Employers must follow the guidelines on providing the final paycheck in a timely manner. Failure to do so could result in severe consequences including waiting time penalties.
In California, employees must be paid immediately if they are terminated or laid off. It is illegal to withhold a final paycheck on the condition that an employee must return company property still owes the company money, or needs to turn in an expense report.
Employees who give at least 72 hours notice must be paid on the last day. It is advisable to mail the check only if the employee requests this in writing. Possible consequences of mailing the final paycheck without written request could result in mailing to a different address, or sending out the paycheck before the employee comes to pick it up. This could ad to the waiting penalties time and the employer would have to pay more. In addition, terminated employees must be paid at the place of termination. If the employee works remotely, the employer must be prepared to give the final paycheck to the employee at their location upon termination.
On the other hand, employees who give less than 72 hours notice must be paid within 72 hours of their giving notice. Within 72 hours, the employer must pay all wages, and accrued vacation. It is important to accurately calculate the vacation time because an error of half an hour could result in waiting time penalties totaling to thousands of dollars. The mailing date is considered the payment date as well. Final commission payments do not need to be included as the Labor Commissioner recognizes that it is impossible to calculate commissions that are not yet received.