In the state of California, it is illegal for an employers to withhold pay from a terminated or laid off employee.
In most cases, payment must be issued to terminated workers on the last day of employment. It is illegal to make an employee wait until the end of the next regularly scheduled pay period for any portion of his or her final wages. However, some industries that rely on work done away from the employer’s administrative offices may be allowed a 24-hour grace period to issue pay.
An employee’s final paycheck must include:
- Wages earned for all days up to and including the last day of work
- Any unpaid wages from earlier pay periods
- All accrued vacation or paid time off (PTO) that the employee has not used
If you were not issued your final pay on the last day worked or within 72 hours of the last day worked, you may be able to collect waiting time penalties in addition to your final pay.
California Penalties for Withholding Final Pay of Fired or Laid Off Employees
Waiting time penalties are calculated using the employee's regular pay rate, including overtime and commissions. For every day pay is withheld, the employee is owed an additional day’s worth of wages up to a maximum of 30 days. For example, if your employer waited a week before issuing final pay, the employer would owe you an additional seven days of pay as a penalty.
Employees may still be owed waiting time penalties if their final paycheck is timely, but does not contain all wages earned. If your final paycheck is missing your PTO balances or overtime pay, you will be owed a day’s wage for every day you are kept waiting for compensation. If your employer insists that you cannot be paid until the next regular pay period, you are entitled to two additional weeks of pay for the delay.
If your employer is withholding your final pay, you should take immediate action to protect your wage and hour claim. Please feel free to browse our articles to learn more about these kinds of cases.