Under current law, an employer who pays less than the minimum wage is subject to a Labor Commissioner citation that includes a civil penalty, restitution and liquidated damages (Labor Code Section 1197.1).
AB 1723 authorizes the Labor Commissioner to also recover waiting time penalties for an employer’s willful failure to timely pay wages to a resigned or discharged employee. The law does not create new penalties, just a new way for the Labor Commissioner to enforce existing penalties.
It should be noted that the Labor Commissioner does not hesitate to award “waiting time penalties” for ANY failure to timely pay all wages due upon separation of employment, whether the failure to pay is intentional or inadvertent. Waiting time penalties accrue for every day that the employee is not paid their final wages up to a maximum of 30 calendar days.
Employers are cautioned to be aware of the time restrictions for timely payment of final wages:
Termination:
An employee must be paid for all final wages, including wages for the day of termination (such as reporting time pay) and any accrued but unused vacation at the time of termination. No exceptions; no waiting for the next payroll cycle.
Resignations:
Without 72 Hour Notice: An employer has a total of 72 consecutive hours from the time of notice of resignation to provide final wages to an employee.
With 72 Hour Notice: If notice of 72 hours or more is provided, the employee must be provided all final wages at the time the employee leaves.
There can be NO offset or deductions from final wages for equipment, property or other items not returned. There can be no holding the final check until the employee signs any separation paperwork.
There are essentially no arguments in defense of Waiting Time Penalties which can add up. For example, the employee earns $15.00 per hour; works full time so the daily wage rate is $15.00 x 8 = $120.00 daily wage rate x 30 days of waiting time penalties = $3,600.00 in potential waiting time penalties.