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Employee Rights Advocates

What Is The Penalty For Not Paying Employees On Time In California?

Penalty For Not Paying Employees On Time In California

Employees in California have the right to be paid on time and in full for their work. When employers fail to meet this obligation, they face significant legal consequences. In this article, you learn the penalties California employers may face if they don’t pay employees on time.  

When Should California Employees Be Paid?

California has strict laws about when employees must receive payment. The general rule is:

  • Non-exempt employees: Must be paid at least twice per calendar month on designated paydays. Compensation earned between the 1st and 15th of the month must be paid by the 26th of the same month. Wages earned between the 16th and the end of the month must be paid by the 10th of the following month.
  • Exempt employees: Paid at least once per calendar month on or before the 26th of the month.

When Must My Employer Give Me My Final Paycheck?

California has different rules for when an employee’s final paycheck must be issued depending on whether the employee quits or is terminated:

Employee Quits

If an employee quits without providing at least 72 hours of notice, their final paycheck is due within 72 hours. If the employee provides at least 72 hours of notice, wages are due on their last day of work.

Employee is Terminated

The employer must issue the employee’s final paycheck immediately upon termination.

Late Paycheck Damages

When a California employer fails to pay an employee their wages on time, the employee may be entitled to several types of damages. These include:

  • Waiting Time Penalties:  California’s Labor Code Section 203 mandates that if an employer willfully fails to pay any wages due, the employee may continue to collect wages as a penalty from the due date. The penalty is calculated as the employee’s average daily earnings for up to 30 working days.
  • Liquidated Damages: Under specific circumstances involving bad faith or willful misconduct, courts may also award liquidated damages in an amount equal to the unpaid wages.
  • Interest: Employees may also be entitled to collect interest on unpaid wages from the due date until the full payment is made.

What Happens If My Employer Is Late with My Paycheck?

If your employer is late with your paycheck, you have options:

  • Start by talking to your supervisor, payroll department, or HR representative. An honest mistake could be the cause of the delay.
  • If your employer refuses or is unable to pay, file a wage claim with the California Division of Labor Standards Enforcement (DLSE). The DLSE can help you recover unpaid wages and penalties.
  • If you have a complicated case or are facing a significant amount of unpaid wages, consider consulting with a lawyer for California employee laws.

Employer Financial Penalties for Late Paychecks

California employers who don’t pay employees on time face more than just disgruntled employees. They may also be subject to financial penalties and legal action:

  • Administrative Penalties: The DLSE can impose administrative penalties on employers who violate California’s wage and hour laws. These penalties can be substantial in cases of repeated or willful violations.
  • Civil Lawsuits: Employees can file civil lawsuits against their employers for unpaid wages, penalties, and other damages, including attorney fees.
  • Criminal Charges:  In some cases of willful non-payment, employers may even face criminal charges.

Waiting Time Penalties Paid to Employees For Late Final Wages

Waiting time penalties, outlined in California Labor Code section 203, are significant consequences faced by employers who don’t pay final wages timely.  Here’s what you need to know:

An employee’s daily rate of pay continues as a penalty from the due date of the final paycheck until the wages are paid, up to a maximum of 30 working days.

Employee Damages for Late or Incomplete Paychecks

Beyond waiting time penalties, employees may be entitled to other forms of compensation if their paychecks are late or incomplete.

Naturally, the employee is entitled to the full amount of wages they earned, regardless of when payment occurs.

In cases of willful misconduct or bad faith by the employer, an employee may be entitled to liquidated damages. These damages are often an amount equal to the unpaid wages.

California has robust laws in place to protect employees’ right to timely and complete payment. If your employer withholds or delays your paycheck, you don’t have to accept it. Contact the California Division of Labor Standards Enforcement (DLSE) or consult with a ‘lawyer for California employee laws’ for guidance.

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