The component is not available at this moment. Please contact the site administrator.
If an employee is terminated or quits and you willfully fail to pay the employee in a timely fashion, you may face an expensive penalty. You may be required to continue the exiting employee’s wages on a day-to-day basis, up to a maximum of 30 days, until the final paycheck is ready.1 This rule covers both exempt and nonexempt employees.2
The penalty is measured at the employee’s daily rate of pay, and is calculated by multiplying the daily wage by the number of days that the employee waits for a final paycheck — up to a maximum of 30 days. The 30-day period is calendar days, and includes weekends and holidays and any other days that the employee would not normally work.
The waiting time penalty is not considered wages; no deductions are taken from the penalty payment.
A willful failure to pay need not include a showing of bad faith or evil intent. However, the waiting time penalty is excused if there is a good-faith dispute that no additional wages are due.3
Waiting time penalties can apply when the final paycheck is not for the full amount of wages due. A California court of appeal clarified that failure to pay all wages owed can be considered “willful,” triggering waiting time penalties — even when the paycheck shortage is due to the employer’s lack of awareness of local wage requirements.4
In the event of a dispute over wages, you must pay, without condition, all wages you admit are due. You must pay any additional wages determined due by the Labor Commissioner within 10 days after receiving notice from the Labor Commissioner that wages are due. Failure to do so may subject you to a penalty of triple the amount due to the employee.5
In addition, if you violate wage payment provisions when paying employees, you commit a misdemeanor.6 Either the district attorney or the Division of Labor Standards Enforcement (DLSE) can sue to recover statutory penalties.7
In any court action brought for the nonpayment of wages, fringe benefits or pension fund contributions, the court must award reasonable attorneys’ fees to the prevailing party if requested by the prevailing party. In DLSE v. Lee, a California court of appeal held that even the Labor Commissioner can be ordered to pay costs to the prevailing party in litigation.8
1. Lab. Code sec. 203
2. Mamika v. Barca, 68 Cal. App. 4th 487 (1998)
3. 8 CCR sec. 13520
4. Diaz v. Grill Concepts Services, Inc., 23 Cal.App.5th 859 (2018)
5. Lab. Code sec. 206
6. Lab. Code sec. 217
7. Lab. Code secs. 217, 218
8. DLSE v. Lee, 73 Cal. App. 4th 763 (1999)