California Labor Law - Final Paychecks

The intent of this paper is to provide an overview and assessment of the “final pay” laws in the state of California. On a federal level, employers are not required by law to provide former employees with a final paycheck sooner than which they would have normally been paid for the last pay period worked. Some states, including California, have enacted laws which require employers to issue final paychecks on a more immediate basis. California Labor Codes 201, 202 and 227.3 speak to the regulations employers must follow to avoid penalty. While the California Department of Labor does not readily explain rationale for enacting these regulations, it would seem the laws exist in order to protect and benefit employees upon termination of employment by putting final pay due in the hands of the employee sooner than they would have normally obtained it.

Reviewing California final pay codes, Labor Code 201 states “If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.” (Insert source http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&group=00001-01000&file=200-244 ) In addition to earned wages, employers must also pay the value of accumulated and unused vacation pay during this time (Insert source, California Labor Code 227.3). One exception to the rule is for seasonal employees employed in the curing, canning, or drying of certain foods. Employees in this category are considered to have received immediate final pay if it is provided within 72 hours of termination. Another exception is made under code 201.7 for employees in the oil drilling industry. Employers are considered to have paid final pay timely if it is within 24 hours of discharge, due to the fac...

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...ay, consider relaxing their regulations to allow employers to provide final pay on an employee’s next normal pay date for the pay period worked through. It seems the rules provide little value to an employee, in exchange for nothing short of a headache for employers who must deal with countless other regulations on a daily basis. While I believe it is important for employee rights to be protected to ensure employers do not act unfairly, it is also important for employers to be able to operate efficiently. While I do not personally have payroll experience, producing paychecks outside of a normal pay date sounds like a requirement which puts an unnecessary burden on payroll employees. In closing, my suggestion is that California considers changing their final pay laws to align with most other states who believe final pay is due on a normally scheduled pay date.