California law mandates employers to provide final salaries and wages to employees with 72-hour notice, imposing a 30-day waiting time penalty. This penalty, equivalent to the employee’s daily pay rate, applies to all working days. Continue reading below for additional information from an employment attorney on waiting time penalties of Labor Code 203 in California, which can be quite high.
The Wage and Hour Laws of California
Most California employees are required to receive their wages at least twice a month on pre-arranged regular payday days. Employers must post a notice explaining normal pay dates, as well as the time and place of advance payments.
In addition, any work you did within the first 15 days of the calendar year requires payment between the 16th and the 26th of the month. Payment will be due for work did between the first and tenth of the next month and the sixteenth and last day of the current calendar month.
Extra Hours Spent in
Employees must receive overtime pay by the next regular pay period’s payday to get for additional hours you work beyond your usual shift.
Exceptions to Regular Pay Days
Exempt employees may face different payday requirements than nonexempt employees due to their exclusion from federal and California wage and hour standards. White-collar workers, sometimes referred to as exempt employees, could include:
- Executive staff members
- employees in administration
- Professional staff members
Employees may get their full wage once a month, on or before the 26th day of the month.
Furthermore, payment arrangements may vary amongst employees covered by a collective bargaining agreement.
Labor Code 203 of California
A waiting time penalty under California Labor Code Section 203 is imposed by employers that knowingly refuse to give their dismissed or resigned employees their last paycheck. The penalty equals the employee’s daily wage for each day that the final payment fails to arrive, up to a thirty-day maximum.
Labor Code Section 203 is as follows in its entirety:
- (a) Wages of an employee who is fired or quits must be paid as a penalty from the date of termination at the same rate until paid or until legal action is taken; however, the penalty cannot last longer than 30 days. This applies to employers who willfully fail to pay wages under various sections without reduction or abatement. An employee is not entitled to any benefits under this section for the period during which they avoid payment by hiding or refusing to appear for work, or by refusing to accept payment when it is fully tendered to them, including any penalties that may have accrued under this section.
(b) You may file a complaint for these penalties at any moment before the statute of limitations on an action for the earnings from which the penalties originate ends.
California Law of the Final Paycheck
There are regulations in most states that specify when workers must get their last payment. In certain states, like California, the length of time varies depending on whether the individual was let go or quit. California has one of the toughest wage payment statutes in the nation.
An employee has been laid off
Workers are the last to get their pay, thus they receive their final paycheck right away upon termination. This covers workers who are let go or fired for good reason or no reason at all.
The employee must make payment at the location of discharge unless they prefer mailed or authorized direct deposit. It should be noted that employers are prohibited from offering an employee a final salary in exchange for the employee surrendering rights or freeing the employer from liability; such an arrangement is void and could result in criminal charges against the employer.
Employee Resigns
When an employee leaves, the regulations change a little bit. If an employee quits without giving notice, the company must give their last salary within 72 hours. On the other hand, if an employee leaves their job and provides at least 72 hours notice, they will be eligible for their last paycheck on the day of their departure.
Labor Code 203: Final Paychecks
Final pay is determined by subtracting any unutilized paid time off or vacation from the employee’s total amount of paid time off, as well as any unpaid earnings for labor completed while they were employed. While paid vacation time is not mandated by law, businesses who offer it must recognize it as a benefit equal to pay.
Some states mandate companies to cash out excess vacation time, while others do not. Regardless of the employer’s policy, California employees have the right to all excess paid time off (PTO) upon termination.
Rules Regarding Final Pay Exceptions
Penalties for waiting periods solely apply to the employee’s “wages.” Wages under California law may include the following:
- A fixed pay rate;
- Hourly salary;
- Commissions;
- Payment by the piece;
- A set price for each project;
- Paid leave, including paid time off for vacation and illness;
- Contributions to a vested retirement plan; and
- The employee benefits include lodging, board, clothing stipends, paid sick leave, and food allowances.
In California, employees may face waiting period penalties for non-payment of various salaries and benefits, regardless of their purpose.
Certain industries may have policies regarding final compensation that prevent employers from providing the last paycheck to terminated employees. This comprises:
- A portion of the seasonal food producers’ workforce is collective.
- Personnel employed in the film business
- Workers in the oil and drilling industry
- Employees of live theater or musical venues
- Temporary agency employees
- The collective bargaining agreement that covers employees has clauses about last payouts.
Labor Code 203: FAQs
What is the California Labor Code Section 203 statute of limitations?
While a “penalty” is mentioned in Labor Code § 203, the California Supreme Court has ruled that claims for wages are subject to a three-year statute of limitations rather than the one-year statute of limitations that governs claims for penalties.
What does California’s Labor Code 230 mean?
(e) If an employee notifies the employer of their position as a victim of crime or abuse, or if the employer has real knowledge of the status, the employer is not permitted to fire, discriminate against, or take other adverse action against the employee due to this status.
What is California’s waiting time penalty?
The penalty is computed by multiplying the daily wage by the total number of days the employee was not paid, up to a maximum of 30 days, and is measured at the employee’s daily rate of pay.
Labor Code 203: Conclusion
The Deputy Labor Commissioner receives your salary claim once it is submitted to the nearest DLSE office. This person has the authority to dismiss it outright or to send it to a conference or hearing.
Determining if your claim is valid is the aim of a conference. Encountering a solution without resorting to a hearing will likewise be of utmost importance. If a conference cannot resolve the matter, an investigation is set to drop the claim. Insufficient evidence to substantiate a claim leads to a later situation. Witnesses may testify during the hearing, in addition to you and your employer. Everything is recorded and done under oath. Following the hearing, your employer and you will get an Order, Decision, or Award.
You or your employer may file an appeal of the Order, Decision, or Award. In the event of an appeal, there will be a trial date. Both you and your employer are now able to present any witnesses or evidence. Everything said at the previous hearing will not affect the way decisions are make during the trial. The Division of Labor Standards Enforcement will provide you with representation if you are unable to obtain one.
If you win, you’ll be paid the outstanding pay plus any waiting period fines, which could last up to 30 days.
