What Happens When Employers Do Not Pay Employees on Time?
Under California law, employees are entitled to receive their paychecks on time. If an employer does not comply with the law, they are subject to penalties.
According to California Labor Code Section 210, employers will receive a $100 fee if they are late pay their employees. This is the penalty for “any initial violation,” meaning the first time it happens. For any additional violation, employers will receive a $200 fee and must also pay 25% of the withheld amount.
Sometimes, an employer might willfully or intentionally pay an employee late – for instance, if there is an ongoing lawsuit or disagreement about wages. In this case, the employer faces a penalty of $200 and may be required to pay 25% of the withheld amount.
If an employer does not pay an employee for overtime on schedule, the employer may face similar penalties.
What If a Final Paycheck Is Late?
In California, when an employee is terminated, a final paycheck must be paid:
- On the employee’s last day of work
- Within 72 hours of the termination
What Can an Employee Do If Paid Late?
An employee who does not receive his or her paycheck on time has a few options. He or she can:
- File a complaint with the California Division of Labor Standards Enforcement (DLSE)
- File a claim with a federal agency
- File a wage and hour lawsuit against the employer
It is possible that the employer will have to pay interest as well as the late paycheck. The court may also impose penalties on the employer.
That said, there are circumstances in which employers may have a legitimate excuse for not paying employees on time. For instance, there might be a banking or technical issue behind the delay. In this case, the employer is not subject to penalities.