What Are Waiting Time Penalties in California?
Under California Labor Code Section 203, employers may be subject to penalties if they do not pay an employee their final paycheck in a timely manner. Whether willful or unintentional, if your employer has not paid you your final paycheck, you may be entitled to waiting time penalties, which could include additional pay for you.
It doesn’t matter how your job ended, whether you resigned or were terminated. If your employer hasn’t paid you, an employment law attorney in San Diego can review the circumstances and provide guidance on any protections you may not know about.
What Are Final Wages & When Are They Due?
California law requires employers to pay final wages. Your final wages would include any regular and overtime pay for the hours you worked, any commissions you’re entitled to, your piece-rate payments, and any earned and unused paid time off.
Your final wages could also include employer retirement contributions. For example, if you have a 401(k) and your employer matches your contribution, your final paycheck must include both your retirement contribution and your employer’s matching contribution. Under California law, wages encompass more than just your hourly pay or salary.
The timing of when you have to be paid depends on whether you resigned or were terminated. We’ll look at both scenarios here.
Time of Pay When You Resign
If you gave your employer at least 72 hours’ notice before your last day, you must be paid your final wages on your last day. Your employer cannot wait until the next pay period. They must pay your final wages on your last day of employment, either by direct deposit or by physical check.
If you did not give your employer at least 72 hours’ notice of your resignation, such as when you quit on the spot, your employer has 72 hours to pay your final wages. Again, they cannot wait until the next regular payroll run. They must pay you within this time period.
Time of Pay When You’re Terminated
A terminated employee must be paid all of their unpaid wages for hours they’ve worked up to and including the day of their termination. That payment must be made on the same day the employee is terminated.
Your employer cannot wait until their next pay period to pay your final wages. If you are terminated, your employer may hand you a physical check or schedule your direct deposit payment on that day.
There are exceptions to this requirement:
- Seasonal employees working in certain food industries must be paid within 72 hours of their termination date
- Employees in the movie industry must receive their final pay on the next regular payday
- Employees working in the oil industry must receive their final wages no later than 24 business hours after their termination date
Another crucial exception surrounds workers covered by collective bargaining agreements. If you’re covered by a collective bargaining agreement that specifically calls for a timeline on payment of final wages, the terms of the agreement will supersede any California law. However, if your collective bargaining agreement does not specify a time for payment of your final wages, then California law applies.
California does not require employers to provide paid time off, or vacation pay, to employees. If an employer does, however, they’re required to follow certain rules and regulations.
Paid time off is treated the same as other wages. If you don’t use all of your vacation time and you resign or are terminated, your employer must pay you all accrued and unused vacation time.
Here’s an example. Say your employer offers all employees 120 hours of paid time off each year. The company gives you 10 additional hours each month. You were hired in January, and you were terminated on September 30. You’ve taken 40 hours of time off this year. Because you worked nine months in the year, your total time off allotment would be 90 hours. Subtract the 40 hours you used, and you’re left with 50 hours of vacation time your employer must pay you as final wages.
Let’s put some numbers to this. Say you make $22 per hour. Besides your regular wages, your employer would owe you $1100 for your unused vacation time ($22 per hour * 50 hours).
If My Employer Fails To Pay Me on Time, What’s the Penalty?
For every day that your final wages aren’t paid, your employer is subject to a penalty equal to a full day of wages for you. Sticking with our example above, if you make $22 per hour and you regularly work eight hours per day, for every day your employer doesn’t pay you, you’re entitled to a $176 waiting time penalty.
This amount continues to tally each day for up to 30 days after your termination date. The penalty only stops accruing after 30 days or when all of your final wages are paid.
It’s important to note that this penalty tallies for every day, not just days you would have regularly worked. So this waiting time penalty could become quite substantial if your employer drags their feet.
To collect your final wages and any waiting time penalty from your former employer, you can try to resolve it directly with them, file a lawsuit, or file a claim with the state. The first option is unlikely to be successful and the second two options are complex legal matters which may require some legal guidance and support. No matter what, it’s important to remember that you have a legal right to your final wages in California.
Contact a San Diego Employment Lawyer Today
When you have questions about your final wages and whether your employer may owe you a waiting time penalty, don’t try to figure it out yourself. This is a complex area of California employment law that needs a skilled eye. An experienced employment lawyer can discuss your situation with you, determine whether your employer failed to pay you on time, and whether they’re required to pay you waiting time penalties.