Certain provisions of the California Labor Code regarding the issuance of an employee's final paycheck now apply to the University of California. Click the questions below to find answers regarding payment of final wages:

Who the changes will impact

• Does this change imply that only separating employees who request a final check should be paid within 72 hours, or does the change apply to all separating employees?
• Does the change apply to employees who terminate with the intent that they will be rehired within a few days?
• Does the law apply to employees who have appointment and distribution end dates? If not, does the law apply to employees who have appointment and distribution end dates but who resign earlier?

Wages and deductions

• Does the code apply to terminal vacation pay? Does this apply to commission payments?
• Payroll offices have traditionally paid final wages on the employee's next regularly scheduled payday. This benefits the employee, since he or she would receive another month of health, dental, and vision contributions and coverage. Are these benefit contributions to be made manually, or not at all? What additional deductions is the University obligated to take since the payment will not be issued on the employee's primary pay cycle? Should deductions be taken for the 403(b), DepCare, and AD&D plans, etc?
• When a separating employee does not provide his or her timesheet, or in some other way does not respond to requests for information needed to produce and deliver his or her final paycheck, is the University still obligated to comply with the payment provisions?

Posting pay dates

• Where should paydays be posted? Should they be posted centrally, such as in the payroll or HR office, or in every department or unit?

Disposition of final payment

• Is the 72-hour rule measured in actual hours or working hours? For example, an employee gives no advance notice and announces his immediate resignation at 4:45 p.m. on the Friday of a holiday weekend. Must his check be made available to him by Monday at 4:45 p.m.? Must this occur even if there is no time on Friday to produce the check and Monday is a University holiday?
• Should departments use certified or registered mail, or at least acquire some proof of mailing, to document that final checks were mailed within the legal timeframes?
• Is Surepay an approved method of payment under the code or does a check have to be issued and handed to the individual? Can an employee waive the check process if he or she prefers receiving final payment through direct deposit?

Potential payments

• What are the potential misdemeanor penalties?
• What are the potential financial penalties?

Who the changes will impact

Q: Does this change imply that only separating employees who request a final check should be paid within 72 hours, or does the change apply to all separating employees?

A: The California Labor Code addresses three categories of "separating" employees and the prescribed payment rules:

• Discharged employee: The University must pay the employee immediately for all wages, including accrued vacation leave and compensatory time.
• Voluntary resignation with no notice: The University must pay the employee all wages, including accrued vacation leave and compensatory time, no later than 72 hours from the date of separation.
• Voluntary resignation with a 72-hour notice: If an employee gives at least 72 hours' notice to the University, the University must pay the employee his or her wages, including accrued vacation leave and compensatory time, at the time of separation.

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Q: Does the change apply to employees who terminate with the intent that they will be rehired within a few days?

A: Yes, the code applies to employees who voluntarily quit career positions to accept per diem positions. (Career employees who are accepting per diem appointments are required to be separated and rehired with at least a one-day break in service.)

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Q: Does the law apply to employees who have appointment and distribution end dates? If not, does the law apply to employees who have appointment and distribution end dates but who resign earlier?

A: Yes, the code applies to employees with appointment end dates. We will refer this question to General Counsel for further clarification.

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Wages and deductions

Q: Does the code apply to terminal vacation pay? Does this apply to commission payments?

A: Yes, the code applies to all wage amounts for labor performed.

Q: Payroll offices have traditionally paid final wages on the employee's next regularly scheduled payday. This benefits the employee, since he or she would receive another month of health, dental, and vision contributions and coverage. Are these benefit contributions to be made manually, or not at all? What additional deductions is the University obligated to take since the payment will not be issued on the employee's primary pay cycle? Should deductions be taken for the 403(b), DepCare, and AD&D plans, etc?

A: The employee is entitled to coverage (medical, dental, and vision) for the month following separation. (The Payroll/Personnel System establishes Plan Coverage End Dates as of the last day of the month following the month of separation.) Consequently, the payroll office will withhold the corresponding medical, dental, and vision premiums and any appropriate voluntary deduction amounts, such as 403(b) deductions.

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Q: When a separating employee does not provide his or her timesheet, or in some other way does not respond to requests for information needed to produce and deliver his or her final paycheck, is the University still obligated to comply with the payment provisions?

A: Yes, make every effort to pay the employee any unpaid wages within the 72-hour period for employees who quit without notice.

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Posting pay dates

Q: Where should paydays be posted? Should they be posted centrally, such as in the payroll or HR office, or in every department or unit?

A: Posting is required "conspicuously at the place of work, if practicable, or otherwise where it can be seen as employees come or go to their places of work or at the place of payment." The place of posting may vary. Sometimes it should be the unit; sometimes it may be a department or building. The point is that employee must be able to see it.

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Disposition of final payment

Q: Is the 72-hour rule measured in actual hours or working hours? For example, an employee gives no advance notice and announces his immediate resignation at 4:45 p.m. on the Friday of a holiday weekend. Must his check be made available to him by Monday at 4:45 p.m.? Must this occur even if there is no time on Friday to produce the check and Monday is a University holiday?

A: Yes, the University must count the 72 hours continuously from the date and time of separation. If an employee resigns without notice at 4:45 p.m. on Friday of a holiday weekend (Monday being the holiday), the University must begin counting the 72 hour period at 4:45 p.m. Friday. However, the employee's final check must be made available to him on Tuesday by 4:45 p.m. since Monday is a holiday. (Governmental Code, section 6700, also defines Sunday as a holiday.)

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Q: Should departments use certified or registered mail, or at least acquire some proof of mailing, to document that final checks were mailed within the legal timeframes?

A: Yes, central offices and departments should use a mailing method that will furnish proof of mailing.

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Q: Is Surepay an approved method of payment under the code or does a check have to be issued and handed to the individual? Can an employee waive the check process if he or she prefers receiving final payment through direct deposit?

A: It does not appear that the use of Surepay will satisfy the code. Section 213(d) provides: "If an employer discharges an employee or the employee quits [a] voluntary authorization for deposit shall be deemed terminated" and the employee must be paid according to "this article relating to the payment of wages. A discharged employee must be paid immediately, which constitutes "in person." A "quit" (voluntary resignation) employee who does not give 72-hour notice may receive payment by mail if the employee so requests. The language regarding Surepay is mandatory. Furthermore, Section 219 states: "[N]o provision of this article can in any way be contravened or set aside by a private agreement, whether written, oral or implied." Thus, even if an employee wanted to receive her pay via Surepay, the University can not use this method of payment.

Note: If the employee has already received final payment by direct deposit prior to the end date of the appointment and the employee is owed no money, no paper check needs to be prepared. For example, monthly paid employees with a June 30, 2001, predetermined end date, are scheduled to receive their final monthly payment on June 29, 2001. Direct deposit is allowed in these cases because their pay is issued prior to the end date of the appointment.

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Potential penalties

Q: What are the potential misdemeanor penalties?

A: The penalty for a misdemeanor is found in Labor Code Section 23: "imprisonment in a county jail, not exceeding six months, or ... a fine not exceeding one thousand dollars, or both." Back to top

Q: What are the potential financial penalties?

A: Labor Code section 203: "If an employer willfully fails to pay any wages of an employee who is discharged or who quits, the wages of such employee shall continue as a penalty from the due date until paid or until an action is filed and shall not continue for more than 30 days."

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Questions? Contact Nini Cruz, (858) 534-1567.