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Confusing CA situation California

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  • Confusing CA situation California

    Hi, I have a couple of questions, and hopefully I posted it in the right place.

    My boyfriend works for a small company (about 70 employees) and they have been paying all of the employees very, very late. Currently, they owe my boyfriend 3 paychecks. My boyfriend found out about a month ago (he over heard a conversation between his boss and the CEO) that the branch he works at will be closing and laying off all of the employees. My boyfriend and his boss are staying a few weeks longer to help pack things up, while everyone else had their last day today. The employees all found out 1 by 1 and no general statement was ever made, not even an email was sent. The company is obviously having financial issues but that is not an excuse for not giving employees a warning. Anyway, since only my boyfriend and his boss are staying longer, everyone else recieved a paycheck today. By CA state law, I believe they should have been payed EVERYTHING they are owed, all 3 paychecks plus vacation time they have earned. Is this correct? Also, if they file a wage claim what does it even do? Will they just get their money faster? And what are the laws about a company laying off an entire branch and not being able to financially pay their employees? If there is no money, what will happen? There are still 2 other branches that will remain open for now..

    I am guessing they should all file a wage claim, any other suggestions? Even though by boyfriend hasn't had his last day yet, I'm sure he won't be getting all of the money he's owed when it comes around and he wants to know what to do before hand.


  • #2
    Once the company misses the regularly scheduled payday, they are already in violation of California wage payments laws.

    And you are correct, the employees who are involuntary terminated are due their final pay, including accrued vacation, on their last day of work.

    The affected employees can either file a civil suit (and pay an attorney, a small claims action, or a claim with the Division of Labor Standards Enforcement. While the DLSE claim is the only one that is free, my understanding is that they do not actually collect the wages due from the employer and that once they determine the employer is in violation, the individual employee would have to get a judgment and handle their own collection of that judgment. I hope my understanding is wrong, but someone whose state is now California will correct me if it is.

    How many employees worked at the closed location?
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


    • #3
      I believe there were 15-20 employees at the location that is closing...or well, that is now closed. Also, I forgot to mention that some of the employees did file something a while back...not quite sure what it was, but they ones that did file all did received packets at work one day (my boyfriend did not file) because not only was the company behind, they had been behind since January of this year.


      • #4
        What are the penalties for not paying on time? I had a company do almost the same thing to me, they had payroll issues due to a lack of funds, didn't pay us for a couple of pay periods and when they did, they gave us a 25% bonus for not leaving. Now they didn't do this for all the pay periods, just a couple.

        My whole division also was laid off and now the company is barely holding on. Do I have anything to file for or am I reading too much into this?

        I've been laid off for over 9 months from them now.


        • #5
          Any penalties that there may be (and I'm not sure) for not paying the regular payroll on time would be paid to the state. There is a "waiting time penalty" if final pay is not paid on time.

          Reason I was asking about how many employees were involved in the OP's situation was to see if either the federal or California WARN Act applied, but neither do, since the number of employees was below the requirement.
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


          • #6
            California law doesn't require advanced notice in this type of situation.

            If they file a wage claim, they will be eligible to receive any pay owed as well as waiting time penalties up to 30 days from the date that the pay was due. You are entitled to 1 days wages for each day that you are not paid.

            If the company declares bankruptcy, then DLSE no longer has jurisdiction. Filing a claim in court stops the waiting time penalties from accrueing. Filing a claim with DLSE does not.

            There is a FAQ here:

            When the Order, Decision, or Award (ODA) is in the employee's favor and there is no appeal, and the employer does not pay the ODA, the Division of Labor Standards Enforcement (DLSE) will have the court enter the ODA as a judgment against the employer. This judgment has the same force and effect as any other money judgment entered by the court. Consequently, you may either try to collect the judgment yourself or you can assign it to DLSE.


            • #7
              The penalties for failing to pay paychecks can be substantial. In fact if the employees who were laid off already were not given all their wages on their final paycheck then their wages shall continue for no longer than 30 days or when they finally receive their final check including all their unpaid wages. Considering how bad you've described the situation it may be wise for one of the employees to contact a labor law attorney. The fines (on top of the owed interest and penalties) could add up to 10's of thousands of dollars in the hands of an attorney who knows their stuff and California Labor Law.


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