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CA Labor Code 203
July 1, 2024

California Labor Code 203 Overview & Example Scenarios

Legally reviewed by: Jessica Anvar Stotz, JD, MBA

California Labor Code 203 is a California labor law that creates a penalty employers must pay if they do not pay their employees on time when they quit or are fired according to CA Labor Code 201 and 202. This penalty functions by requiring the employer to pay an extra day of wages for every day they are late on the final paycheck payment. This penalty stops accruing once the payment is 30 days late.

California Labor Code 203 Explained in 90 Seconds

California Labor Code 203 primarily provides the “waiting time penalty” that creates a punishment for employers who refuse to properly abide by CA Labor Codes 201 and 202. This penalty is in place so that employers are incentivized to pay their employees who quit or are fired on time. When an employee quits, and has provided notice at least 72 hours before quitting, they are entitled to receive their paycheck immediately upon leaving. CA Labor Code 203 allows such an employee to receive additional compensation if the employer improperly delays in paying them. Similarly, an employee who is terminated by an employer is required to receive their final paycheck on the day they stop working. If an employer delayed this payment, they would also be subject to CA Labor Code 203’s penalty.

Finally, if an employee quits without providing notice and the employer does not provide them their final paycheck within 72 hours, the CA Labor Code 203 penalty begins counting additional days of wages after those 72 hours elapse.

The sections of the California Labor Code that Code 203 applies to are California Labor Code 201 and 202. CA Labor Code 201 covers situations where employees are fired and when employers must pay them. Similarly, CA Labor Code 202 deals with situations where an employee quits, either with or without providing notice to their employer.

Labor Code §203 According to the California Government

(a) If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 201.6, 201.8, 201.9, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents themselves to avoid payment to them, or who refuses to receive the payment when fully tendered to them, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which the employee so avoids payment.

(b) Suit may be filed for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise.

How Much is the Penalty?

The penalty created by CA Labor Code 203 is fairly straightforward to understand. For each day an employer is late in paying their employee, an additional day of wages is added to what the employer owes. For example, if an employee made 110 dollars per day working, and their employer was three days late in paying the last paycheck, the employee would receive 330 additional dollars on top of what was unpaid and already owed (three days late x 110 dollars per day = 330).

When are You NOT Entitled to the Penalty?

There are two limited exceptions to when an employee cannot receive the penalty created by CA Labor Code 203. The first exception is when the employee purposefully hides or otherwise keeps themselves from being paid by their employer. This would improperly increase the penalty and undermine its purpose: to punish the employer for failing to pay the employee on time. The other exception is when employees explicitly reject the payment of unpaid wages. Like the other exception, this warps the purpose of the penalty and would only serve to improperly inflate it.

How to Claim the Waiting Time Penalty

There are two options for employees to pursue their final paycheck or waiting time penalties, if they exist. Filing a wage claim with the Divison of Labor Standards Enforcement is typically the first option an employee might take. Employees have many options for filing a claim online, through the mail, by email, or in person. In order to best process the claim, the DLSE requests the name and address of the company being filed against, any other responsible parties, and payment information including the number of hours worked, how many breaks were taken, and other documentation like paystubs. Generally speaking, the more information there is, the better an employee’s claim can be addressed.

Other than filing a claim, employees can sue their employer when the employer does not pay unearned wages and waiting time penalties. Notably, the statute of limitations period for unpaid wage claims is typically one year, meaning that a claim brought more than a year after the employer has refused to pay will no longer be legally pursuable. Employees should therefore take note of how long it has been since not receiving their final paycheck if they choose to sue. The statute of limitations for the waiting time penalties is the same as the initial unearned wage claim, so being aware of this time period is crucial to ensure an employee’s claim is preserved.

Example Scenarios

Scenario 1: Employee Provides Notice of Quitting, Employer Delays Final Payment

  • Scenario: A waitress provides her employer with a notice of her intention to quit a week before she quits. After her final day of work, she is not paid for her unpaid remaining wages. Five days go by before the employer pays her the final paycheck.
  • Violation: Employer delayed too long in providing the final paycheck and a CA Labor Code 203 penalty will apply.
  • How Labor Code 203 Protects: CA Labor Code 203 creates a penalty the employer in this case will have to pay because of their improper delay in providing the final paycheck.

Scenario 2: Employee is Terminated by Employer, Employer Delays Final Payment

  • Scenario: A cashier is fired by his employer. Two days after being fired, the employer gives the cashier his final paycheck.
  • Violation: Employer improperly delayed in providing the final paycheck and a CA Labor Code 203 penalty will apply.
  • How Labor Code 203 Protects: When an employer fires an employee, the employee’s final paycheck is due immediately. By waiting two days to provide the final paycheck, CA Labor Code 203’s penalty applies to the employer. In this particular case, the employee would receive two additional days of wages for the delay.

Scenario 3: Employee Quits with Notice, Hides from Employer

  • Scenario: A nurse provides her employer with notice of quitting two weeks before she actually quits. After she quits, she actively makes efforts to refuse being paid by her employer by driving around the state and refusing all contact. Ten days later, she returns home and receives her final paycheck.
  • Violation: The employee lost her ability to receive the waiting time penalty by hiding herself from her employer.
  • How Labor Code 203 Protects: When an employee takes steps to hide from their employer or otherwise make it difficult or impossible to be provided their final paycheck, the penalty does not apply. In this case, because the employee hid from the employer and avoided being paid, she would not get the penalty during the time she was hiding.

Resources for Employees and Employers

  1. California Code, Labor Code – LAB § 203
  2. California Code, Labor Code – LAB §201
  3. California Code, Labor Code – LAB §202
  4. California Department of Industrial Regulations
  5. California Department of Industrial Regulations: How to File a Wage Claim
  6. California Department of Industrial Regulations: Required Documentation for a Wage Claim
  7. California Department of Industrial Regulations: Waiting Time Penalty

Connect with an Attorney

California has powerful labor laws in place to protect employees and provide guidelines for employers. However, they cannot protect employees who do not bring claims against their employers. If your employer has improperly delayed the payment of your final paycheck, obtaining legal advice from a skilled attorney is your best option to be adequately compensated. LawLinq can help you find an experienced and highly qualified employment attorney who can assist you in the navigation of a claim. Get in touch with us by calling (855) 997-2588 or by submitting a form on our website today!

 

 

About the Author

Jessica Anvar

California Consumer Litigation Attorney Jessica Anvar, Esq. is the Founder and Managing Partner of Lemon Law Experts California’s leading lemon law firm. She has multiple years’ worth of experience working with both state and federal lemon laws. Her practice focuses exclusively on consumer protection cases. Ms. Anvar received her J.D. from Loyola Law School. She also earned a Master of Business Administration degree from Loyola Marymount University. Jessica is very active in her local legal community and has helped thousands of clients across the state of California. She has an outstanding record as a true advocate for consumers.

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