How is the Waiting Time Penalty Calculated in California?
Corey Hanrahan
Unpaid Wage Lawyer
How is the waiting time penalty calculated in California? Before we talk about the waiting time penalty calculation, let’s talk about waiting time penalties as a concept. Waiting time penalties are the penalty for employers not paying an employee all wages earned and owed (this includes unpaid vacation pay, bonuses, commissions, etc.) timely upon the separation of employment. The timing is covered in another one of my articles here, so I won’t go into detail on that in this article… because you came here to find out how your waiting time penalty is calculated.
So, the quick answer is that waiting time penalties in California are calculated based on an employee’s daily wage rate multiplied by the number of days their final paycheck is late. And these are calendar days, not weekdays or workdays – so you count Saturdays and Sundays too!
Again, these penalties are designed to encourage employers to pay departing employees promptly and in full… so let’s dive into the calculation method.
Calculation Method
Again, the waiting time penalty is equal to the employee’s daily wage for each day the final paycheck is delayed, up to a maximum of 30 days (that’s right, the penalties cut off at 30 days). Here’s how it’s calculated:
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Determine the daily wage rate: Take your hourly wage and multiply it by the number of hours that you typically worked in a day. For example, if earn $20.00 per hour and work 8 hours a day, your daily wage would be $160.
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Count the days of delay: Now that you have the daily rate, you need to calculate the number of calendar days from when the final paycheck was due until it was actually paid. Again, remember, this includes weekends and holidays. If you need a refresher on when your final paycheck was due, just refer to my other article.
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Multiple the daily wage by days of delay: Your waiting time penalty is your daily wage multiplied by the number of days the payment was late (up to 30 days).
Important Things to Remember
There are a few important things I want you to remember about waiting time penalties and their calculation:
- The waiting time penalty applies even if only $1 in final wages is paid late. The amount of money that is left unpaid from your final check has no impact on the waiting time penalty amount.
- It accrues on a daily basis, not just on days the employee would have normally worked. So, remember to count weekends and holidays!
- Regularly worked overtime and commissions are both included in calculating the daily wage rate. So, if you normally worked two hours of overtime each shift, you need to use that amount in your daily wage rate calculation.
Legal Basis
The waiting time penalty entitlement is found in California Labor Code Section 203. It applies when an employer willfully fails to pay final wages immediately upon termination or within 72 hours of resignation (if no advance notice was given).
By understanding how waiting time penalties are calculated, employees can ensure compliance with California labor laws and protect their rights in the workplace.
Conclusion
If you were not paid all wages earned and owed timely upon separation of your employment (whether you resigned or were terminated), you could be owed a substantial amount of waiting time penalties. Reach out to unpaid wages lawyer Corey Hanrahan to see if you are owed waiting time penalties.