If a company terminates an employee or lay him/her off with no specific return date within the normal pay period, all wages and accrued vacation earned but unpaid are due and payable immediately.It is not acceptable to ask or require an employee to wait until the next regular payday for his/her final wages. A company cannot withhold a final paycheck. It is illegal to withhold a final paycheck to induce the former employee to:
- Return tools, uniforms, mobile devices, laptop computers, keys or any other items belonging to you.
- Pay back money that he/she owes to you.
- Turn in expense reimbursement forms.
Payment Due at Time of Discharge
The California Labor Code requires that employees receive all earned and unpaid wages at the time of termination from employment. If they do not, the company can be assessed waiting time penalties UP TO DAYS at the employees rate of pay. . In Smith v. The Superior Court of Los Angeles County, the California Supreme Court ruled that neither length of employment nor reason for termination changes this requirement. An employee’s service to an employer is completed either by completion of the hired-for task or at termination by the employer. Both constitute a discharge as defined by law. The “discharge” does not require an involuntary termination from an ongoing employment relationship. An employee hired to perform one day of service must be paid at the end of that day.
Payment Location and Method
Terminated employees must be paid at the place of termination. The place of termination is the employee’s location, not the company’s. If the company terminates an employee who is not at their place of business, such as an employee who works remotely, they must be prepared to deliver the final paycheck at the moment they say, “You are fired.” Otherwise, they must pay the employee up until the date that he/she will actually receive his/her final pay.
