Good-byes are tough …well, not in the case of that truly dreadful employee you’ve finally managed to fire. But you could still be in for headaches if you botch the strict California final pay rules.
Final Pay Rules for Involuntary Terminations
For employees who are involuntarily terminated, all earned compensation must be paid on the last day that the employee performs any work for the employer.
This means that if an employee is unexpectedly fired (perhaps for egregious misconduct), the employee must be paid all compensation that the employee is owed at the time the employee is terminated if that is the person’s last day. It is not permissible to wait until the next regular payday or to simply put the employee’s final paycheck in the mail.
However, if the employee is instructed to remain on the employer’s premises while his or her final paycheck is prepared, and the employee refuses to stick around, there is no penalty if you send the employee the final paycheck via overnight mail or courier.
Similarly, if an employee is instructed to come to the employer’s offices to pick up his or her final paycheck and delays doing so, you will not be charged a waiting time penalty.
Final pay in California—webinar this Thursday!
Final Pay Rules for Voluntary Resignations
Employees who resign must receive all earned compensation within 72 hours of the last day the employee performs any work. As with involuntary terminations, if a resigning employee delays picking up his or her final paycheck, the employer will not incur a penalty as long as the check is made available to the employee.
Location, Location, Location
Final pay must be made available to an employee who is terminated or who resigns at the location where the employee normally works, or deposited into the employee’s account via direct deposit.
Final paychecks may be mailed to resigning employees as long as they receive the check within the 72-hour time frame.
Note that employees cannot be required to travel to another location to retrieve final pay.
Tomorrow, we’ll look at the penalties you face if you fail to provide final pay within the established timeframes.
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How To Survive an Employee Lawsuit: 10 Tips for Success today!
It seems like, in the eyes of law, one of the most important things is that you make a good faith effort to get the employee the final pay promptly.
It seems like, in the eyes of law, one of the most important things is that you make a good faith effort to get the employee the final pay promptly.