California laws require employers to give a last pay check (final paycheck): within 3 days if employee quits, or same days if employee is fired. There are penalties against employers who are intentionally not paying their employees once they left their jobs. There may be some extra money left for employees once they quit or are fired. However, some employees refuse to give those wages to the former employees. This page explains waiting time penalties California employees and employers must know.
The waiting time penalty is in effect whenever an employer intentionally withholds earnings owed to an employee. There is first something called a “good faith dispute” that occurs before a penalty is assessed. Additionally, it has to be proven that you worked for an employer and then quit, or were fired/laid off.
Any compensation that could be considered as part of your wages would have to get paid to you. This would not include expenses. However, overtime wages would be included, particularly if overtime is a regularly-scheduled occurrence. When overtime is sporadic, is will not get factored into calculations regarding a penalty. You may read the waiting time penalty statute at Labor Code 203.
To calculate waiting time penalties California employees and employers must start with the employee’s usual daily pay rate. This figure is found when you multiply your daily earnings by the amount of days you weren’t paid. The cutoff limit is up to 30 days. This means you can get up to 30 days’ worth of earnings. Once the penalty is paid to you, there be no more accrual of further penalties. When you file a complaint against your employer in court, you start the process of getting a waiting time penalty. Filing a claim with the Division of Labor Standards Enforcement will not be considered as you taking action.
15. Are you still eligible for getting the waiting time penalties if you intentionally waited to pick up your final paycheck?
Yes, but there is a catch. Let’s say you quit your job on a Friday and didn’t get your paycheck until the next Monday. You asked your boss when you would get paid and he told you that you can pick up your final paycheck or last paycheck now. However, you intentionally waited for another 10 days. This would make it 13 days since you left your job. In this situation, you would be owed a waiting time penalty of 3 days. You cannot get 13 days worth of the penalty because you intentionally waited to get your final paycheck or last paycheck.
14. If your employer waits two weeks to mail you your final paycheck, how much of the waiting time penalty do you get?
If you quit and then waited two weeks to get your final paycheck or last paycheck from your boss, you would have the right to getting two weeks’ worth of the waiting time penalty. According to the Labor Code, you need to let your boss know at least 3 days’ notice before you quit that you would do so. When you do, while quitting on the day you said you would, you start the clock for the penalty. The day that you finally get your final paycheck or last paycheck is the day that is considered the end of the waiting time.
13. Let’s say you quit your job without providing 3 days’ notice to your boss. You were not given the rest of what is owed to you before you quit. Do you have to return 3 days after leaving and ask for your final paycheck to get the penalty?
It will depend. There will be a penalty that applies when you quit without giving your boss notice ahead of time. This is also true if you don’t come back to your old workplace to ask for the wages owed to you. Sometimes, your old employer may try to stop you from coming back for your final wages. They may alternatively tell you they’re not available yet.
When you quit your job without giving your boss at least 3 days’ notice, you are owed your due wages via mail. You have to provide a mailing address in this sort of situation. When you do so and are still not paid, there will be a waiting time penalty applied.
12. Let’s say you were let go from your job 2 weeks ago. You did get paid all wages owed to you in the last paycheck, but business expenses were not reimbursed for another 10 days. Can you get the waiting time penalty?
No, you cannot. This is a penalty that is only given when your employer does not mail you your wages. Since all wages were paid, there is no penalty owed to you. Furthermore, business expenses are not considered to be wages.
11. Let’s say you were laid off or fired 2 weeks ago. You were paid all wages due to you in the last paycheck, but you weren’t paid for your vacation time for another 10 days. There was a total of 15 days owed in vacation time. Can you receive the waiting time penalty?
Yes, you can receive the waiting time penalty on your last paycheck. The amount you can receive is 10 days’ worth of earnings. Since vacation time is considered wages in California, the penalty would apply. The only time it is not considered wages is in certain union agreements. If you have unused vacation time by the time you no longer work somewhere, you have to get paid out. The rate has to match your final pay rate.
10. How do you figure out what the daily pay rate should be on your last paycheck? Also, how do you calculate what the waiting time penalties are supposed to be?
Figuring out how the calculations for the daily pay rate and waiting time penalty are calculated can be best illustrated with an example.
Let’s say there was a bank teller who was fired on Friday, February 7th, 2020. They were not given all of the wages due to them until Monday, February 17th, 2020. This would mean that 10 days had elapsed. This bank teller would normally work 35 hours each week. Every week, they would make $8/hr, up until they were fired. Here is how the daily pay rate would be calculated:
- 35 hrs/wk ÷ 5 dys/wk = 7 hrs/dy
- 7 hrs/dy x $8/hr = $56/dy
- The $56 would be the daily pay rate.
Here is how you would figure out the waiting time penalty:
- 10 dys x $56/dy = $560
- The $560 would be the waiting time penalty.
9. Does overtime get included in the calculations of the daily pay rate when it comes to the waiting time penalty on last paycheck?
The overtime is dependent on the situation. When overtime is given on a regularly-scheduled basis, it gets included in the last paycheck. When your overtime is only occasionally earned, it does not get included in the calculations for last paycheck.
8. Do you get up to 30 days’ worth of wages in the form of a penalty if you aren’t paid you final earnings?
No, you do not. If you get paid 15 days beyond when you were supposed to get your final earnings, you don’t get that. You are not going to get up to 30 days’ worth of the waiting time penalty. Just because you filed a wage claim does not mean you took what is considered to be an action. If it was an action, it would stop the waiting time penalty from getting accrued.
7. Let’s say you were let go a week ago and were not paid all the wages owed to you. The reason you were given was that your boss didn’t have the money. Can they use that as a valid excuse, in order to avoid paying the penalty?
No, they cannot. Just because a company is unable to pay the penalty does not absolve the company of the requirement to do so. They will still be liable to pay the waiting time penalty.
6. If you are a part-time or temp employee, do you also get to take advantage of the waiting time penalty?
Yes, do do. Anyone who is employed gets to benefit from the waiting time penalty. The only people who don’t are independent contractors or volunteers. This is only because they are not officially categorized as as employees.
5. Are only the days worked used in calculating the waiting time penalty?
No. Every single day that passes gets included in the computation of the penalty. That would include weekends, holidays, and days when you would not have been working.
4. When you receive a salary, is a month considered the same as 30 days, when calculating the waiting time penalty?
No, it is not. A month and 30 days will be different from one another. When you earn a salary, you are generally working for 21.6 days each month. The waiting time penalty takes every day into account when making calculations. This means it would equal 30 days’ worth of earnings. The penalty would be quite a bit more than your salary.
3. What can be done if your employer doesn’t pay you your final earnings within the legally-prescribed time frame?
If you find yourself in this sort of situation, you can file a wage claim with the office of the Labor Commissioner. Your other option is to sue your employer in court to get back the wages owed to you. This will also be when you could obtain the waiting time penalty.
2. What are the steps taken after you file a wage claim?
Once you file your wage claim with the nearest DLSE office to you, it gets assigned to the Deputy Labor Commissioner. This is the individual who will ascertain how to move forward. They will make their decision after taking into account the information they have on the claim. There may be a decision to refer it to a conference or hearing, or just get it dismissed.
When it’s decided that a conference will be held, both you and your employer will be provided information on it. You will receive a notification in the mail specifying the day, time, and location of the conference. The goal of this event is to ascertain whether your claim is valid. It will also be a priority to see whether it can be resolved without moving to a hearing.
If the claim cannot be remedied at a conference, it gets referred to a hearing or it gets dismissed. The latter occurs when there is not enough evidence to support a claim. During a hearing, both you and your employer will testify, as will any witnesses. Everything is done under oath and it is all recorded. Once a hearing is over, there will be an Order, Decision, or Award given to both you and your employer.
Either you or your employer have the ability to appeal the Order, Decision, or Award. If it is appealed, there will be a date set for a trial. This is when both you and your employer can bring in any evidence or witnesses. Anything brought forward to the previous hearing will not be used in determining when the decision of the trial will be. If you are unable to hire representation, the Division of Labor Standards Enforcement will give you representation. You may learn about waiting time penalties from the Division of Labor Standards Enforcement.
1. Let’s say you win during a labor complaint, yet your employer does not pay or appeal the ODA. What happens then?
If your employer has not appealed the motion that is in your favor and didn’t pay the ODA, it will be entered as a judgment. This decision will be made by the DLSE. This decision will have the same effectiveness as any monetary judgment would have. You also have the option of either getting the judgment on your own or having the DLSE get it for you.
Brad Nakase, Attorney