Sometimes, an employer is asked to pay what is called a waiting time penalty. A waiting time penalty is based upon California Labor Code Section 203 as to the amount. The waiting time penalty is authorized if California Labor Code 202 is violated.
When does an employer owe a Waiting Time Penalty?
A Waiting Time Penalty applies when an employer willfully fails to page all wages on the last day of an employee. It should be noted that an employer that reduces the wages owed by some improper deduction from the wages would owe the employee wages and trigger the Waiting Time Penalty. Additionally, familiarize yourself with overtime entitlements to ensure compliance with all compensation regulations.
When is a Waiting Time Penalty Owed by an Employer?
When there are earned wages that are unpaid on an employee’s final day. If there is any doubt about whether a wage is earned, it is better to either consult an attorney to be sure or pay the amount to avoid the potential penalty. To understand what deductions may legally be made from a paycheck, thus avoiding additional penalties, read our comprehensive guide on proper paycheck deductions.
How do you calculate the Waiting Time Penalty amount?
The Waiting Time Penalty requires you to know at least two things to calculate the amount.
First, what is the employee’s daily rate of pay? If a person only receives an hourly wage, then the regular hours worked times the hourly rate. So, if a person is paid $20/hr and works 8 hours a day, then the daily rate of pay is $160. Please note that the daily rate is determined by a working day, so it is not reduced for the days you may not work in a month. Thus, even if one usually has the weekends off, those are still counted as working days for the penalty.
Since it is a penalty, no deductions are withheld from the Waiting Time Penalty.
Second, how many dates late was the pay (up to 30 days maximum)? If the Employer was, say 31 days late, then the maximum of 30 days would be due from the Employer. Given the above example, $160*30 days is $4,800. For further assistance with wage disputes and other business-related conflicts, don’t hesitate to contact Nick Heimlich Law today for business contract disputes.
