Waiting-Time Penalties for Late Final Wages in California: Employer Guide
Introduction
California law requires employers to pay all final wages promptly when an employee’s employment ends—either immediately at discharge or within 72 hours after a resignation without notice. Failure to comply can trigger “waiting-time” penalties, exposing employers to up to 30 days’ pay for each affected worker. Cal. Lab. Code §§ 201, 202, 203.
Legal Standard: Essential Elements
To establish a waiting-time penalty claim, an employee must show:
Employment ended (termination, resignation, or retirement).
The employer willfully failed to pay all wages owed by the required deadline.
The daily wage rate and the actual date wages were paid (or if they remain unpaid).
“Willful” means the employer intentionally failed or refused to pay—not that the employer acted with malice or fraudulent intent. Gonzalez v. Downtown LA Motors, LP, 215 Cal. App. 4th 36, 54 (Cal. Ct. App. 2013).
Penalty Calculation
The penalty is calculated as one full day’s wages for each day final wages are late, capped at 30 days. “Wages” include all compensation: hourly, salary, commissions, bonuses, and accrued vacation. Mamika v. Barca, 68 Cal. App. 4th 487, 493 (Cal. Ct. App. 1998); Naranjo v. Spectrum Sec. Servs., Inc., 13 Cal. 5th 93, 117 (Cal. 2022).
Example:
Suppose an employee is terminated with a daily wage rate of $200. If final wages are paid 5 days late, the penalty is 5 × $200 = $1,000.
If payment is 31 days late, it is capped at 30 × $200 = $6,000.
So, every calendar day the payment is late increases exposure; prompt payment is required.
Practical Guidance for California Employers
Ensure all final wages—including regular pay, bonuses, commissions, and accrued vacation—are paid as required by law.
Document when final wages are paid, the amounts, and how you calculated any vacation payout.
Pay undisputed amounts immediately, even if there is a dispute over a portion of the final wages.
Penalties may only be avoided for a legitimate “good faith dispute”—a reasonable, fact-based reason pay was withheld.
Bottom Line
California’s waiting-time penalty laws create a strong incentive for employers to pay all final wages promptly and completely. Late payment, regardless of the reason (including payroll or bank delays), exposes employers to substantial liability.
Citations
Cal. Lab. Code §§ 201, 202, 203, 200; Mamika v. Barca, 68 Cal. App. 4th 487 (Cal. Ct. App. 1998); Gonzalez v. Downtown LA Motors, LP, 215 Cal. App. 4th 36 (Cal. Ct. App. 2013); Naranjo v. Spectrum Sec. Servs., Inc., 13 Cal. 5th 93 (Cal. 2022); Pineda v. Bank of Am., N.A., 50 Cal. 4th 1389 (Cal. 2010); Kao v. Holiday, 12 Cal. App. 5th 947 (Cal. Ct. App. 2017).
