Recently I have helped several former employees who were laid off but were not given their final wages which included the hours they had worked just before being laid off, earned Paid Time Off, and commissions. Many employers do not realize that waiting time penalties attach daily up to 30 days if wages are owed after the final pay.
If you terminate 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. You 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, you can be assessed waiting time penalties. 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.