Final Day and Final Pay: Ensuring Compliant Payment of Final Wages upon Separation of Employment

California’s rules regarding final payment of wages are famously stringent, with different requirements depending upon whether the separation is voluntary or not and, if voluntary, when notice is provided in relation to the last day worked. Failure to comply with applicable deadlines, to make full and accurate payment in the correct manner, and to include all wages due, can result in waiting time penalties that greatly exceed the amount of unpaid wages. Understanding these rules and establishing payroll systems that ensure timely and accurate payment of wages will not only make the employment separation process run more smoothly, but will also mitigate the risk of employee claims for penalties.