Know Your Rights · Guide IV of IV
When your final paycheck is due, what a severance release asks you to give up, layoffs, unemployment benefits, and agreements you cannot be forced to sign.
Talk to a lawyer: (310) 203-2650General information about California law, not legal advice. Reading this does not create an attorney-client relationship.
Final pay includes earned, unused vacation time, paid at your final rate of pay. A company policy cannot make you forfeit vacation you already earned.
What to do
Write down the date and time you received your final check, and what it covered.
Law:Lab. Code §§ 201(a), 202(a), 227.3
If an employer willfully fails to pay final wages on time, your daily wages keep running as a penalty for up to 30 days. 'Willfully' here means it intentionally did not pay. It does not require bad intent.
What to do
Keep your final pay stub and any messages about late or missing pay.
Law:Lab. Code § 203(a); CACI No. 2704
Four days late
Pineda v. Bank of America, N.A. (2010) · California Supreme Court
A bank employee gave two weeks' notice. His final pay was due on his last day but arrived four days late. He sued for late-pay penalties about 17 months later.
A claim for late-final-pay penalties has the same three-year deadline as a claim for the unpaid wages themselves. The court reversed and sent the case back.
Write down the date and time you received your final check.
This is a published court decision. Benjy Law Corporation was not involved in the case. Facts are as described in the court's opinion. The decision states a legal rule; it does not predict how any other case will turn out.
If you are offered a separation or severance agreement, California law requires the employer to tell you that you have the right to consult a lawyer, and to give you at least 5 business days to do so.
You can sign sooner only if that is truly your choice. The employer cannot rush you with a threat to pull or change the offer, or by giving better terms to people who sign early.
Read the whole agreement. Some severance agreements add a new arbitration clause or change where future disputes must go.
What to do
Say: 'Thank you, I'd like time to review this.' Then take it to a lawyer before signing.
Law:Gov. Code § 12964.5(b)(4)
A release usually gives up your right to sue over your job in exchange for money. California law says a general release does not cover claims you did not know about when you signed. But many severance agreements are written to give up unknown claims too, and courts enforce them.
Once you sign, it is very hard to undo. Needing the money to pay your bills is not enough to cancel it.
What to do
Before signing, ask yourself: 'Am I giving up a claim that could be worth more than this offer?' A lawyer can help you answer that.
Law:Civ. Code §§ 1541, 1542; Perez v. Uline, Inc. (2007) 157 Cal.App.4th 953
Needing the money isn't duress
Perez v. Uline, Inc. (2007) · California Court of Appeal
After he was fired, an employee signed a take-it-or-leave-it severance agreement that released his claims. He later sued anyway, arguing he signed because he needed the money.
Needing money to pay bills is not economic duress, and the release barred most of his claims. It could not, however, release his claim that he was fired because of his military service, which federal law protects.
Once you sign, it is very hard to undo. Get advice before you sign, not after.
This is a published court decision. Benjy Law Corporation was not involved in the case. Facts are as described in the court's opinion. The decision states a legal rule; it does not predict how any other case will turn out.
An employer cannot make you sign a release to get wages you are already owed. A release signed that way is void as to those wages.
What to do
If your final paycheck is tied to signing something, don't sign. Talk to a lawyer.
Law:Lab. Code § 206.5(a)
A severance agreement cannot stop you from talking about unlawful acts at work, such as harassment or discrimination. California requires agreements with confidentiality or non-disparagement terms to say so.
What to do
Look for this sentence: 'Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace.' If it's missing, flag it.
Law:Gov. Code § 12964.5(b)(1)(B)
If you are 40 or older and a release covers age claims, federal law says the waiver is not valid unless, among other things:
What to do
Count the days on your calendar. If the employer rushes you, note it.
Law:29 U.S.C. § 626(f) (OWBPA)
Calling a firing a 'layoff' or 'restructuring' does not make it lawful. If your protected trait, complaint, or leave was a real reason you were picked, the label does not matter. If you were laid off during protected leave, the employer must prove your leave was not a reason.
What to do
Write down who else was laid off, who was kept, and who later took over your work.
Law:CACI Nos. 2500, 2570, 2612
Being fired does not automatically disqualify you from unemployment benefits. You are disqualified only if you were fired for misconduct connected with your work, or quit without good cause.
The law presumes you were not fired for misconduct. To change that, your employer must give the EDD written facts showing otherwise.
What to do
File with the EDD as soon as you are let go. If the employer claims misconduct, get advice before the EDD hearing.
Law:Unemp. Ins. Code § 1256
If you quit without good cause, you can be disqualified from unemployment. But California law recognizes that some reasons for leaving may count as good cause, including:
What to do
Before you quit, write down your reason. Talk to a lawyer if your reason is mistreatment at work.
Law:Unemp. Ins. Code § 1256
It is unlawful for an employer to require you, in exchange for a raise or bonus, or as a condition of getting or keeping your job, to:
An agreement like that is unenforceable.
This rule does not stop most employers from requiring an arbitration agreement. See the arbitration cards in Protect Yourself.
What to do
If you're asked to sign something like this, ask for a copy and talk to a lawyer before signing.
Law:Gov. Code § 12964.5(a)
No obligation consultation. Statewide California.
Benjy Law Corporation is committed to making its website accessible to everyone, including people with disabilities. We strive to conform to the Web Content Accessibility Guidelines (WCAG) 2.1, Level AA.
If you experience any difficulty accessing any part of this website, please call (310) 203-2650 and we will assist you and work promptly to remedy the issue.