When you lose your job unexpectedly, money is likely one of your first and most significant concerns. If you happen to live and work in California, you’re in luck. California is one of the friendliest states for employees in the nation, and offers some of the most stringent worker protections available. One of those protections is a requirement that terminated employees be paid promptly when they are fired, and even when they voluntarily leave their jobs.
Is it Against California Law for your Employer to Pay You Late?
When an employee is fired in California, the employer is required to pay all wages due at the time of termination. In practical effect, this means that the employer must hand the terminated employee his or her final paycheck when the employee is fired. In addition to earnings accrued up to the moment of termination, “wages due” includes any vacation pay that has been earned but not used as of the date of termination.
This differs significantly from many states, in which terminated employees are paid according to their regular pay schedule, and may wait two weeks or more for their final paychecks.
Lat Paycheck Laws in Los Angeles, California
If an employee voluntarily quits his or her job, a California employer is still be required to pay any wages due upon termination, provided that the employee has provided at least 72 hours notice. If the employee quits without notice, then the employer has 72 hours in which to make payment. Generally, this payment must be made at the office where the employee worked. However, the employee can request that the final paycheck be mailed. If the check is mailed at the employee’s request, the check must be mailed within 72 hours.
How Long Does An Employer Have to Pay You After You Quit in California?
An employer who does not make payment immediately to an employee who has been fired or who has provided at least 72 hours notice before voluntarily leaving a job, or who fails to make payment within 72 hours when an employee quits without notice, violates the California Labor Code. An employer who refuses to make timely payment may be liable for additional wages for each day the wages remain unpaid, up to a maximum of 30 times the employee’s daily rate.
For example, an employee earning $18/hour and working a regular schedule of 8 hours per day would be entitled to an additional $144 (8 hours x $18/hour) for each day that the employer withheld payment, up to a total of 30 days. In this example, if the employer withheld payment for 30 days or more, the employee would be entitled to the full wages due plus up to an additional $4,320.
If the employee routinely worked overtime hours, then the penalty would include the required overtime premium. So, if the employee in the situation described above routinely worked 9 hours per day, the daily penalty would be $171 (the $144 for the regular work day, plus 1 hour at 1.5 times the regular hourly rate). In this scenario, the maximum 30-day penalty would be $5,130.
Final Paycheck Disputes in Los Angeles County
An employer is not subject to a penalty for failure to pay wages if there is a good-faith disagreement as to whether the wages are owed. However, a good-faith dispute as to a portion of the wages claimed by the employee does not allow the employer to withhold all wages until the dispute is resolved. In this situation, the employer is required to release any wages due that are not in dispute, and cannot require the employee to sign a release or waive additional wages.
For example, if the employee believes that he is entitled to pay for 48 hours of work, but the employer in good faith believes that only 40 hours are due, the employer must promptly make payment of the 40 hours not in dispute, withholding only the disputed 8 hours until resolution of the disagreement.
Other Employment Termination Issues in California
Payment of Accrued Sick Time Upon Termination in Los Angeles
The California law that requires an employer to pay accrued wages and vacation pay upon termination does not apply to sick leave. Whether or not the employer pays for unused sick leave depends upon the employer’s policies as set forth in any employment contract, employee handbook, or other agreement or internal policy.
Severance Plans in California
California law does not mandate severance pay for an employee who is terminated or voluntarily leaves his or her job. Whether or not the employee is entitled to severance pay depends on the employer’s policies. If the employer offers a severance plan under the Employee Retirement Income Security Act of 1974 (ERISA), severance is governed by federal law.
Unemployment Insurance in L.A.
Most terminated employees are eligible for unemployment benefits in California. While many workers believe that they do not qualify for unemployment if they are fired, that isn’t necessarily true. Under California law, most terminated employees are eligible for unemployment unless:
• The employee left the job voluntarily—though an employee who quits a job but does so for “good cause” may still be eligible to receive unemployment benefits
• The employee was fired for willful misconduct—though an employee fired for other reasons, such as weak performance, may still receive unemployment
• The former employee was offered and refused suitable employment
How To Get Your Last Paycheck from your Employer?
Often, employees feel that employers hold all the cards. The employer is larger, more powerful, has easier access to legal representation, and has more resources with which to combat an employee’s claims. In California, employees need not feel powerless when former employers do not treat them fairly. California law provides powerful protections for employees who have been terminated or who have voluntarily left their jobs. However, those protections are only as good as the employee’s efforts to protect his own interests and assert his rights.
For example, a California employer who waits 15 days to send a terminated employee’s final paycheck won’t face any sanctions unless the employee takes action to collect the additional wages due to him as a result of the delay. The employer will “get away with” violating the law, and the employee will miss out on the opportunity to receive fair compensation for the delay.
In the case involving wrongful termination, a false statement in response to a claim for unemployment, or other issues, the employee may have additional claims against the employer.
If an employer has not treated you fairly on termination, whether that means withholding of wages due, refusal to pay for accrued vacation time, or something more serious such as termination on the basis of race, sex, pregnancy or another protected classification, a California employment attorney can be your best source of information about how to protect your rights and pursue the compensation you deserve.