COVID-Related Mass Terminations and Final Pay Requirements for Unpaid Vacation and PTO

Hundreds of thousands of employees in California have been terminated in recent weeks in response to the COVID-19/Coronavirus pandemic.  California law provides that when an employee separates from their employment, they must be paid out all wages due – including vacation/PTO – within 72 hours.

 

In normal times, this requirement is fairly straightforward.  Employers either give employees their final paycheck at the termination interview or mail the check so that it arrives within the 72-hour window.  Coronavirus has complicated things.  First, many employers lack the cash flow/liquidity to pay terminated employees all accrued vacation/PTO within 72 hours of a mass layoff.  As a result, employees simply are not receiving those funds, or are receiving them much later than 72 hours following separation.  

 

This is a problem because California law considers vacation/PTO to be wages, the same as hourly pay and overtime.  Those funds are legally due within the 72-hour window.  If the employer does not comply, California Labor Code Section 203 provides that the employee’s wages continue as a penalty for up to 30 days following separation. 

 

So, if you were subjected to a mass Coronavirus termination and were not paid all vacation/PTO within 72 hours of separation, your wages continue for up to 30 days (until the time you are paid out).  This means that most employees who were subjected to these mass terminations and were not paid their accrued vacation/PTO are additionally due 30 days of wages at their normal hourly (or salary) rates.  

 

Therefore, if you were terminated as a result of the Coronavirus and were not paid all vacation/PTO wages you accrued within 72 hours of the termination, we may be able to file a case for you to recover those wages as well as up to 30 days of additional wages.  Please fill out the contact form for a free consultation/case evaluation.

 

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