One common question in wage and hour complaints is “When should I receive my final paycheck?” The rules on payment of final wages vary depending on the circumstances of the employee’s departure.

If you were fired: If your employer fires you, the wages earned and unpaid at the time of discharge are due and payable immediately at the place of discharge. (Labor Code §§201(a); 208.)  As with any good rule, there is an exception for employees in “seasonal employment in the curing, canning, or drying of any variety of perishable fruit, fish or vegetables,” who may be paid within 72 hours of termination. (Labor Code §201.)

If you were laid off: Under the opinions from the California Labor Commissioner, an employee who is laid off without a specific return date within the normal pay period has been effectively terminated and must immediately be paid all wages due and payable. If you are laid off with a return date within the pay period, the wages may be paid at the next regular pay day. (2002 Division of Labor Standards Enforcement Policies and Interpretations Manual §3.2.2 (rev 2009).)  

If the business was sold (and closed):  Under the opinions from the California Labor Commissioner, the sale of a business effectively terminates the company’s employees, all of whom must be paid any earned wages, along with any accrued vacation. (DLSE Manual §3.2.2.1.)

If you quit: If the employee doesn’t have a written employment contract for a definite period of time (e.g., a contract for 1 year of employment) and voluntarily quits his or her job, the payment of final wages depends on the timing of the resignation (Lab Code §202):

  • If the employee gave at least 72 hours’ prior notice of his or her intention to quit, the employee must be paid his or final wages on the final day of employment.
  • If the employee gave less than 72 hours’ prior notice of his or her intention to quit, the final wages are due 72 hours after notice of the resignation was provided.
An employee who quits with less than 72 hours’ notice must physically return to the office or agency of the employer in the county in which the work was performed to recover his or her final wages unless the employee requested payment by mail and provided a mailing address for his or her final paycheck. (DLSE Manual §3.7.  Labor Code §208.)

If you are an employer: The best way to ensure that you don’t run into a complaint for payment of final wages is to incorporate the above rules into your policies and ensure your HR department is following them.  

As an example a sound policy addressing the payment of final wages may contain the following four statements:

  1. An employee who is terminated involuntarily will be provided with a final paycheck at the time of termination.
  2. An employee who provides at least 72 hours’ notice of his or her resignation will be provided with a final paycheck on the last day of work.
  3. The final paycheck of an employee who resigns with less than 72 hours’ notice will be made available at the employee’s regular workplace within 72 hours of the employee’s last day of work, unless the employee requests in writing that the paycheck be mailed.
  4. Final paychecks will include payment for wages owed, including any accrued but unused vacation time, minus any authorized or required deductions.
 


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