When Must My Employer Deliver My Final Paycheck?

Final Paycheck is Due Immediately on Termination

Jasmine’s rent was due and she still had not received her final paycheck.  During the days before being fired, she’d been working long hours with little sleep and poor nutrition to meet deadlines.  She was paid a salary and given a fancy title, but she was doing daily menial tasks more than half the time.  She fell asleep at her desk due to work exhaustion, and when her boss found her, he showed no mercy.  He’d been looking for an excuse to fire her ever since she reported his unwanted repeated requests that she meet him for drinks after work.

You might guess Jasmine has a case for wrongful termination, but the retaliation went further.  “We’ll send your check out with the next payroll,” her boss said. “You’re fired.  Get your belongings and leave.” “I fell asleep because I was here ‘til 2:00 a.m. trying to finish that emergency project you gave me at 5:00 p.m.”  she protested. Her boss’s reply was “Get out, now.  Sleeping on the job is an immediate terminable offense,” The words were harsh, insulting, and coldly indifferent to Jasmine’s loss of financial security. Jasmine’s employer has multiple liabilities in this scenario, but the easiest one to prove is for the penalty of delaying her final paycheck.

California Labor Code Section 203(a) states: “(a) If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which he or she so avoids payment.”

Failure to pay final paycheck immediately means a 30-day penalty

The paycheck with all accumulated vacation pay or “paid time off” [PTO] pay is due immediately on termination.  The penalty is for the delay, and is not tied to days of delay.  The circumstances set the maximum but do not dictate that a lesser amount is mandated.  Always ask for the full thirty days, especially in a case like Jasmine’s where there is evidence of malice or vengeance as a motive for untimely payment. Heading number three calling the late penalties fee is almost always recoverable. Recent case law removes any obstacle from the case for the penalty.  Kao v. Holdiay (2017) 12 Cal.App.5^th 947, 963; Barnhill v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, 7 provides a definition of what “willful” means when the penalty is imposed for “willful” delay in paying the final paycheck.  Willful means an intent to pay later than immediately.  It’s that simple.  Previously in the law, a mistaken understanding of when the payment was due if held reasonably could be a defense.  More recent cases remove any excuse for late payment by imposing a tighter definition on “willful.”  “Willful” is any intent to deliver the check on a date later than immediately.  It no longer matters what motivates the intent, whether innocent or mistaken.  Diaz v. Grill Concepts Services, Inc. (2018) 23 Cal.App.5^th 859, removing the “good faith” defense allowed by the earlier cases of Amaral v. Cintas Corp. No. 2, (2008) 163 Cal.App.4^th 1157.  In Diaz, an HR agent failed to follow through with preliminary information about a change in the law that could affect the calculation of the workers’ pay scale.  The employer defended that the law changed but it was not aware of the law.  The court found the employer liable because the employer didn’t continue to track the law in anticipation of its passage.

Good faith belief that the final paycheck is not due is no excuse-period.

Being mistaken as to an employee’s legal status is not a defense.  For example, under the recent decision of Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5^th 903, an employer is more likely to wrongly pay its staff as “independent contractors” and to deny them their timely final paychecks.  This could mean the employer is liable for 30 days’ pay for hundreds of employees, in addition to a panoply of other wage liabilities.

Conclusion – Get your final paycheck:

A claim for 30 days penalty should be a standard part of your claim for recovery. If you have been misclassified as an independent contractor, not only you many other so-called independent contractors maybe collectively able to recover 30-day penalties for each misclassified person. Call this office if you believe you are entitled to your 30-day penalty for late payment of your final paycheck.  The California Division of Labor Labor Standards Enforcement provides an overview of penalty law at: DLSE [Labor Commissioner].  For an overview wage law, see my article:  California Wage and Hour Laws