Human Resource Blog

Holding Last Paychecks after Termination in California

	Compensation
Employee Payroll Action Form W-4 Employee Withholding Allowance Cert. Employee Payroll Status/Change Form Direct Deposit Form Total Compensation Summary

	Termination
Employee Warning Notice Employee Final Warning Notice Employee Resignation Form Exit Interview Questionnaire Separation Checklist

Can a employer hold your last check for any reason in California?

California has one of the strictest laws in the land regarding

final paychecks.Under Labor Code 201, employees who are fired or laid off must be paid all wages at the time of termination. The wages must be paid at the place of discharge, under Labor Code 208. An employee who quits without giving prior notice must be paid all wages within 72 hours. If the employee gives 72 hours of notice or more, then the employee must be paid his or her wages at the time of quitting. An employee who quits without 72 hours notice may request that the final wages be mailed to an address supplied by the employee. If so, the date of mailing is considered the date of payment under Labor Code 202.

In California, “all wages” include any earned, unused vacation pay under Labor Code 227.3. Earned vacation must be paid to all terminated employees.

An employer who “willfully” fails to pay wages may be required to pay the worker wages for each day the wages were due, up to a maximum of 30 days.

Penalties can be avoided if the employer can show a “good faith” dispute between the employer and employee on the amount of wages due. However, even if there is a dispute, the employer must pay whatever wages are not in dispute, under the guidelines above. In addition, the employer cannot require the worker to sign a release to receive the undisputed wages.

In a few very specific circumstances within the motion picture industry, employers can take longer than 72 hours to pay the employee. If the paycheck includes commissions that are calculated at the end of the month, in some cases the employer can take longer to pay the commissions — but not the wages.  If the employee and employer have an employment contract in place, that may affect the timing of the final paycheck.