California Final Paycheck Law

In California, an employer is required to pay a final paycheck on an employee’s last day of work or within 72 hours of that last shift.

CA Law Last Paycheck – California employees are protected by robust labor laws that ensure they receive their final paycheck in a timely manner upon termination of employment. These laws are designed to safeguard the rights of employees and hold employers accountable for any delays or failure to provide the wages owed. California’s strict enforcement of timely payment after termination underscores the state’s commitment to protecting workers’ rights. Employees can be assured that they have the legal backing to seek their rightful compensation, even after the employment relationship has ended.

In California, the deadline for the final paycheck depends on if the employee resigned or was fired.

Employee fired

For final paycheck for terminated employee

If the employee was fired, they are entitled to their final paycheck immediately. Final paycheck for terminated employee must include all wages, including accrued vacation, immediately at the time of termination. Labor Code Sections 201 and 227.3

Employee resigned

If the employee resigns without notice, then the employer has 72 hours to provide the last paycheck. However, if the employee gives over 72 hours’ notice, the employee should receive their final paycheck on their last day.

An employee without a written employment contract for a definite period of time who quits without giving 72 hours prior notice must be paid all of his or her wages, including accrued vacation, within 72 hours of quitting. An employee who quits without giving 72-hours prior notice may request that his or her final wage payment be mailed to a designated address. The date of mailing will be considered the date of payment for purposes of the requirement to provide payment within 72 hours of the notice of quitting. Labor Code Section 202

How to Pay Employee’s Final Paycheck

The place of the final wage payment for employees who are terminated (or laid off) is the place of termination. The place of final wage payment for employees who quit without giving 72 hours prior notice and who do not request that their final wages be mailed to them at a designated address, is at the office of the employer within the county in which the work was performed. Labor Code Section 208.

Direct deposits of wages to an employee’s bank, saving and loan, or credit union account that were previously authorized by the employee are immediately terminated when an employee quits or is discharged, and the payment of wages upon termination of employment in the manner described above shall apply UNLESS the employee has voluntarily authorized that deposit and provided that the employer complies with the provisions of Labor Code Section 213(d) relating to the payment of wages upon termination or quitting of employment.ay Employee’s Final Paycheck

Waiting Time Penalties

If an employer fails to pay the final paycheck by the deadline, they will incur waiting penalties of a day’s pay for each day the final paycheck is late. This caps out at a maximum of 30 days. The penalty is calculated as an employee’s average daily wage, including an average of commissions and overtime.

When calculating the average daily wage:

If the employee is paid on an hourly wage and works for eight hours every day, then the average daily rate is eight times their hourly wage.
The waiting time penalty for part-time employees is calculated from their regular day of work. If they work four hours a day, then the waiting time penalty is four times their hourly rate.
Overtime is only calculated if it is regular and scheduled by the employer. For example, if the employee regularly worked fifty hours each week, then that overtime will be calculated. However, if they worked a long day within their last week, that would not be calculated in the waiting time penalty.

Under California final pay law, if the employee receives their final paycheck on time, but without the correct compensation, they may be entitled to a waiting time penalty. Whether the employer does not pay accrued vacation time on time, or the final paycheck is short, they will be liable for the full waiting time penalty. If the employer has simply miscalculated the last paycheck and it is a good-faith error, then there is no waiting time penalty.

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California Final Paycheck Law

Employee fired

Employee resigned

How to Pay Employee’s Final Paycheck

Waiting Time Penalties

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