Final Paycheck & Waiting Time Penalties

An employer who fires, discharges, or “lays off” an employee must immediately pay all compensation due and owing.  The employer must pay you your final paycheck on termination day. This law is intended to prevent employers from firing an employee to avoid paying them what they have earned. Final paycheck law, or also known as waiting time penalties, can be significant.

Whereas, if the employee suddenly quits, the employer must pay all compensation due and owing within 72 hours of resignation, or on the employee’s last day of work, if the employee gives more than 72 hours’ notice of resignation.

Waiting Time Penalty Basics

If an employer willfully fails to pay wages due to an employee who quits or is discharged, the employee’s wages continue as a penalty until paid, for up to 30 days.  These unpaid wages accrue on a daily basis, not only on days that the employee might have worked, but also on non-workdays. The amount is calculated based on that employees base pay rate.

Here is a good example. Say you worked for your employer making $45/hr. Each day, you work 15 minutes of overtime off-the-clock, and your boss refuses to let you take a meal or lunch break. Well, each day you were not paid what you should have been under CA’s basic wage & hour law. Then, your employer fires you out of the blue and gives you your final paycheck.

But its missing the off-the-clock overtime pay and premium payments for your missed meal breaks. This is a violation of California Labor Code’s waiting time law. Therefore, as a penalty, your employer now owes you $360/day (8hrs x $45/hr) for each day (up to 30 days) that those wages are unpaid. That can be a total of $10,800.

The Law Does Not Apply To the Following

The above requirements as to time for payment do not apply to:

  • Where employees are subject to a collective bargaining agreement providing for the time of payment of wages, the terms of the collective bargaining agreement control over any contrary requirements of the California Labor Code.
  • Seasonal Laborers
If you’ve been fired and not paid your wages immediately, call our employment law firm to find out if your employer owes you compensation.