California Wait Time Penalty Law
What is The California Wait Time Penalty Law?
The California Wait Time Penalty Law is outlined in the California Labor Code, specifically under Section 203. This law exists to ensure that employees receive their final wages promptly upon termination or resignation, incentivizing employers to comply with wage payment obligations.
There are specific time periods in which an employer must surrender your last paycheck, and they are:
- Termination or Layoff: If an employee is discharged or laid off, they must receive their final wages immediately, meaning on the day of termination.
- Resignation With Notice: If an employee resigns with 72 hours’ notice, they are entitled to their final paycheck on their last day of work.
- Resignation Without Notice: If an employee resigns without giving at least 72 hours notice, the employer has 72 hours after the last day of work to pay the final wages.
What is The Penalty For Non-Compliance?
If an employer willfully fails to pay the final wages within these stipulated times, they must pay a penalty equal to the employee’s daily rate of pay for each day the wages remain unpaid, up to a maximum of 30 days. This penalty accrues every calendar day, including weekends and holidays, not just days the employee would have worked.
What Wages Are Covered?
Wages include:
- regular pay
- overtime (if regularly scheduled)
- commissions
- unused vacation time,
- other forms of compensation like employer contributions to retirement plans
Expenses, however, are not considered wages under this law.
Exceptions to The Law
There’s a “good faith dispute” exception where if there is a legitimate disagreement over the amount of wages owed, the penalty may not apply.
This must be based on a reasonable belief that no wages are due or that a different amount is owed.
Certain employees under collective bargaining agreements or in specific industries like agriculture, movies, or oil might have different timelines for final pay.
Enforcement Mechanisms
Employees can file a claim with the California Division of Labor Standards Enforcement (DLSE) or sue their employer to recover both the wages owed and the waiting time penalties. However, legal consultation is often recommended due to the complexity of these cases.
If you have any questions or if you have experienced a wait time violation with your paycheck, call us at 1-888-924-3435 or fill out the form.
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