What Are an Employee’s Rights After Job Termination?

California law is highly protective of workers. These protections extend even after the employer terminates employment.

The COVID-19 pandemic forced many employers to scramble to comply with California’s employee termination laws. Many of them were unable to do so. But regardless of the reason for non-compliance, employees still retain certain rights after a layoff, furlough, or termination.

Here are some of the rights that employees have after losing their jobs.

Termination of Employment in California

The default form of employment in California is at-will employment. This means that an employer can terminate most employees for any reason or no reason, with some exceptions. 

These exceptions include:

Discrimination

Employers cannot fire employees because of their membership in a protected class. Categories of workers who are protected from workplace discrimination include those who may be targeted for race, color, nationality, gender, religion, or old age.

Protected Activities

Employees can exercise their legal rights without fearing termination. For example, an employer cannot fire an employee for using accrued sick time to care for an ailing child.

Retaliation

Employers cannot retaliate against employees by firing them. Thus, an employer cannot fire an employee for speaking out about poor working conditions, filing a discrimination complaint, etc.

Public Policy

California protects some activities to ensure that employers do not interfere with public policy. For example, employers may not fire employees for taking time off to testify in court or serve on a jury.

If an employer fires an employee in violation of California or U.S. labor laws, the employee may have a cause of action for wrongful termination.

Rights Under California Employee Termination Laws

At-will employees in California have rights during and after job loss. Under California law, “termination” means that an at-will employee quits, is fired, or is laid off. 

Some of these rights include:

Final Paycheck

Employers must give employees their final paycheck immediately after termination of employment. If the employee quits with more than 72 hours’ notice, the employer must give the final paycheck to the employee on the employee’s last day. 

If the employer fires the employee or the employee quits with less than 72 hours’ notice, the employer has 72 hours to prepare the final paycheck and deliver it to the employee.

The amount of the final paycheck must include all of the income earned but not paid. This includes all salary, wages, and overtime earned.

Occasionally, an employer misses the deadline or fails to pay the entire amount due to the employee. The employer must pay the employee a penalty equal to the average daily wage for each day that it fails to pay the full amount due. This penalty accrues for up to 30 days.

If the employer disputes the amount due, it must pay the undisputed amount to avoid the daily penalty until the State of California can resolve the wage and hour dispute.

Compensation for Paid Vacation

California’s employee termination laws require the employer to pay the employee for any accrued paid vacation time (also called paid time off or PTO). The employer calculates the compensation due to the employee based on the amount of vested PTO multiplied by the employee’s final wage at the time of termination.

The mandatory compensation does not include paid sick days. Under California’s labor laws, employers do not need to pay employees for unused sick days at the time of termination.

Access to the Health Plan

One of the greatest concerns among workers is health insurance. With the employer-based health insurance system in the U.S., employees often ask, “After being laid off, what are my rights to health insurance coverage?”

Under both federal and California state law, employers must allow terminated employees to have access to the business’s health plan for up to 36 months. The federal law, called COBRA, requires employers to provide access to the plan for 18 months when an employee quits or is terminated.

A California state law, known as CalCOBRA, supplements the federal law in two ways.

Small Employers

COBRA only covers businesses with 20 or more employees. CalCOBRA covers employers in California with two or more employees.

Additional Time

Employers that have between 2 and 19 employees are not covered by COBRA. CalCOBRA covers these employers and requires that they provide 36 months of access to the health plan they carry.

Employers that have 20 or more employees are covered by COBRA and must provide 18 months of access to the company health plan. CalCOBRA adds 18 months so that former employees of these businesses also receive 36 months of access to the company health plan.

Warning of Layoffs

Workers also have rights immediately before termination of employment. At-will employees usually have no right to a warning before being terminated. But employees may wonder, “After hearing rumors about being laid off, what are my rights to being warned that I will lose my job?”

Under both federal and California employee termination laws, employers must warn employees of mass layoffs. Generally, a business of 100 or more employees must provide 60 days warning for layoffs of more than 50 workers.

A violation of the layoff warning laws gives employees the right to claim back pay and benefits for up to 60 days.

Contractual Benefits

Many workers in California have employment agreements rather than working at-will. Some examples include concert workers, artistic performers, and laborers on motion picture productions.

Contract workers can have additional benefits due upon termination under their contracts. For example, a contract worker might negotiate a deal in which the entire salary comes due if the employer terminates the contract before its term ends.

Another form of contractual benefits comes from collective bargaining agreements. Union workers may have specified benefits from the employer or the union that become payable upon termination.

Protecting Your Employee Rights After Termination

Under California’s statutes of limitations, employees usually have three years to dispute employment matters. But you should consider speaking to an employment lawyer as soon as you discover a violation of your rights after a job loss. You must act quickly on some disputes to document your claims and begin the administrative or judicial process to resolve them.