Everything You Need to Know About California Final Pay Laws

October 27, 2022

Ending an employment relationship is never easy. California’s Labor Code can make ending the employment even more difficult with the very specific rules that must be followed regarding when final pay must be paid and what must be included.

These laws manage the time that elapses between an employee’s initial hire and final termination. They outline precisely how much notice an employee must receive before their employment ends, as well as how much money they must be paid in total after terminating.

To help you better understand California final pay laws, this article explains what they are, what they require from employers, what exceptions exist, and more. Keep reading to learn more!

What is a Final Paycheck?

A final paycheck is a payment given to workers upon their termination that compensates them for their earned wages and any accrued, but unused vacation time. The California Labor Code governs the timing and amount of final pay.

Timing of Final Pay

Involuntary Termination/Layoffs

An employee who is terminated or laid off must be paid all of their earned wages, including accrued vacation, at the time of termination.


An employee who gives notice of at least 72 hours notice of their intention to quit and who quits on the day given in the notice must be paid all of their earned and unpaid wages, including accrued vacation, at the time of quitting.

An employee who quits without giving notice of at least 72 hours must be paid all of their wages, including accrued vacation, within 72 hours of quitting.

Failure to Comply with Final Pay Deadline

a final notice document

If an employer fails to pay an employee their final pay in accordance with California law, then the employer can be subject to waiting time penalties. An employer that willfully fails to pay any wages due to a terminated employee (regardless of the reason for separation) in specified time period may be assessed a waiting time penalty, which is the employee's daily rate of pay for each day the wages remain unpaid, up to a maximum of 30 calendar days The employee can file a complaint with the California Labor Commissioner or a civil action to recover these unpaid wages.

Handling Final Pay for Commissioned Employees

Commissions are forms of wages in California. However, when an employee's earned commissions cannot be calculated on the final day of employment, an employer must pay the earned commissions when they can be reasonably calculated.

In the event the commissions have been "earned" on or before the date of termination, the employer must pay the commissions on the date of the termination or within 72 hours of the termination of the employment relationship in the case of the employee who does not provide advanced notice.

If the commission has not yet been earned at the time of termination and is awaiting the completion of a condition precedent - such as the customer paying the invoice - the commission must be paid to the employee immediately upon completion of the condition precedent. This payment can be made after the final day of employment without penalty.

If an employee is discharged before completing all the terms necessary to earn commission, the employee may be entitled to recover at least a pro-rata share of the commission amount depending the work performed.

California Employer’s Final Pay Duties

California employers must comply with a number of legal duties related to final pay. These duties include:

  • Providing employees with a written itemized wage statement. An employer must provide each employee with a written itemized wage statement at the end of each work period. The wage statement should include information like the total amount of pay and any deductions made.
  • Following any specific contractual provisions related to final pay. If an employee has a written contract, the employer must follow its terms when paying the employee’s final wages.

How to Ensure You Get Your Final Pay on Time‍

Don’t wait until the last minute

Unfortunately, many employees wait until the last minute to hand in their resignation, which can lead to a lot of unnecessary stress and worry. Make sure to give your employer enough time to process your paperwork and get your final paycheck to you on time.

If you’re on a contract, check your contract to find out how long the process of terminating your contract will take. The same goes for benefits. Find out whether your company has a set amount of time to process your insurance claims or whether they need to wait for you to go through COBRA.

Get Your Final Pay Questions Answered with Freeburg & Granieri

Getting your final pay questions answered is important for many reasons. You want to know if you are getting what you are owed, and you want to avoid any unpleasant surprises. It may be tempting to skip this step, but it's important not to. If you have any outstanding concerns, it's best to address them before you leave the job.

An attorney can help you with regards to these issues. Find an attorney who treats your legal issue with the care it deserves. You can get your final pay questions answered in a number of ways with Freeburg and Granieri. Book a free consultation today!

Bottom Line

Employers must follow a number of California final pay laws when ending the employment of workers.

To comply with these laws, employers must pay all wages on the final day of employment or within 72 hours in the case of an employee who quits without notice.


Do California employers have to provide a written notice before terminating an employee?

No. Employment in California is “at will” and employers can terminate employees for any reason (as long as it is not for an illegal reason) with or without notice. While providing written notice to employees setting forth the last date of employment and the date upon which benefits end is a good practice, it is not required.

What are California’s rules for severance pay?

Employers can choose to provide severance pay to employees, but they don’t have to do so.


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