What Is the Penalty for Not Paying Employees on Time in California?
Imagine: You arrive for your shift at the LA restaurant where you work on payday, looking forward to taking home a check at the end of the night.
But when you go to your manager to pick up your paycheck, your manager doesn’t have it. He says the restaurant is having a temporary cash flow problem but promises that you’ll be paid before the end of the month.
You leave feeling frustrated and helpless. Can your boss really make you take a rain check on your wages?
In this blog post, we’ll walk through what California law says about when employees should get paid, outline the specific rules for employees receiving final paychecks, and explain your legal options if your employer is withholding or delaying your paycheck.
If your employer failed to pay you on time or for overtime hours or failed to give you your final paycheck, the employment attorneys at Ottinger Employment Lawyers can help.
We’re here to defend workers’ rights and have protected workers’ interests for twenty years.
When Should California Employees Be Paid?
State law requires California employers to issue paychecks at least twice a month, on a regular schedule that employees are informed about in advance.
According to the California Labor Code Section 204, employees are legally entitled to pay within a specific window of time after the work they’ve performed:
- Work performed between the first (1) and fifteenth (15) days of the month should appear on your paycheck between the sixteenth (16) and twenty-sixth (26) day of that same month.
- Work performed between the sixteenth (16) and the last day of the month should appear on your paycheck between the first (1) and tenth (10) day of the next month.
For overtime pay, things are a little different. The law gives employers a little longer to pay overtime wages: eligible employees may have to wait for two regular payroll periods to get paid for overtime hours.
Legally, though, employees should see any overtime pay appear itemized on a paycheck no later than the payday for the next regular payroll period.
Note: If one of your regular paydays falls on a holiday, your employer gets until the next business day to issue your check.
There are some exceptions to California’s standard payday rules. The following types of employees may be paid differently from the twice monthly schedule:
- Executive, administrative, and professional employees who are exempt from certain labor laws may be paid as infrequently as once a month. But if they are, they must have that check in hand no later than the twenty-sixth (26) day of the month that they earned it. The paycheck should also include the employee’s salary for the entire month — including the unearned portion for the rest of the month they haven’t worked yet.
- Employees who have collective bargaining agreements may also have pay schedules that are different from what’s described above. In these cases, payday is set by the schedule that’s outlined in an individual’s employment contract.
Employers are allowed to make changes to the standard pay schedule for legitimate business reasons.
For instance, you may start out being paid on the 10th and 25th of the month, and then your employer might decide to switch to issuing paychecks every two weeks.
This is legal, even if it results in a temporary delay in one of your paychecks while the change is made.
As long as your employer informs you about the change well in advance, and they don’t continue to change the pay schedule around on a whim, they’re within their rights.
When Must My Employer Give Me My Final Paycheck?
In California, how soon you get your final paycheck depends on how you’re leaving your job.
If you’ve been fired, California law says that your employer is required to pay you all remaining unpaid wages at the time of your termination. This is the case regardless of the reason or circumstances for which you’re being let go.
By law, your employer must hand over this final payment to you “at the place of discharge,” i.e. where you’re being fired. But you do have the right to request your final paycheck to be sent another way, for instance, in the mail or through direct deposit.
If you leave your job voluntarily and don’t give your boss notice ahead of time, they have 72 hours to pay you. But, if you do give your employer 72 hours notice before you quit, then they must be ready with your final paycheck on your last day of work.
Your final paycheck should include all unpaid wages, as well as any unused vacation days or accumulated paid time off.
There are also some exceptions to these basic final paycheck rules for workers in certain industries. Employers in California aren’t required to issue final paychecks immediately for:
- Employees in the motion picture industry
- Employees in the oil drilling industry
- Workers employed through temp agencies
- Theatrical or concert event venue workers
- Certain seasonal food production workers laid off in groups
- Workers under collective bargaining agreements with different final paycheck rules
In any of these cases, it’s illegal for your employer to withhold your final paycheck on the condition that you sign a contract agreeing to waive certain rights, such as the right to sue them in the future.
Agreements like this are considered unenforceable in California, and employers who try to use them can face misdemeanor charges in state court.
Late Paycheck Damages
Lost wages, known as “back pay,” are the amounts you earned for working that should have been paid but weren’t. If your employer failed to pay you for all of your work hours, a court could award you back pay.
Back pay totals your unpaid hours times your hourly wage. For example, if your hourly wage is $15 an hour and you worked 30 hours “off the clock” but were not paid for it, you’ll receive $450 in back pay.
What Happens If My Employer Is Late With My Paycheck?
Employers have a legal obligation to pay their employees the wages they’re due in a timely manner. If your boss isn’t paying you on time, they’re violating state labor law.
Here are some of the legal consequences that employers can face for delaying or withholding paychecks.
Employer Financial Penalties for Late Paychecks
According to California Labor Code 210, employers who fail to pay workers on time are subject to financial penalties.
Penalties are extra fines that California imposes on your employer for violating your rights as an employee. They aim to deter your employer from illegally withholding wages in the future.
For initial violations, the penalty is $100 per employee who receives a late paycheck. For additional violations, employers incur a $200 penalty per employee, along with 25% of the unpaid wages.
This higher penalty can also apply to an employer’s first violation, if the withholding of payment was intentional.
Waiting Time Penalties Paid to Employees for Late Final Wages
Employers who don’t pay a departing employee (whether they are terminated or have quit) in the required time period can also be slapped with a waiting time penalty.
For every day past the legal deadline you don’t receive your final paycheck, an employer must pay you the amount of your previous daily wage rate until you receive your remaining unpaid wages (or for a maximum of 30 days).
Employee Damages for Late or Incomplete Paychecks
In California, employers have up to 30 days to correct payroll errors. If they fail to rectify underpayment or issue late paychecks in that time, employees are entitled to a full day’s wages at their regular rate for each day the mistake persists.
Employees facing late or irregular paychecks can also file a lawsuit against their employer, with the potential to recover damages for missing financial compensation.
In addition to fines paid to the state, employers who engage in wage theft or habitual late payments can also be ordered to pay damages to make up for an employee’s missing wages.
Under California’s labor laws, these damages can include compensation for back pay, interest for delayed paychecks, and payment of attorney fees and court costs.
If your employer’s violation affects many employees, you may consider initiating a claim under California’s Private Attorney General Act (PAGA). This law allows California employees to ban together and act on behalf of themselves, other employees, and the State of California to enforce the Labor Code.
Employees who take the initiative to pursue this type of civil suit have the right to recover a portion of the penalties collected by the State of California.
Ottinger Employment Lawyers Can Defend Your Rights
If you’re concerned about an employer’s late paychecks, it’s wise to consult with an employment lawyer. An attorney can assess your case and determine what type of action is most appropriate for your circumstances.
If you decide to go to court, an experienced lawyer can help you prepare your case and ensure that you’re getting the maximum amount of recovery under California’s labor laws.
Since 1999, Ottinger Employment Lawyers has helped thousands of employees across California. We can assess your case, explain your potential damages, and help you decide the best course of action to achieve your maximum compensation.