On August 18, 2016, the California Supreme Court confirmed that the final wage payment rules provided for by the California Labor Code apply to retiring employees.
In McLean v. State of California, McLean filed a class action lawsuit against her former employer, the State of California, after the State failed to make "full and prompt payment of wages" when she retired from her employment. The prompt payment provisions of the California Labor Code impose certain timing requirements on the payment of final wages for employees who are discharged and to those who quit their employment. If an employee is discharged, an employer must pay all earned and unpaid wages immediately at the time of discharge. Cal. Lab. Code § 201. If an at-will employee quits his or her employment, the employer must pay the employee no later than 72 hours thereafter unless the employee has given 72 hours' notice of his or her intention to quit, in which case the employer must make a final payment of the employee's wages at the time of quitting. Cal. Lab. Code § 202. If an employer willfully fails to pay in accordance with sections 201 and 202, the employer may be subject to additional waiting-time penalties of up to 30 days' wages. Cal. Lab. Code § 203.
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