Compensation for work is essential for financial stability, especially when leaving a job. Sometimes, employers will take their time giving former employees their final paychecks. If they take too long, these employees can be entitled to more money than just what they earned in their last pay cycle. Understanding final paycheck laws, as well as how they affect employees and employers, is necessary for understanding the full scope of workers’ rights.
What Is California’s Final Paycheck Law?
Employees who leave their jobs are entitled to their final paycheck under California employment law. After 72 hours of giving notice of their resignation, employees must receive their final paycheck. Payment for fired employees must be made on the day of termination. According to California’s last payment legislation, the employee’s final check must contain all unpaid salaries and business expenses. The financial amount of the employee’s unpaid benefits must also be included in the final payment, like paid vacation days.
Employees who are fired and do not receive their final payment on their last workday are eligible for reimbursement. They can receive pay from their employers for each additional day that they were forced to wait. The same fines are recoverable from employees who resign but do not get their final salary within three days. For every day the employee must wait, up to a maximum of thirty days, they will be penalized with one full day’s pay. Employers who break the final paycheck law in California risk paying more in waiting-time fines than they did for the final paycheck.
What Penalties Do Employers Face for Paying Final Paychecks Late?
Employees have the right to file a claim for damages related to their final salary. If their employer failed to send them a final paycheck on time, they can file a wage and hour claim. In California, an employer is required to pay a final paycheck on an employee’s last day of work or within 72 hours of that last shift. This final payment shall include all accrued and unused vacation time and any paid time off. The following sanctions may be imposed on an employer if they fail to give former employees their final paycheck:
- The waiting time fine is eight times the employee’s hourly wage if they work 40 hours per week.
- As a result, if an employee makes $20 per hour, they are owed $160 for each day that their final paycheck is delayed by the company.
- If a worker is employed on a part-time schedule, the penalty is based on the employee’s daily hours. It varies depending on the formula used.
- To be penalized for working overtime, it must be routinely planned.
Even if an employee receives their final paycheck after the deadline, their employer can still be eligible for waiting time penalties if they do not get all their money right away.
Can an Employer Withhold Part of an Employee’s Final Check?
According to California law, employers can legitimately withhold the following amounts from an employee’s pay:
- Deductions mandated by federal or state legislation, like income taxes or garnishments.
- Deductions for insurance costs, hospital or medical fees, or other expenses. These must not constitute a rebate or reduction of the employee’s pay. They must also be specifically allowed in writing by the employee.
- Deductions permitted by salary agreements that are made specifically to pay for a pension or health insurance.
Sometimes, there is a cash deficit, broken or lost company property, or loss of corporate equipment due to human error or accident. The employer is not permitted to lawfully deduct this amount from the employee’s wages. Losses that arise separately from an employee’s work, or that are simply the result of negligence, are unavoidable. The employer is required to endure such losses as part of owning a business.