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Final Paycheck in California

For public agencies, under the FLSA if an employee resigns or is discharged, can the employee be compensated for all final wages on the following payroll date (10 days after) or do all final wages need to be paid on his/her resignation/discharge date?

The federal Fair Labor Standards Act (FLSA) doesn’t require employers to provide former employees with their paychecks immediately. The final paycheck is due on the next regularly scheduled payday.

However, some states including California have specified time frames for final paychecks.

According to California’s Department of Industrial Relations:

An employee who is discharged must be paid all due wages, including accrued vacation, immediately at the time of termination.

An employee without a written employment contract for a definite period of time who gives at least 72 hours prior notice of his or her intention to quit, and quits on the day given in the notice, must be paid all of his or her wages, including accrued vacation, at the time of quitting.

An employee without a written employment contract for a definite period of time who quits without giving 72 hours prior notice must be paid all of his or her wages, including accrued vacation, within 72 hours of quitting.

There are special cases including:

A group of employees who are laid off by reason of the termination of seasonal employment in the curing, canning, or drying of any variety of perishable fruit, fish or vegetables, must be paid within 72 hours after the layoff.

An employee engaged in the production of motion pictures who is laid off and whose unusual or uncertain terms of employment require special computation in order to ascertain the amount due, must be paid by the next regular payday.

An employee engaged in the business of oil drilling who is laid off must be paid within 24 hours after discharge, excluding Saturdays, Sundays, and holidays.

If employees are employed at a venue that hosts live theatrical or concert events and are enrolled in and routinely dispatched to employment through a hiring hall or other system of regular short-term employment established in accordance with a bona fide collective bargaining agreement, these employees and their employers may establish terms in their collective bargaining agreement the time limits for payment of wages to an employee who is discharged or laid off.

Also, the place of the final wage payment for employees who are terminated (or laid off) is the place of termination. Employees who quit without giving a 72 hours prior notice and who do not request that their final wages be mailed to them at a designated address, the place of final wage payment is at the office of the employer within the county in which the work was performed.

Direct deposits of wages to an employee’s bank, saving and loan, or credit union account that were previously authorized by the employee are immediately terminated when an employee quits or is discharged, and the payment of wages upon termination of employment in the manner described above shall apply unless the employee has voluntarily authorized that deposit.

An employer who willfully fails to pay any wages due a terminated employee (discharge or quit) in the prescribed time frame may be assessed a waiting time penalty. So, even if there is a dispute, the employer must pay, without requiring a release, whatever wages are due and not in dispute.

Please note: The aforementioned laws do not apply to employees directly employed by any county, incorporated city, or town or other municipal corporation. If there is any doubt regarding the applicability of these laws to your company it’s best to contact either your local DOL or an employment attorney.


May 26th, 2016, 2:18 PM |  Posted in: Compensation, Termination |
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Transitioning from Full-time to Part-time Re PTO

A full time salary employee moved to hourly and now works part time. Should she be paid PTO at her salary rate because that’s when it was earned?

Paid time off policies are generally at the discretion of the employer. Some states have adopted regulations regarding vacation time. Of such states, some consider accrued vacation time to be considered earned wages; thus, affecting payout rates. So, it’s important to be aware of applicable state law.

Absent state law or collective bargaining agreement, employers should establish a policy or practice for PTO benefits.

It’s fairly common and simply fair to employees to payout accrued PTO in the dollar amount it was earned. So, in this case, the employee should be paid her PTO at her full time rate. Similarly, any PTO earned as a part time employee (assuming part timers are eligible for PTO) should be a earned at a prorated amount.

May 26th, 2016, 1:40 PM |  Posted in: Benefits |
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Termination vs. Layoff

We have an employee that is mediocre at best. He has been with us for four years. We have kept him on staff as we have not had any replacement until recently. We have hired 7 new people in the last year and they have all surpassed his abilities and then some. He was hurt on the job about a year ago and has been back to work with limited restrictions for many months. His injuries are not the reason we want to let him go. His potential and current talents are sub par compared to the rest of our workforce. I would like to terminate him vs lay him off and am wondering the best way to do this.

Deciding whether to terminate or layoff an employee requires consideration of factors that affect both employer and employee.

Termination is used to end the employment relationship when the employee has committed wrongdoings or the employer determines the employee is not a good fit for the company. Usually, termination is the final step in the progressive discipline process. Meaning, the employee has been made aware of their performance issues, time has been given to resolve such issues, and, ultimately, the employer decides to severe the employment relationship.

Terminating the employee for poor performance is fine. But, make sure there is clear documentation proving the employee’s subpar performance. There should be sufficient evidence proving the termination is based on poor performance and not the employee’s injury. Furthermore, it’s important to have a clear reason why you’re terminating the employee now even though he’s been a poor performer for some time. Make sure you have a clear case that the employee would’ve been terminated anyway regardless of his medical condition. Such evidence will prove beneficial if the employee files a wrongful termination claim or an unemployment claim.

A terminated employee usually can’t collect unemployment benefits. However, some states will allow a terminated employee to collect benefits as long as the termination wasn’t due to gross negligence (like stealing).

Terminated employees tend to resent their employer more partly due to fear of not being able to find another job because they were fired. Their scorn may be more so if they were never given constructive feedback, an opportunity to improve their performance, or even a mention that they weren’t performing up to par.

Also, termination would apply if you would never rehire the employee.

A layoff is different.

A layoff is a temporary or permanent end to the employment relationship due to downsizing, company financial problems, or no work being available. A layoff is not caused by any fault or wrongdoing by the employee.

When considering a layoff, establishing clear selection criteria for which employees are laid off is essential in reducing the risk of a wrongful termination claim and in defending yourself against such a claim.

Quantifiable or objective criteria are safest. For example, layoff criteria may include seniority, employee classification i.e. full time/part time/on call, or clear productivity numbers. Subjective criteria like quality of work or skills tend to be riskier.

Basically, you must be clearly able to show why the employee in question, especially since he has longevity with the company, was laid off over any other employee.

An employee who is laid off is eligible for unemployment benefits.

Though laid off employees still resent their employer, being eligible for unemployment and/or a severance package as well as just being able to tell another employer that they were laid off instead of terminated can ease their dislike for you.

Also, a layoff would apply if you would consider rehiring the employee at a later time.

Based on the information provided it sounds like the employee should be terminated. Still, consider the facts of the situation.

As previously stated make sure you have the appropriate documentation to support your reasoning for the separation. Once your documentation/evidence is in order, try to make the separation process as smooth as possible for the employee.

Decide on a reason for the separation and stick to it. Meet with the employee. Be concise but clear with the employee regarding your decision. Otherwise, if you’re vague in your explanation, it leaves the employee open to jump to his own conclusions about the reason.

Lastly, employees who are terminated or laid off can be offered a severance package. A severance package can simply be 2-4 weeks of additional pay and benefits. Detailed severance packages such as those that include a release should be reviewed by an employment attorney. A severance package can go a long way in softening the blow of a layoff/termination.


May 26th, 2016, 1:21 PM |  Posted in: Termination |
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Vacation Payout

Our company does not accrue vacation time. An employee recently quit. At the first of the year she was given 3 weeks vacation and 1 week sick time. Do we have to pay all of the unused vacation time or figure out what it would be if accrued?

It’s more common and better practice to only pay the employee the amount of time she would’ve accrued by her last day.

Here’s the calculation:

Let’s assume the employee works 5 days a week, 8 hours per day. The employee is entitled to 3 weeks (15 days) of vacation time for the year.

Number of vacation days offered per year (15) x hours worked per day (8) = 120 hours of vacation time per year. Divide total number of vacation hours (120) by the number of weeks in a year (52) = 2.308 hours of vacation time earned per week.

Let’s say the employee’s last day will be May 27th. Thus, she’s entitled to 21 weeks worth of her vacation time or 48.47 hours (21 weeks worth of vacation time x 2.308 hours of vacation time earned per week = 48.47 vacation hours earned).

Any vacation time the employee has used would be deducted from the total amount of vacation time earned. The remaining balance would be paid to the employee.

It’s important to mention that although federal law is silent on the matter of vacation payouts, some states have regulations requiring accrued vacation time to be paid out upon separation of employment or at least for such time to be paid out in accordance with company policy. Thus, it’s important to know any applicable laws in your state.

May 23rd, 2016, 9:04 PM |  Posted in: Benefits |
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Jury Duty Pay

If an employee had taken a day off, but was then summoned for jury duty on that day, does the employer have to pay for jury duty?

The federal Fair Labor Standards Act (FLSA) establishes compensation requirements for employees in the private sector and in Federal, State, and local governments. The FLSA doesn’t mandate compensation for time not worked such as time spent serving on a jury. A few states have adopted legislation on the matter. However, absent state law, jury duty pay is generally a matter of agreement between an employer and employee.

Whether or not an employer must pay for jury duty if the employee had already taken the day off would be a matter of company policy, absent applicable state law.

Many companies understand the importance of employees fulfilling their civic duties by serving on a jury. It’s fairly common to provide employees the difference between their jury duty paid by the court and their regular day’s pay for 3-5 days. Or, many employers just allow employees to use their paid time off accruals. Again, absent state law, this benefit is at the discretion of the employer.

Keep in mind, even though federal law doesn’t require employers to compensate employees for jury duty, it does protect employees from being threatened or coerced by their employers for serving on a jury.

May 23rd, 2016, 8:49 PM |  Posted in: Benefits, Compensation |
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