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HR Alert - California High Court Clarifies Final Paycheck Rules The California Supreme Court has ruled unanimously on requiring payment of wages immediately upon “discharge”—and imposing waiting time penalties for delays— that the term “discharge” doesn’t just mean getting fired or laid off. It also includes when an employer releases a day laborer or other short-term employee when their job duration is up. The case involved Amanza Smith, who was hired by L’Oreal USA, Inc. to model for one day at a hair show, for a flat rate of $500. Smith completed the day’s work, but L’Oreal waited over two months to pay Smith. Smith sued L’Oreal, on behalf of herself and other models, charging that the company violated Labor Code Section 201, which requires an employer that “discharges” an employee to immediately pay the wages earned. She sought penalties under Labor Code Section 203, which imposes “waiting time penalties” of up to 30 days’ pay when an employer willfully fails to pay a “discharged” employee in a timely manner. Now the California Supreme Court has ruled, an employer “discharges” an employee not only when the employee is fired, “but also when it releases an employee upon the employee’s completion of the particular job assignment or time duration for which he or she was hired.” Note: The waiting time penalty for failure to pay final wages timely is one day’s pay for every day paid late, up to 30 days, plus interest and other fines imposed by the DLSE (Dept. of Labor Standards Enforcement). HR NETwork, Inc. With HR NETwork on your side, we increase the effectiveness of your employee resources, while minimizing your risk & exposure Human Resource Training Courses |
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