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Final Paychecks – Make Sure You Get it Right!

27210502_s (2)California employers are required to follow strict procedures when paying an employee’s final wages. There are specified requirements for the time and manner in issuing a final paycheck. The rules governing the payment of final wages can differ depending on the specific facts surrounding the employee’s departure.

Terminated employees

If an employer fires an employee, all wages that have been earned but unpaid at the time of discharge must be paid immediately upon termination. There can be an exception to this general rule, but you should seek legal advice regarding your business’s situation.

Laid-off employees

In California, an employee that has been laid-off without a specified date of return to employment is treated the same as a terminated employee. In other words, all earned wages are immediately due and payable upon discharge.

Employees who quit

If an employee that does not have an employment contract for a specified term voluntarily quits, the deadline to pay final wages depends on the timing of the resignation. If the employer is given at least 72 hours’ advance notice of the resignation, final wages must be paid on the employee’s final day of work. If the employer is not provided with a minimum of 72 hours prior notice that the employee is quitting, the final paycheck must be issued within 72 hours after notice was given.

In order to ensure that your company does not get into trouble when issuing a final paycheck, your policies and procedures should clearly and thoroughly outline how to handle the payment of final wages. There should be a policy for each scenario listed about and the timeline for issuing final paychecks.

The Swenson Law Firm is here to help. Our attorneys focus on employment matters and business lawsuits. We are located in Sacramento County, and serve clients throughout California. To schedule your initial consultation, call us at 916-333-0833.

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