When an employee is fired, all of his earned and unpaid wages must be paid immediately at the time of termination. When an employee quits without notice, his wages are due within 72 hours of quitting. However, if he gives more than 72 hours notice of his departure, his wages are due on the last day of employment.
Failure to pay the full amount of wages due when the employee stops working can give rise to “waiting time” penalties under Labor Code section 203, which provides:
This means that the regular daily wage of the former employee shall continue as a waiting-time penalty for up to 30 days when the employer fails to pay all wages due at termination or when the employee quits. For a minimum wage employee who works 8 hour days, the waiting time penalty would be $96 per day ($12/ hr x 8), and the maximum penalty for this employee would be $2,880 ($96/day x 30 days). As the employee’s wage increases so too does the amount of the penalty.
Even a small amount of unpaid wages can trigger the penalty. This includes unpaid vacation wages, overtime pay, and premium wages for missed breaks. Often an employee will only have a few hundred dollars in unpaid wages, but when waiting time penalties are added, the claim can exceed $5,000.
In order to recover waiting time penalties, the employee must prove the employer’s failure to pay the wages was “willful.” This means the employer intentionally failed to pay wages that were due. The term “willfully” does not require a showing that the employer knew of its obligation. An employer may act willfully even if it did not know it was required to pay some category of wages. However, a good faith dispute that the wages are due will preclude a finding of willfulness.
If you are facing a wage claim with waiting time penalties, you should have an experienced lawyer protecting your business. I have successfully defended these claims and I can help you avoid paying more than the law requires.