Q. We have an employee that one of our supervisors needs to fire. Is it legal in California to suspend an employee and then terminate the employee after we have had time to cut the final paycheck? Should the employee be suspended with pay? I look forward to hearing from you to help clear up this dilemma. Thank You –
We have an employee that our supervisor needs to fire. Is it legal in California to suspend an employee and then terminate the employee after we have had time to cut the final paycheck? Should the employee be suspended with pay? I look forward to hearing from you to help clear up this dilemma. Thank You – Charlene, California
Answer No. 1:
Your question reflects your understanding, which is correct, that in California (and in many other, but not all) states, an employer must ensure that a terminated employee receives his or her final pay on the date of termination. The willful failure to pay a terminated employee in a timely fashion usually subjects an employer to a penalty, which consists of the continuation of the employee’s wages on a day by-day basis until the final paycheck is ready, or until a maximum time limit of 30 days is reached. A willful failure to pay is considered to be a conscious failure to pay and no proof of evil intent is required. The waiting time penalty is calculated by dividing an employee’s weekly pay by five and paying the resulting amount for each day that a penalty is due. The maximum penalty of 30 days’ pay may, as a result, exceed what an employee would earn in a month.
Certainly, therefore, you may place the employee on an administrative leave while deciding what to do with the employee; the real question is whether you must pay the employee during the suspension. The answer to your question, according to the California Department of Labor and Employment, is yes. That is, if you fail to pay the employee solely because you need time to cut the final paycheck, then you may trigger the “waiting time” penalties. If the suspension is imposed only to delay the date of the final paycheck, the employer may be accused of deliberately delaying the termination decision to avoid paying the check timely. In this case, your safest bet would be to pay the employee through the date of the termination and/or add a few days of “waiting time” to the final paycheck proactively if you realize too late that you haven’t done so.
It is possible, however, that the answer will be “no,” and that is when in fact the employee is merely suspended while the employer completes its investigation into whatever incident has come to light that might lead to termination. In other words, if an employee is accused of misconduct and you have not made the decision to terminate that employee when you place her on suspension, then it would appear that so long as you pay the employee immediately once the decision to terminate was made, you would not owe a waiting time penalty. In the example you give, however, it seems clear that the decision to terminate the employee has already been made, and in that case, it is important to act quickly to get the employee her final paycheck and/or to compensate her for the wait.
