|
|
|
When an employee's final paycheck must be paid depends upon whether the employee was terminated or they quit, and if they quit, when they provided notice of their intention. Failure to pay an employee's final wages when due can subject the employer to various penalties.
When the Employer Terminates the Employee
If the employment relationship ends because the employer terminates the employee, lays them off, or otherwise lets them go, the employee's final paycheck must be provided to them on their last day of work. (Labor Code § 201.) The employer is subject to various penalties if it waits until the next regularly scheduled payday to pay the employee their final wages. (Labor Code § 203.)
When the Employee Quits
If the employee voluntarily quits, and provides at least 72 hours notice, their final paycheck is due on their last day of work. If the employee voluntarily quits and provides less than 72 hours notice, the final paycheck is due not later than 72 hours after notice is provided. Additionally, the employee can request that their final paycheck be mailed to them, and the mailing must occur within the 72 hour period. (Labor Code § 202.)
What Must be Paid
All earned wages and accrued but unpaid vacation time must be paid to the employee. Expenses, however, do not need to be reimbursed until the normal time for reimbursement occurs.
When Commissions are Paid
An employee does not need to pay commissions to a former employee until the commissions are owed. Thus, if an employee with a 10% commission sells $1000 worth of product before their employment ends, the employee does not need to be paid their $100 until the business receives its $1000.
Penalties
Failing to pay wages when due can require the employer to continue paying the employee wages on a day-to-day basis, for up to 30 days, until the final paycheck is paid. Additionally, statutory penalties and attorneys' fees if a court action is filed may be awarded. (Labor Code §§ 203, 218.5.)
Direct Deposit of Final Paycheck
Effective January 1, 2006, employers can now use direct deposit to pay an employee their final paycheck (if the other requirements for using direct deposit and for making the final pay are ment). (Labor Code §§ 213.)
[Note: Special rules may apply for employees in the motion picture and oil drilling industries]
201 - when the employee is terminated
"If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately. An employer who lays off a group of employees by reason of the termination of seasonal employment in the curing, canning, or drying of any variety of perishable fruit, fish or vegetables, shall be deemed to have made immediate payment when the wages of said employees are paid within such reasonable time as may be necessary for computation and payment thereof; provided, however, that such reasonable time shall not exceed 72 hours, and further provided that payment shall be made by mail to any such employee who so requests and designates a mailing address therefor."
202 - when the employee quits
"If an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting. Notwithstanding any other provision of law, an employee who quits without providing a 72-hour notice shall be entitled to receive payment by mail if he or she so requests and designates a mailing address. The date of the mailing shall constitute the date of payment for purposes of the requirement to provide payment within 72 hours of the notice of quitting."
203 - if the employer fails to timely pay
"If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which he or she so avoids payment.
Suit may be filed for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise."208 - where employees must be paid
"Every employee who is discharged shall be paid at the place of discharge, and every employee who quits shall be paid at the office or agency of the employer in the county where the employee has been performing labor. All payments shall be made in the manner provided by law."
218.5 - more penalties if the employer fails to pay
"In any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney's fees and costs to the prevailing party if any party to the action requests attorney's fees and costs upon the initiation of the action. This section shall not apply to an action brought by the Labor Commissioner. This section shall not apply to a surety issuing a bond pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code or to an action to enforce a mechanics lien brought under Chapter 2 (commencing with Section 3109) of Title 15 of Part 4 of Division 3 of the Civil Code.
This section does not apply to any action for which attorney's fees are recoverable under Section 1194."