Updated on February 13, 2019
Final pay rules: Understanding California waiting time penalties
This webpage explains all about final paycheck rules and waiting time penalties for California employees. In a nutshell, if you weren't paid all of your final wages in a timely manner - then you are probably entitled to substantial waiting time penalties based upon California law. I lay it all out for you on this webpage.
However, based upon what I see, there may be a lot more going on that you might realize. It's sort of like that saying, "Where there is smoke, there is fire." What I mean by that is that most folks don't have any idea how much they are owed in unpaid wages. This isn't your fault. You just haven't been trained in performing an unpaid wages audit.
Basically, an unpaid wages audit will help you determine whether you have been paid all of the wages that you are entitled to under California law. I suggest that if you have the slightest suspicion that you are owed unpaid wages - and you probably have that, since you are reading this webpage - you should have an unpaid wages audit performed. Click here for more information on an unpaid wages audit. Your first step is contacting our office. First we will talk with you in order to get an initial determination of whether you are owed unpaid wages. This is a no obligation, and free. If we go forward with the unpaid wages audit, you will never have to pay us. Ever. It is up to you how you want to proceed after we explain to you the results. If we agree to accept your case, all of our fees will be approved by the court and paid directly by the company.
Final Paycheck Laws for Terminated Employees in California (Meaning, you are fired, let-go and/or laid-off)
California law has strict timing requirements on the payment of final wages to you if you have resigned or have been terminated. Under California Labor Code Section 201, if you are fired/ discharged, then your employer must pay you immediately. Meaning, right then. On the spot, before you leave.
California Labor Code Section 203 provides that if you aren’t paid your final wages timely you are entitled to seek waiting time penalties from your employer. The penalties are because you had to wait for the wages that are due to you.
You are entitled to seek waiting time penalties equivalent to one day’s regular wages for each day the payment is late, for up to 30 days. In many instances the waiting time penalties can end up being much more than the underlying final wages that are owed.
If you are fired or let go by your employer, your final wages must be paid at the time that you are let go or fired (read: involuntarily terminated).
Final Paycheck laws for employees that give at least 72 hours notice
If you resign (read: quit) and give at least 72 hours notice, your employer must pay your final wages on your last day. If you aren’t paid your final wages timely, in this instance, on your last day of employment, you are entitled to seek waiting time penalties from your employer. The penalties are because you had to wait for the wages that are due to you.
Final Paycheck laws for employees that do not give at least 72 hours notice
If you resign or quit with less than 72 hours notice, final wages must be paid within 72 hours. If you are not paid your final wages within 72 hours of your resigning or quitting your employment, then you are entitled to seek waiting time penalties from your employer. The penalties are because you had to wait for the wages that are due to you.
The purpose of waiting time penalties
The purpose of Lab C § 203, is to “encourage” employers to pay your final wages immediately. The statute is designed to compel the prompt payment of earned wages. The law fully recognizes that all sorts of bad things happen to people when they aren't paid their wages in a timely manner. Rent or mortgage doesn't get paid, people can get put out on the street. Workers and their families can't but food. I don't have to tell you how bad it can get when you aren't paid the wages that you are owed.
Because of this hardship that is placed on workers when you aren't paid the wages that you are owed in a timely manner, and because you had to wait for your earned wages, the law allows you to get penalties because you have to wait.
You may be entitled to up to 30 days wages
Under the law, you may be entitled to 30 days wages if you aren't paid your wages in a timely manner. You are entitled to this 30 days waiting time penalties if you employer owes you $5.00 in unpaid wages or whether you are owed $500.00 in unpaid wages.
It can really add up fast
If not, the company may have to pay you 30 days wages. Which can really add up fast.
These are called "waiting time penalties. In this article, I discuss final paycheck laws for terminated employees in California.
California's leading wage lawyer
I'm not saying this to brag. I'm telling you this so you will know that I know what I'm talking about. I represented the workers in the leading California Supreme Court case on California unpaid wages law - Brinker vs. Superior Court. I wrote the winning briefs in the recent California Supreme Court cases - Augustus vs. Superior Court (the leading case on rest breaks) and Williams vs. Superior Court (the case that gives you the right to getting the names of your co-employees in a PAGA case).
I am regularly asked to testify before the California State Senate and the California State Assembly on unpaid wages law. I helped write the recent changes to California's unpaid wages PAGA laws.
Bill Turley is regularly asked to testify before the California legislature as an expert on California wage law.
Bill Turley testifying before them California State Assembly on California wage laws.
An example of how waiting time penalties can add up really fast
Here is a quick example. John averaged making $245 a day while driving for a delivery company. The company automatically deducted John's meal periods when in reality, he was working during meal periods. Thus, when he quit, the company still owed him for the 1/2 hour each day for the meal periods that were illegally deducted and he was owed an hour's pay for every missed meal period and rest period.
Thus, just in waiting time penalties, John was owed as follows:
$245 x 30 days = $7,350
I call it the joy of math. Not that it's a joy to have your wages stolen. But it is a joy when I get you your stolen wages back.
Of course, this isn't a guarantee of what you will get in your case. But is for illustrative purposes to demonstrate what you may be entitled to under California law. As I tell people, the only thing that is guaranteed in life is death, taxes and the company is going to hire shark lawyers that will come up with a couple of dozen or so reasons (the law calls them "defenses") of why you shouldn't get money in your case. Happens all the time. I call 'em, the Devil's Advocates.
The failure to pay must be wilful
In law there are things call "defenses." You can bet that your employer will try and defend your claim for waiting time penalties by arguing that their failure to pay you on time wasn't wilful. I suggest that you don't get all hung up on this because 9 out of 10 times the failure to pay you timely is going to be willful.
Good faith disputes
Your next step
If you suspect (or know) that you haven't been paid all of the wages that you are owed, you need to immediately contact a seasoned California wage lawyer about your unpaid wages. I word of caution here though. I suggest that you don't call someone because they have a pretty webpage. Anybody can slap up a webpage on the Internet and pose as a wage and hour lawyer.
What am I talking about?
Here is a quick story on a recent case we had. We filed a case against a decent sized California manufacturing company. Soon after we filed the case, another lawyer (that is all over the Internet and has a very fancy and impressive website that claims he is an "experienced California wage and hour lawyer) put together a quick settlement with the company's lawyer. This is not uncommon. That is, for companies to try and settle quickly and pay pennies on the dollar. Especially, if the company knows a big-time, well known lawyer has another case with the same company. The lawyer then filed a Motion for Preliminary Approval of a Class Action Settlement for $500,000.
Our client objected to the Settlement as not being adequate and very unfair to the workers. The Judge in the case agreed with us. So we did a lot more investigation and discovery and based upon our investigation it was clear that the workers were owed a lot more money. We recently went to a new mediation and settled the case for $4,500,000. Or 9 times more than the other lawyer had tried to settle the case for.
As it turns out, a large part of this case was based upon waiting time penalties.
The lesson here - don't believe everything you read on the Internet. Instead, you need to make sure that the California unpaid wages lawyer that you hire really is one of the best wage class action lawyers in California. Not all lawyers are alike. The last thing you need is a lawyer that is going to try and settle your case cheap.
This in not to suggest that every case has this value. Every case is different and there are not guarantees in life or law. Just because we have gotten great results in so many previous cases, is no guarantee of any particular result in your case or any other case.
Waiting Time Penalties and Employer Responsibilities After an Employee Leaves
The length of time a California employer has to provide employees with their final paychecks depends on whether you quit or were fired. If the employer does not meet the deadline, you are entitled to a waiting time penalty equal to a full day's pay for each day the paycheck is late, up to a total of 30 days. Workers have a right to collect these waiting time penalties no matter what the terms of their separation from the company.
Under California final paycheck laws, an employer has the following responsibilities to:
Fired or laid off employees:
An employee who is involuntarily separated from his or her job must be given a final paycheck at the time of termination.
Employees who quit:
If an employee voluntarily leaves a company without giving the employer prior notice, the employer has 72 hours to provide the worker with his final paycheck. If an employee gives at least 72 hours' notice before quitting, the employee should be given his final paycheck on his last day at work.
Provide total pay:
Not only do California employers have to provide final wages in a timely manner, they also have a duty to pay the full amount of wages owed. The full amount of wages should include any accrued paid time off, unused vacation days, and regularly scheduled overtime. If an employer splits your final paycheck into separate payments, you may still be owed a waiting time penalty for the days you waited for the total amount to be paid.
If you were kept waiting for your final paycheck or were not paid in full, you may be able to take action against your employer.