California Final Payment Laws
According to the California employment law, when employees are fired or laid off, they are entitled to their full pay immediately after the laying off. An employer has no right to wait until the next scheduled payday or the following calendar day to pay them together with the rest of the employees. When it comes to final pay, it must include any accrued vacation time and even PTO.
When an employee quits their job, should they give their employer a notice less than 72 hours, the employer should pay them within 72 hours. Should the employee give a notice 72 hours before, then the employer must give them their full pay on their last working day.
Similar to fired employees, those who quit are also entitled to PTO or accrued unused vacation time. An employee who quits should be paid at the agency or office of the employer where the employee worked. When an employee quits without the 72 hour notice, they can ask to have their payment mailed at a certain designated address. In such a case, the date of mailing is normally considered as the date of payment.
In order to stop employers from delaying these payments, the California law allows the employees to get a “waiting time penalty” in the amount of their daily average wages everyday that the employer delays the check for up to 30 days. For instance, if an employee earns $50 per day and the employer delays the check for ten days, they will get a penalty of $500.
Penalties could be avoided should the employer provide a good faith dispute proof about whether or not the wages were due. The “good faith” dispute means that if the employer defense is successful, it would preclude any recovery by the employee. However, even with a dispute, the employer must pay all the due wages and failure to pay what is undisputed means that the good faith defense will be defeated.
However, there is no law that states an employee is entitled to accrued sick leave after being fired.
Severance pay
No legal law in California requires employers to provide severance pay to employees upon being fired. Employees can only refer to the employer policy regarding their severance pay.
Unemployment insurance
California offers a joint state unemployment insurance program formulated to help reduce the impact of economic fluctuations as well as assist people who lose their employment in a way that is not their own fault.
Photo Credit: Shutterstock/ Africa Studio