The deadline surprises people because it is shorter than payroll. A termination decided on Tuesday morning means the check exists on Tuesday, not on Friday when everybody else gets paid. Labor Code section 201 does not contemplate a payroll cycle.
Labor Code section 203 permits waiting time penalties for a willful failure to pay wages when due, up to thirty days. Whether a penalty is owed depends on the facts and the applicable legal requirements; it is not automatic whenever payroll is late. A good-faith dispute can affect the analysis, but it does not excuse withholding amounts that are undisputed.
Two things routinely get left out of the final figure. Accrued and unused vacation, which section 227.3 treats as earned wages that cannot be forfeited. And other earned wages, such as a commission that is due and calculable under the applicable agreement. Handle outstanding business expense reimbursements too, but separately: reimbursements are not wages for purposes of the waiting time penalty.
The other common error is holding the check as leverage, for equipment that has not come back or a signature on a separation agreement. Final pay is not conditional on either.
What you can do
Work out the final figure before the meeting, not after, including accrued vacation and anything else already earned.
Have the check ready in the room for a termination, since the deadline is the same day.
Never hold final pay pending the return of property or the signing of an agreement. Handle those separately.
If a figure turns out to be wrong, correct it promptly and review whether any waiting time penalty is owed.
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