, if successful, would find the employer did not owe the employee any wages.15
However, even where there is a good faith dispute as to part of the unpaid wages, the employer must make immediately available any wages that are not in dispute.16
In many cases, an employer who is withholding final wages may also be in violation of other wage and hour laws. In a California wage and hour lawsuit, an employee may seek payment or damages for:
- Unpaid wages
- Unpaid overtime
- Hours worked “off-the-clock”
- Not provided meal breaks
- Not provided rest breaks
- Failure to pay the California minimum wage
- Failure to pay the local city or county minimum wage
- Late payment of wages
In many cases, an employer may have violated California labor laws against multiple employees. Successful wage and hour class action lawsuits often involve unpaid wages for final payment, late payment of final wages, and other wage and hour violations.
An employee who has not been paid for wages worked can file a lawsuit for unpaid wages. However, there is also a waiting time penalty when an employer does not immediately make the final wage payment available upon termination.17
An employer who fails to pay wages due at termination may be assessed a waiting time penalty. The waiting time penalty is equal to the amount of the employee’s daily rate of pay for each day the wages remain unpaid, up to a maximum of 30 days.18
The penalty has nothing to do with the number of days an employee works during the month, or the length of time the employee has worked for the employer. Even a part-time worker is entitled to the waiting time penalty calculated at the daily wage rate multiplied by the number of days of non-payment, up to a maximum of 30 days.19
In addition to unpaid wages and waiting time penalties, you may also be able to recover interest on the unpaid wages and reasonable attorney’s fees and court costs.20
If the employer’s violation of California labor laws was not due to a good faith error, you may be eligible for double damages. Liquidated damages include an amount equal to the unpaid wages plus interest.21
Example: Astrid is working as a cashier at a funnel cake stand making $12.00 per hour. She works 3 days a week for 5 hours a day. Astrid gets promoted to head cashier and gets a raise to $13.00. However, after Astrid’s third shift as head cashier, she is fired because she is caught snacking on funnel cakes while working.
Astrid’s employer tells her to leave immediately. Astrid asks for her final paycheck but her boss says he’s too busy and he will mail her final paycheck. After a week, Astrid calls up her employer to ask about her final paycheck and her employer says she shouldn’t even be getting a final paycheck because she broke the rules, but that he would get around to it later.
If Astrid files a lawsuit against her employer, she will be able to claim unpaid wages and seek a waiting period penalty. The waiting period penalty may amount to $60 per day for each day of non-payment after she was fired, up to a maximum of 30 days.
Even if Astrid’s employer was “busy” at the time she was terminated, he is required to make final payment available immediately. The waiting time penalty would amount to $65 per day because $65 was Astrid’s daily wage rate ($13/hour at 5 hours per day worked = $65/day).
Call us for help…
For questions about unpaid final wages, California wage and hour laws, or to discuss your case confidentially with one of our skilled California labor and employment attorneys, do not hesitate to contact us at Shouse Law Group.
We have local employment law offices in and around Los Angeles, San Diego, Orange County, Riverside, San Bernardino, Ventura, San Jose, Oakland, the San Francisco Bay area, and several nearby cities.
Work in Nevada? See our article on when employers are required to pay final paychecks in Nevada.
- Labor Code 201 LC — Payment of wages on discharge. (“(a) If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.”)
- Labor Code 202 LC — Payment of wages upon quitting. (“(a) If an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting.”)
- Labor Code 202 LC — Payment of wages upon quitting. (“(a) Notwithstanding any other provision of law, an employee who quits without providing a 72-hour notice shall be entitled to receive payment by mail if he or she so requests and designates a mailing address. The date of the mailing shall constitute the date of payment for purposes of the requirement to provide payment within 72 hours of the notice of quitting.”)
- Labor Code 227.3 LC — (“Unless otherwise prohibited by a collective-bargaining agreement, whenever a contract of employment or employer policy provides for paid vacations, and an employee is terminated without having taken off his vested vacation time, all vested vacation shall be paid to him as wages at his final rate in accordance with such contract or of employment or employer policy respecting eligibility or time served; provided, however, that an employment contract or employer policy shall not provide for forfeiture of vested vacation time upon termination.”)
- Labor Code 202 LC, see footnote 2 above.
- Labor Code 201 LC — Payment of wages on discharge. (“(a) An employer who lays off a group of employees by reason of the termination of seasonal employment in the curing, canning, or drying of any variety of perishable fruit, fish or vegetables, shall be deemed to have made immediate payment when the wages of said employees are paid within a reasonable time as necessary for computation and payment thereof; provided, however, that the reasonable time shall not exceed 72 hours, and further provided that payment shall be made by mail to any employee who so requests and designates a mailing address therefor.”)
- Labor Code 201.5 LC — Payment of wages in the motion picture industry. (“(b) An employee engaged in the production or broadcasting of motion pictures whose employment terminates is entitled to receive payment of the wages earned and unpaid at the time of the termination by the next regular payday.”)
- Labor Code 201.7 LC — Payment of wages in the oil drilling business. (“An employer who lays off an employee or a group of employees engaged in the business of oil drilling shall be deemed to have made immediate payment within the meaning of Section 201 if the wages of such employees are paid within such reasonable time as may be necessary for computation or payment thereof; provided, however, that such reasonable time shall not exceed 24 hours after discharge excluding Saturdays, Sundays, and holidays; and provided further, such payment may be mailed and the date of mailing is the date of payment.”)
- Labor Code 201.9 LC — Payment of wages for live event venues. (“If employees are employed at a venue that hosts live theatrical or concert events and are enrolled in and routinely dispatched to employment through a hiring hall or other system of regular short-term employment established in accordance with a bona fide collective bargaining agreement, these employees and their employers may establish by express terms in their collective bargaining agreement the time limits for payment of wages to an employee who is discharged or laid off.”)
- Labor Code 227.3 LC, see footnote 4 above.
- Murphy v. Kenneth Cole Productions, Inc.(2007) 40 Cal.4th 1094, 1117. (“An employee need not administratively exhaust his claim before filing a civil action.”)
- Labor Code 203 LC — Failure to make final payment. (“(a) If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 201.9, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days.”)
- Title 8, California Code of Regulations, Section 13520. (“A willful failure to pay wages within the meaning of Labor Code Section 203 occurs when an employer intentionally fails to pay wages to an employee when those wages are due. However, a good faith dispute that any wages are due will preclude imposition of waiting time penalties under Section 203.”)
- Labor Code 206 LC — Wage disputes. (“(a) In case of a dispute over wages, the employer shall pay, without condition and within the time set by this article, all wages, or parts thereof, conceded by him to be due, leaving to the employee all remedies he might otherwise be entitled to as to any balance claimed.”)
- Mamika v. Barca (1998) 68 Cal.App4th 487, 493. (“A proper reading of section 203 mandates a penalty equivalent to the employee’s daily wages for each day he or she remained unpaid up to a total of 30 days. This larger penalty acts as a disincentive to employers who are reluctant to pay wages in a timely manner, thus furthering the intent of the statutory scheme.”)
- Labor Code 1194 LC — Action to recover minimum wage, overtime compensation, interest, attorney’s fees, and costs by employee. (“(a) Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit. (b) The amendments made to this section by Chapter 825 of the Statutes of 1991 shall apply only to civil actions commenced on or after January 1, 1992.”)
- Labor Code 1194.2 — Liquidated damages in wage/hour suits. (“(a) In any action under Section 98, 1193.6, 1194, or 1197.1 to recover wages because of the payment of a wage less than the minimum wage fixed by an order of the commission or by statute, an employee shall be entitled to recover liquidated damages in an amount equal to the wages unlawfully unpaid and interest thereon. Nothing in this subdivision shall be construed to authorize the recovery of liquidated damages for failure to pay overtime compensation. A suit may be filed for liquidated damages at any time before the expiration of the statute of limitations on an action for wages from which the liquidated damages arise. (b) Notwithstanding subdivision (a), if the employer demonstrates to the satisfaction of the court or the Labor Commissioner that the act or omission giving rise to the action was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of any provision of the Labor Code relating to minimum wage, or an order of the commission, the court or the Labor Commissioner may, as a matter of discretion, refuse to award liquidated damages or award any amount of liquidated damages not exceeding the amount specified in subdivision (a). (c) This section applies only to civil actions commenced on or after January 1, 1992.”)