Dive Brief:
- To the California Supreme Court, retiring and quitting are pretty much the same thing when it comes to getting that final paycheck in a timely manner, according to an article at SHRM.
- The court recently ruled that employees who retire must promptly receive their final paychecks, just like an employee who resigns. SHRM reports the California Labor Code mandates that state and private sector employees who quit their jobs must generally receive their final wages within 72 hours. If given a 72-hour employee notice before the resignation date, the employer must pay final wages on the last day of work.
- Employers failing to promptly pay final wages may be subject to "daily waiting-time" penalties in an amount equal to the employee's daily pay rate for up to 30 calendar days, SHRM reports.
Dive Insight:
It's a complicated case, but here the state decided it didn't have to follow the law because the "prompt payment" didn't apply to retiring employees. The court reasoned that "the application of the prompt payment provisions do not turn on the nature of the employee's post-employment plans." Basically, the court's stance is that regardless of an employee's reason for leaving, that reason has no bearing on being paid promptly.
Employers operating in California, public or private, are subject to the law. As usual, CA tends to be markedly forward and specific with their employment law, and it's a safe bet for multi-state employers with a presence in CA to set compliance at the CA baseline.