Fired, But Not Given Your Final Pay?
Updated: May 29, 2020
FIRED, BUT NOT PAID?
Your Employer May Owe You More Than Just What is Unpaid!
The California Labor Code requires an employer to pay an employee promptly upon termination, whether voluntary (i.e. quitting) or involuntary (i.e. firing), with at least 72-hour notice. If an employee immediately quits and walks off the job, the employer has 72-hours to pay the employee all wages owed.
WHAT ARE “WAGES?”
The California Labor Code defines wages to include all forms of compensation for an employee’s personal services. Wages can include salaries, hourly pay, piece-rate pay, money paid by check, cash, commissions and bonuses, overtime pay, vacation pay, and non-cash payments.
WHAT ARE “WAGES OWED?”
“Wages owed” is a term used to describe an employee’s unpaid or underpaid wages. When an employer fails to pay an employee in full amount for the employee’s work, the employee is still entitled to receive either full payment or the remainder of the underpaid wages. In short, the employer still owes wages to the employee.
WHAT IF AN EMPLOYEE WORKED OVERTIME BUT WAS NEVER PAID AT THE PROPER RATE OR AT ALL?
In most circumstances, if an hourly employee works over 8-hours a day, the employer is required to pay the employee at one and a half (1.5) times the normal rate of pay. If an employer fails to pay an employee overtime, then the employee quits or is terminated, the employer may still owe the employee for unpaid overtime wages.
WHAT IF AN EMPLOYEE WAS OFFERED VACATION PAY BUT IT WAS NOT PAID OUT AT TERMINATION?
In California, employers do not have to provide employees with vacation pay (this is different from sick-pay). Employers who do offer vacation pay are required to pay out accrued vacation time within the proper time-frame, determined by the type of termination, voluntary or involuntary (see above).
WHAT IF AN EMPLOYEE HAS ACCRUED SICK LEAVE?
(NOT Wages Owed)
While employers must provide for the accrual of paid sick leave (PSL), it is not considered a “wage.” Accordingly, since only wages are required to be paid to an employee upon termination, employers are not required to pay out accrued PSL.
WHAT IF AN EMPLOYEE EARNED COMMISSION OR INCENTIVE PAY BUT IT WAS NOT PAID OUT AT TERMINATION?
Earned commission or incentive pay is considered a wage. This is not as straightforward as the above, but know that commissions and incentive pay is considered a wage and should be paid out upon termination. Given the complexity of this segment, if you believe you’re owed commission wages, you should contact an attorney to discuss your individual circumstances.
WHAT IS THE PENALTY FOR NOT PAYING AN EMPLOYEE ALL WAGES OWED UPON TERMINATION?
Under the California Labor Code, employers must pay all wages by the time-frame governing the type of termination, voluntary or involuntary. Should an employer fail to do so, the employer may be liable for “Waiting Time Penalties.”
WHAT ARE “WAITING TIME PENALTIES” AND HOW ARE THEY CALCULATED?
If an employer has failed to pay an employee all wages owed upon termination, the California Labor Code will “punish” the employer by requiring the employer to pay a penalty for making the employee wait for payment – a “waiting time penalty.”
An employer may be liable for waiting time penalties each day an employee’s wages remain unpaid – up to a maximum of 30 calendar days. The penalty amount is based on an employee’s daily salary, multiplied by the number of days the employee had to wait, up to 30-days. NOTE: This penalty is in addition to the unpaid wages.
For example, if an employer makes an employee wait for 14 days to receive all wages due – the employee may be entitled to penalties for 14 days. If the employee made $120 per day (8-hours x $15), then the penalty would $1,680 ($120 x 14-days). The employer would be liable for the penalty PLUS all unpaid wages.
If the employer made the same employee wait 30+ days, then that employee may be entitled to $3,600 ($120 x 30-days). The employer would be liable for the penalty PLUS all unpaid wages.
IF AN EMPLOYEE IS OWED WAGES, WHAT DOES THAT MEAN?
There are very strict time limits to bring an action to recover owed wages. Typically, an employee has 3-years to bring a claim for unpaid wages and related penalties but this time may be shortened or extended based on individualized circumstances. If you or someone you know was terminated or quit and you had to wait, or are still waiting, to get paid, you should promptly seek an attorney to discuss your possibilities.
Disclaimer: All materials have been prepared for general information purposes only to permit you to learn more about Lansdown Law, its services, and experience. The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice.