California · Checked October 28, 2026 · Not legal advice
California final paycheck rules
California is stricter than Florida. A discharge is paid at the time of termination. A quit without notice is paid within 72 hours. Earned, unused vacation is part of those wages. The statewide minimum wage is $16.90 in 2026, and many cities are higher.
Not legal advice. This summary is for owners who need the shape of the rule before they call payroll or a California employment lawyer. It does not cover every industry exception, union agreement, or city ordinance. JD HR Solutions is based in Florida. A California-specific dispute should go to counsel licensed there. The Florida HR Checkup is not a California audit.
At a glance
| Situation | When wages are due |
|---|---|
| You discharge the employee | Immediately, at the place of discharge. Labor Code sections 201 and 208. |
| They quit and gave at least 72 hours' notice | At the time of quitting. Labor Code section 202. |
| They quit without 72 hours' notice | Within 72 hours. They can ask you to mail it. The mailing date counts as the payment date. |
| Unused vacation | Pay vested vacation as wages. Labor Code section 227.3. |
| Unused paid sick leave | Not required, unless your policy says you pay it. DIR's final-pay sheet says this directly. |
| Willfully late | A waiting-time penalty of the employee's daily wage, up to 30 days. Labor Code section 203. |
Discharge versus quit
The Division of Labor Standards Enforcement puts it in one place: an employee who is discharged must be paid all wages, including accrued vacation, immediately. An employee who quits with at least 72 hours' notice is paid at quitting. An employee who quits without that notice is paid within 72 hours, and can require the check to be mailed to an address they designate.
There are narrower timing rules for some seasonal canning work, motion-picture employment, and oil drilling. If that is your industry, read Labor Code sections 201, 201.5, and 201.7 instead of stopping here.
"All wages" means wages earned and unpaid, not a goodwill bonus you never promised. If part of the amount is genuinely disputed, Labor Code section 206 still requires you to pay, without demanding a release, whatever is undisputed. DIR says a good-faith dispute can defeat the waiting-time penalty. Holding the undisputed amount because you disagree about the rest does not.
Vacation, PTO, and sick leave
Labor Code section 227.3 treats vested vacation as wages and requires it to be paid at the final rate when employment ends. A policy that says earned vacation is forfeited at termination does not hold up under that section. Use-it-or-lose-it vacation is the kind of rule that gets employers into this statute.
Paid sick leave is different. DIR's final-pay guidance says California does not require payout of accrued sick leave at termination. The trouble is a single PTO bank that employees use for vacation. If the bank includes vacation, treat it as vacation wages unless a California lawyer has told you the policy is structured otherwise. Don't guess from a Florida handbook.
The PTO calculator only does the hours. It does not apply section 227.3.
Minimum wage and overtime
DIR's 2026 minimum-wage notice sets the statewide floor at $16.90 an hour for all employers, effective January 1, 2026. Fast food restaurant employers and many health-care employers have higher rates. Cities and counties often do too. DIR points employers to the local list and to its own industry supplements. Check those before you use $16.90 as the number on a paycheck.
Overtime for most nonexempt employees is in Labor Code section 510 and the wage orders: time and a half after 8 hours in a workday up to 12, double time after 12, time and a half after 40 in a workweek, and on the seventh day worked in the workweek the first 8 hours at time and a half and hours after that at double time. You don't stack two overtime premiums on the same hour. A properly adopted alternative workweek is a real exception, and it has an election procedure. If you didn't do that procedure, don't assume 10-hour days are straight time.
The overtime calculator has a California mode for the general rule. It does not model alternative workweeks, agriculture, or collective bargaining exceptions.
What to do this week if someone is leaving
Have the check ready before the meeting
If you are ending employment, "we'll drop it in Friday's payroll" is the failure mode this statute is aimed at.Include vacation that has vested
Pull the balance from payroll and pay it at the final rate. Keep sick leave separate if it is actually a separate bank.Pay the part you agree is owed
Argue about the disputed bonus later. Don't condition the undisputed wages on a signature.Ask a California lawyer if the person already has a lawyer
Waiting-time penalties and wage statements (Labor Code section 226) are where small disputes get expensive.
Other states on this site
Sources
- California DIR, Paydays, pay periods, and the final wages
- California DIR, Final pay (Labor Code sections 201, 202, 203, 206, 208, and 227.3; sick leave not required to be paid out)
- California Labor Code section 510 and DIR, overtime FAQ
- DIR, minimum wage and the MW-2026 notice ($16.90 effective January 1, 2026)
General information, not legal advice and not a California legal opinion. City ordinances and industry wage orders can change the numbers above.