How Long Can An Employer Hold Your Check After Termination?

If an employee is terminated from their job, the employer must pay the employee their final paycheck on the same day terminated.

By Brad Nakase, Attorney

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How Soon After Termination Must a Worker Be Paid In California?

In California, all businesses are lawfully obligated to compensate their workers after their last paycheck.

Many employees wonder what their final paycheck will consist of. A worker’s final check typically includes their compensation since the last paycheck.

Employees also wonder how long they need to wait for their closing paycheck. Unfortunately, the answer to this question is not as definitive since it depends on the firing circumstances. For example, if the worker quits their job, the time frame of their last paycheck may differ compared to if the worker was fired.

Despite these differences, all California workers must remember that they possess rights regarding their final payment. For example, the employee can seek legal counsel if an employer delays the final paycheck. In addition, sometimes, businesses fail to send workers their final checks, thinking that the employee will forget or be too busy to collect them.

If these violations occur, California workers should contact our employment lawyer for workers. All workers have the right to collect the compensation their employers owe them, regardless of why they were terminated. If the employee worked a shift and their employer did not pay them, they may have a legal case against their employer.

When an Individual is Fired in California, When Do They Get Paid?

In California, the general rule is that the employer must pay the individual as soon as they fire the worker.

The closing paycheck should include the worker’s unearned pay up until that point.

Many part-time employees are unsure whether this rule applies to them. However, in California, all employers must provide the last paycheck to all workers that are:

  • Part-time employees
  • Temporary employees
  • Short-Term employees
  • Exempt employees

Therefore, all workers in California should be assured a final paycheck. However, if the employer does not issue a final check or the closing check’s amount is wrong, the worker must contact an experienced lawyer immediately.

When an Individual Quits, Do They Still Receive a Closing Paycheck?

If employees quit their jobs in California, the last paycheck issue grows more complex. For workers who opt to quit, getting their last check is contingent on the amount of notice they give to the business.

For example, if the employee left their job but gave the company a minimum of 72 hours warning, the employer must issue their paycheck on the last day.

However, when an employee quits with little or no advance warning, the employer has more time to issue the check, and the check may get held up.

However, when workers do not provide notice, the employer must issue the ultimate paycheck within 72 hours. In this way, the law protects the worker and ensures they can collect their final check.

What Is Termination Pay?

Termination pay in the state of California includes:

  • Double time pay
  • Overtime pay
  • PTO (paid time off) that the employee has not used

Employees should check their paystubs to ensure that their employers compensate them correctly. Termination pay must account for all the hours the employee logged since the last paycheck.

Not all employers include unused sick compensation in their employees’ closing checks. This inclusion may rely on the worker’s employment contract. The worker can review the company’s handbook and ask human resources when determining if their last check will include sick pay.

Employers sometimes “hold onto” closing checks, especially if hostile emotions are involved. However, this practice is illegal since workers have a right to be paid for the hours they worked one last time.

Some businesses try to force workers to sign nondisclosure agreements or other documents in exchange for handing over the worker’s last check. This practice is also illegal in the state of California.

What About Vacation Time, And How Does That Fit Into An Employee’s Final Paycheck?

Some employment contracts dictate that workers cannot take vacation until they have worked a the company for one year.

While this is legal, the business must pay out its collected vacation hours when the employee quits or is fired.

How is the unpaid vacation time calculated? First, the employee should note the time the employee was employed before their tenure ended.

Many employees do not want to return to their former place of work, especially if they left on a bad note or were fired abruptly or heedlessly. The business must do so if a California worker requests that their employer send them their final check by mail. Employers cannot make it mandatory that their workers pick up their closing payments in person.

What Happens if a Person’s Paycheck is Late in California?

California labor laws require that employers do not delay sending employee paychecks. Therefore, regardless of whether the employee quit or the employer fired the worker, businesses must not make workers wait for their ultimate paychecks. If an employer does so, they may be penalized.

When a company does not issue a final paycheck, it must pay a “waiting time penalty.” The “waiting time penalty,” which is paid each day, depends on the worker’s daily pay rate.

How is the daily pay rate calculated? We come up with this figure by adding together a year of:

  • The worker’s base wages
  • The worker’s bonuses
  • The worker’s vacation pay
  • The worker’s commissions

We then divide this yearly figure by the number of weeks in a year (52). We then divide that figure by five.

Employers taxed with this penalty have to pay it for 30 successive workdays. However, at the end of the 30 days, the employer does not need to pay the fee.

If at this point, the employee has still not received their last check, they should contact an attorney for assistance. The employer may sometimes pay the fee for 30 days and then assume they can avoid paying the final check, which is unfair to the employee. It is illegal in California for companies to refuse to pay employees the wages they are owed.

When Should California Workers Contact an Employment Attorney?

California labor laws ensure employers pay their workers adequately and treat them equitably. This treatment includes issuing workers a final paycheck after they quit or their employer terminates them.

However, some employers attempt to avoid these rules. When this occurs, employees must bring a claim against the business to collect their rightfully owed compensation.

Contact attorney Brad Nakase today if you have not received your last paycheck from your former job. Our skilled California attorneys will help you collect the money your former company owes you, so you can move on with your career goals.

Have a quick question? We answered nearly 2000 FAQs.

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