Wages on Termination Day

How much pay does an employer have to give a non-exempt employee under CA law on the employee’s termination day if the employee is terminated prior to the end of his or her shift? If the employee works more than half his or her shift before the termination, then the employee must be paid for the hours actually worked. If the employee works less than half of the shift, then he or she is owed reporting time pay equal to half the employee’s usual or scheduled day’s pay, with a minimum of 2 hours and a maximum of 4 hours required. Thus, for example, an employee who normally works an eight-hour day (or longer) would be owed four hours of pay, and an employee who normally works 3 hours (or less) would be owed 2 hours of pay. There is an exception to this rule if the employee is called to a termination meeting on a day the employee is not scheduled to work. In that circumstance, the employee is owed only two hours pay based on the minimum reporting time pay requirement (according to a new California Court of Appeal case, Price v. Starbucks). Because these rules are tricky, and can lead to a dispute, an employer wanting to be absolutely safe may choose to pay the terminated employee all of the wages he or she would have earned on the termination day, regardless of when during the shift the employee is terminated. Although not required and somewhat more costly, such a decision can avoid disputes based on errors or misunderstandings. –Adam K. Treiger

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