Payment of Final Wages Due in 72 Hours

Q After consulting for 1 1/2 years for a major accounting firm, I decided to return to corporate America.

I gave more than three weeks’ notice and received my salary when I left. But I was not paid for my accrued vacation time or reimbursed for expenses, which I submitted on time with the necessary receipts.

Since leaving, I have heard nightmare stories that the firm has a history of denying expenses and has held up final checks for as long as 70 days after employees have departed. When I called the firm’s national human resources office, I was told my final check will be mailed when everything is “reconciled and audited.”

Is such a delay allowed?

--C.K., San Pedro

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A Unless a written contract says otherwise, a resigning employee is legally entitled to receive all unpaid wages within 72 hours after the last day of work, or on the last day of work if the employee has given notice of 72 hours or more. Employees who are discharged or laid off, however, are entitled to payment of full wages on their last day of work.

There is a fairly serious penalty if an employer willfully fails to pay terminal wages when due. In addition to the unpaid wages, the employer is charged “waiting time penalties” equal to a full day’s pay for every day that the payment is late, up to a maximum of 30 days’ pay.

The law treats vacation pay as a form of wages, and you therefore should have received full payment of your accrued vacation pay on your last day of work (since you gave 72 or more hours’ notice that you were quitting) unless you signed a contract changing the date of payment.

If the horror stories about your firm’s history of holding up final paychecks are true, you would certainly be entitled to receive waiting time penalties as well.

Your claim for unreimbursed expenses is different. An employer must reimburse expenses necessarily incurred in an employee’s performance of job duties or obedience to the employer’s directions. This rule cannot be changed in a written contract, unlike the rules for wage payments to resigning employees.

Unfortunately, the law doesn’t set a time limit for the reimbursement of expenses. If you file a claim with the labor commissioner or bring a lawsuit, however, you should be able to recover the unpaid expenses plus interest, and perhaps your attorney’s fees.

--Joseph L. Paller Jr.

Union, employee attorney

Gilbert & Sackman

Employer’s Insurance Deduction Is Illegal

Q I work for a large real estate franchise. We pay a monthly fee to cover insurance for our errors and omissions.

The company took $500 from my first paycheck, saying it would be my deductible if I were ever sued. The company says the amount will not be refunded, even if I never am sued.

Can the company make such a deduction and then keep it if I decide to leave and have never been sued?

--L.F., Los Angeles

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A It’s illegal for an employer to make deductions from your paycheck to help pay its insurance costs. You are legally entitled to the amount that was withheld.

For help in pursuing your rights, contact the California Division of Labor Standards Enforcement. It also is illegal for your employer to fire you because you have complained about the deduction.

--Don D. Sessions

Employee rights attorney

Mission Viejo

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If you have a question about an on-the-job situation, please mail it to Shop Talk, Los Angeles Times, P.O. Box 2008, Costa Mesa, CA 92626; dictate it to (714) 966-7873, or e-mail it to [email protected]. Include your initials and hometown. The Shop Talk column is designed to answer questions of general interest. It should not be construed as legal advice.