California Labor Code 201: Final Paycheck Rules, Employee Rights, and Employer Obligations

California Labor Code 201 requires immediate final paychecks at discharge, covering unpaid wages, unused vacation, and earned bonuses. Employees may seek penalties and file claims if payment is delayed or withheld.

By Douglas Wade, Attorney

Email | Call (800) 484-4610

Have a quick question? We answered nearly 2000 FAQs.

Table of Contents

1. Introduction

2. California Labor Code 201: An explanation in ninety seconds

3. California Labor Code 201: When Does It Apply?

4. How Soon After Being Fired (Discharged) Should I Get Paid?

5. If I quit, how soon do I get compensated?

6. Exclusions from Instant Payment

7. What Happens If I Don’t Get Paid on Time by My Employer?

8. How Can I Get Waiting Time Charges or My Final Paycheck?

9. Example Cases

Introduction

According to California Labor Code 201, if a worker is fired by their company, they must be provided their earned and outstanding pay right away.

It also explains how such payments are paid to workers who are let go due to seasonal work in the fish, fruit, or vegetable curing, drying, and canning industries. Lastly, it explains how an employee can postpone time off payment until the following calendar year, as well as where that money can go.

California Labor Code 201: An explanation in ninety seconds

There are three primary parts in the California Labor Code 201. According to the first clause, an employee’s unpaid and unearned earnings at the point of termination are immediately owed and due to the employer. This implies that a company must send a worker their last paycheck right away after firing them.

This payment can be made in a timely manner to workers engaged in seasonal jobs, such as those involved in the canning, curing, or drying of perishable items, including fish, fruits, and vegetables. This acceptable amount of time cannot exceed 72 hours and is determined by how long it takes the employer to compute and pay the earnings. Lastly, the company must mail the worker’s payment if they have asked for it to be delivered that way.

California Labor Code 201’s second provision addresses unused vacation time that a worker is entitled to because of prior overtime work. If there is such wasted time off, the company must pay for it in the employee’s last paycheck. Additionally, workers have the option to contribute their unused vacation time to the state retirement accounts and have it postponed to the next calendar year.

Comparable to the second provision, the third provision of California Labor Code 201 outlines the three alternatives available to an employee for postponing excess vacation time.

Putting the whole amount left over into a retirement fund (the worker’s 401(k), 477, or 403(b) plan) is the first choice. The employee might choose to divide the payout of any remaining time off between actual cash compensation and retirement funds under the second option. The last choice enables the worker to get all of the funds in one single sum as a cash payment.

California Labor Code 201: When Does It Apply?

It is applicable in two primary situations. They occur when a worker is let go from their position or when they resign from their position.

The worker’s employer is required to provide their last paycheck as soon as they are fired. The last payout has to incorporate any unused vacation, annual, or holiday time (or regular time off) that the employee may still have. As an alternative, the worker may choose to have their remaining time off money transferred to their retirement account and postponed until the following year.

Employers are required to provide workers their last paycheck as soon as they leave their position and give notice. Workers may still choose to postpone their unused time off benefits and contribute them to their retirement plans in accordance with the remainder of California Labor Code 201. The company has a fair amount of time—no more than 72 hours—to compute and pay wages in the event that an employee leaves without warning.

How Soon After Being Fired (Discharged) Should I Get Paid?

Employers are required under California Labor Code 201 to reimburse all earned & unpaid wages to their employees as soon as they are fired or discharged. These payments cover any accumulated vacation time or underutilized time off, any bonuses that the worker is still due, and any sums that were not paid at the time of termination.

If I quit, how soon do I get compensated?

Whether or not a worker gives notice to their company about their resignation determines when they will be compensated. The employee’s last paycheck must be paid at the time of resignation if notification is given. For example, if a worker works for two weeks, they have to get paid at the conclusion of the two weeks of work.

The company has 72 hours to pay an employee’s last salary if they fail to give notification of their resignation. Unless the worker has chosen to postpone them into retirement accounts, this also includes paying for unused vacation time.

Exclusions from Instant Payment

California Labor Code 201’s quick payment mandate has one exemption. Seasonal workers who work in industries that are into canning, preserving, or drying perishable goods—such as fruits, vegetables, or fish—must get paid within the first 72 hours of being let go. Employers are exempt from having to pay these workers right away after firing them.

What Happens If I Don’t Get Paid on Time by My Employer?

California Labor Code 203 imposes a fee on your employer if they fail to pay your last paycheck on schedule. This penalty accrues at the same pace as if the worker had been employed and is equivalent to the worker’s pay.

For example, a company faces a penalty of three extra days’ earnings for delivering the employee’s last salary three days late. At 30 days past due, this penalty ceases to accrue. A worker cannot take advantage of these payments for penalties if they willfully avoid getting paid.

How Can I Get Waiting Time Charges or My Final Paycheck?

Workers can pursue waiting time fines and their missed final paycheck in one of two ways. The Division of Labor Standards Enforcement, or DLSE, is the first place to submit a pay claim.

You can submit these wage claims personally, by mail, by email, or online. To effectively manage a claim, the DLSE will need specific details from the worker.

The name and address of the business or person the complaint is being made against, other accountable parties like supervisors or managers, and payment details like hours labored, breaks utilized, and pay stubs are all included in this data. In general, a worker’s claim can be handled more successfully the more details they can supply.

As an alternative, an employee may file a lawsuit against their employer for nonpayment of their wages. Employees should specifically consider the amount of time that has passed since their employer declined to issue the last paycheck when bringing a case.

The statute of limitations for unpaid pay claims is typically one year. This implies that an employee will no longer be able to file a claim for wages that remain unpaid if it is not filed within a year of the employer’s refusal to pay.

Example Cases

Example 1: Worker Fired and Final Payment Delayed

A worker at a fast-food restaurant is let go from his employment. It takes five days for him to get his last payment.

Violation under California Labor Code 201: unjustified delay in final payment.

The Protections of California Labor Code 201: Unless the worker is employed in a seasonal industry, employers must pay fired employees as soon as possible. In addition to the other unpaid salaries and unused time off, if the employee did not choose to have these deferred into his retirement funds, the company would be required to pay the employee a penalty equivalent to five days’ salary for a five-day payout delay.

Example 2: Seasonal Worker Terminated and Unpaid Scenario

Following the conclusion of the fish harvest, a seasonally employed worker at a fish drying business is let go. The employer does not pay the sacked employee until eighty hours after the termination, claiming that it takes eighty hours to handle and send the final payment.

Violation Under California Labor Code 201: Unreasonable postponement of seasonal workers’ payments.

The Protections of California Labor Code 201: According to Labor Code 201, the employer is required to give the last paycheck to seasonally hired workers within a reasonable amount of time—no more than 72 hours. In this instance, the employee’s eight extra hours would probably be penalized with an additional day’s pay.

Example 3: Unpaid Bonus withheld after Employee Fired

Situation: A bank worker gets let go. The employee participated in a bonus scheme that the bank just established, but the bank refused to pay him for the incentives he had accrued, even to the point of firing him.

Violation: When an employee is fired, the employer refuses to pay the unpaid bonuses.

The Protections of California Labor Code 201: Employers are required under Labor Code 201 to reimburse fired workers for all outstanding salaries, including unpaid bonuses. In this case, an employee could submit a Wage Claim to the FLSE in order to get their well-earned bonus.

Have a quick question? We answered nearly 2000 FAQs.

See all blogs: Business | Corporate | Employment

Most recent blogs:

California Labor Code 5814: Penalties for Delayed or Unreasonable Workers’ Compensation Payments

California Labor Code 5814 outlines penalties for delayed workers’ compensation, protecting injured employees from financial hardship caused by late payments. Workers may claim up to 25 percent penalties for unreasonable delays, ensuring timely disability benefits, medical coverage, and settlement reimbursements.

California Labor Code 202: Final Paycheck Rules When Employees Quit

California Labor Code 202 requires employers to pay final wages on time when employees resign, with timing based on notice given. Workers may also claim unused vacation pay, request retirement fund deposits, or seek penalties for delayed payments.

California Labor Code 1174: Employer Timekeeping and Recordkeeping Requirements

California Labor Code 1174 outlines employer timekeeping and recordkeeping duties, allowing electronic or paper systems when records are indelible. Keep records in California, preserve them at least three years, and provide accessible copies to workers and authorities.

Labor Code 1194 California: Overtime and Minimum Wage Rights, and Remedies

California Labor Code 1194 protects workers seeking unpaid minimum wage and overtime, providing legal remedies, interest, and reasonable attorney’s fees. Employees can file lawsuits or arbitration claims to recover wages, enforce rights, and safeguard against unlawful employer practices in California.

California Labor Code Section 2810.3: Employer Liability for Labor Contractor Violations

California Labor Code Section 2810.3 makes client employers liable for labor contractor wage violations and missing workers’ compensation coverage. Reduce risk through careful vetting, clear contracts, payroll monitoring, and tight compliance with statutory duties and narrow exemptions.

California Labor Code 201: Final Paycheck Rules, Employee Rights, and Employer Obligations

Labor Code 510: California Overtime Pay, Exceptions, and Calculations

California Labor Code 510 outlines overtime pay rules, exemptions, and calculation methods, protecting employees from unfair wage practices and misclassification. This guide explains daily and weekly overtime, special worker protections, and the legal steps available if overtime pay is denied.

Meal Premium California: Laws, Penalties, and Employer Compliance

California meal premium rules require employers to provide compliant breaks or face fines, lawsuits, and costly penalties. Use clear policies, precise tracking, and regular reviews to maintain compliance and avoid financial or reputational harm.

Employee Record Retention by State: Guide for Employers

State-by-state employee record retention guide covering payroll, unemployment insurance, workers’ compensation, child labor, discrimination, and access. Get clear timelines and required details for Alabama to Wyoming so employers meet audits, claims, and compliance duties.

How Much Notice Does an Employer Have to Give for a Schedule Change in California?

California employers must follow state and local rules on schedule changes, including notice periods, overtime, and reporting time pay. This guide explains meal breaks, overtime, predictable scheduling, local city ordinances, and penalties for violating California labor laws.

Employment Mediation: Process, Benefits, Preparation, and What to Expect

Employment mediation offers a faster, cost-effective alternative to litigation for resolving workplace disputes. Get the process, benefits, preparation steps, what to expect, possible outcomes, and mediator roles.

What Is Fair Chance Hiring? Meaning, Benefits, and How It Works for Employers

Fair chance hiring gives candidates with criminal records fair consideration, helping employers access loyal, diverse, and skilled talent. It strengthens compliance, lowers turnover, and helps build high performance teams without compromising workplace safety.

California Labor Code Section 204: Employee Rights When Employers Pay Late

Late wage payments in California can trigger penalties under Labor Code Section 204, protecting employees from repeated payroll delays. Workers have legal options including waiting time penalties, wage claims, and attorney assistance to secure timely pay.

California Equal Pay Act: Differences from Federal Law, Employer Duties, and Employee Protections

California’s Equal Pay Act expands protections beyond federal law, covering pay disparities by sex, race, and ethnicity. Employers must justify wage differences with valid factors; employees gain retaliation safeguards, filing options, and potential damages.

I-9 Compliance: Employer Rules, Penalties, and Best Practices

I-9 compliance helps employers verify work authorization, meet federal rules, and avoid costly fines, penalties, and legal issues. Use proper documentation, audits, E-Verify, and training to maintain compliance and reduce employment verification risks.

California Labor Code: Divisions, Laws, and Employee Rights Overview

California Labor Code overview covering divisions, employee rights, workplace safety, workers’ compensation, and enforcement across key industries. Trace major milestones, landmark cases, and updates that shape employer obligations and protections for California workers today.

Are Non-Solicitation Agreements Enforceable in California? Exceptions and Legal Insights

Non-solicitation agreements in California are mostly unenforceable, except when tied to trade secrets, business sales, or partnership dissolutions. This article outlines key exceptions, legal challenges, and how courts determine when limited restrictions may stand under state law.

California Labor Code Section 226: Wage Statement Requirements & Penalties

California Labor Code Section 226 sets strict paystub requirements and exposes employers to lawsuits, PAGA penalties, and fees. Review wage statements for all nine items; third party payroll services do not shield companies from compliance mistakes.

Do You Have to Sign a Write-Up at Work? Employee Rights and Employer Policies Explained

Employees often ask if they must sign a workplace write-up, and the answer depends on labor laws and company policies. This guide explains employee rights, employer practices, and options for responding when faced with disciplinary write-ups.

ABC Test California: AB 5 Exceptions, Borello Factors, and Worker Status

AB 5 reshaped California worker classification with the ABC test, Borello factors, and multiple exemptions impacting industries and licensed professionals. This guide covers independent contractor rules, key exceptions, and legal consequences for misclassification under California employment law.

How Long to Keep Employee Files: Record Retention Laws, Timelines, and Best Practices

Keep employee records compliant with federal and state retention laws to protect your business from fines, lawsuits, and compliance issues. Establish clear policies, digitize securely, and retain files for proper timelines to ensure efficiency, privacy, and legal protection.

Separation of Employment: State Notice Requirements, Termination Letters, and Compliance Guide

State separation laws vary, requiring employers to issue termination notices on time to reduce penalties and compliance risk. This guide covers state notice requirements, termination letters, unemployment benefit notifications, and practical steps for multi-state compliance.

Labor Code Section 2810.5: CA Hiring and Wage Notice Guide

California Labor Code Section 2810.5 outlines hiring and wage notice requirements employers must follow to avoid penalties and lawsuits. Employers must provide detailed written notices, comply with minimum wage laws, and use official forms to remain compliant.

California Sick Leave Law 2025: Employee Rights, Accrual Rules, and Local Ordinances

California Sick Leave Law 2025 explains employee rights, accrual rules, and employer duties for paid sick time in California. Local ordinances in Los Angeles, San Francisco, Oakland, Berkeley, and Santa Monica offer additional protections and higher sick leave caps.

What is Comp Time at Work? Definition, Legal Rules, and How it Differs from Overtime

Comp time lets employers offer time off instead of overtime pay, but strict legal rules often limit its use. This guide explains comp time, how it differs from overtime, and the legal risks businesses must review.

California Vacation Law Update 2025: Changes to Paid Leave, PFL Use, and Workplace Policies

California’s 2025 vacation law update adds new protections for employees, impacting paid leave, workplace meetings, and contractor agreements. Employers must adjust to expanded worker rights, anti-discrimination rules, and stricter compliance requirements taking effect January 1, 2025.

California Wage Statement Rules: What Must Be Shown and What to Do If Your Pay Stub Has Errors

California employers must provide accurate pay stubs detailing wages, deductions, hours, and other required information under state labor laws. Employees may seek penalties, back pay, and legal action if wage statements contain errors or missing details.

California Labor Code 201: Final Paycheck Rules, Employee Rights, and Employer Obligations

Introduction

California Labor Code 201: An explanation in ninety seconds

California Labor Code 201: When Does It Apply?

How Soon After Being Fired (Discharged) Should I Get Paid?

If I quit, how soon do I get compensated?

Exclusions from Instant Payment

What Happens If I Don’t Get Paid on Time by My Employer?

How Can I Get Waiting Time Charges or My Final Paycheck?

Example Cases

Free Consultation