Increase in Penalty for Late Payments of Regular Pay Cycle Checks in California

Increase in Penalty for Late Payments of Regular Pay Cycle Checks in California

Waiting time penalties for willful late payment of final wages due to terminated/resigned/laid-off employees are well known, but the California Legislature also increased the penalty and eased the ability of a current employee to recover penalties for any late paychecks received during employment. Prior to the law change, the government could bring a one-year look-back penalty claim for $100-$200 per late paycheck involving current employees, or the aggrieved employee(s) could do so and retain 25% of the recovery while returning 75% of the penalty to the government. Now, aggrieved employees can pursue and retain the full penalty themselves, plus an additional penalty equaling 25% of the wages that were paid late. It is therefore critical, now more than ever, that clients maintain organized processes for timely distribution of paychecks to their current workforces.