Letting Go the Right Way: Performance-Based Terminations Done Right

What Every Employer Needs to Know About California Termination Compliance

Terminating an employee in California comes with a host of legal responsibilities. Miss a step, and you could end up with fines or lawsuits. Here’s what you need to know to stay compliant and protect your company.

Can I call a termination a “layoff” to avoid conflict?

Tempting as it may be, don’t do it. Calling a termination a “layoff” when it isn’t truthful can backfire. It may lead to confusion about unemployment eligibility, raise red flags during audits, or give the employee a reason to question your integrity. It also limits your ability to hire for the same position without being sued for discrimination. Be honest and accurate in how you document the separation.

Can I terminate an employee who has exhausted their leave of absence?

Once an employee has used all of their protected leave (such as FMLA or CFRA), and no further accommodation can be made, you must analyze whether they are protected under disability laws such as ADA and FEHA. Ensure you’ve gone through an interactive process and consulted legal counsel or HR experts before making a final decision.

What are the rules for providing a termination paycheck?

In California, if you terminate an employee, their final paycheck is due immediately at the office of the employer in the county where the work was performed—on their last day. It must include all wages earned, including any accrued but unused vacation. If the employee resigns with at least 72 hours’ notice, their final check is also due on their last day. If they give less notice, you have 72 hours to get it to them.

What if a final check isn’t picked up?

If you’ve made the final paycheck available, but the employee doesn’t pick it up, document your efforts to deliver it. If the employee specifically requests that it be mailed and designates a mailing address, you can mail it to them with tracking. If a final check goes unclaimed, employers are required to follow the state laws for submitting unclaimed paychecks to the state.

What are the steps if an employee has passed away?

In California, final wages owed to a deceased employee can typically be paid to their next of kin or estate, depending on the circumstances. There are specific forms and requirements to follow, so it’s best to consult with an HR expert or employment attorney before issuing the check.

California employment law can be complex. We’ll help you stay compliant and protect your business every step of the way. Reach out to us before your next employee separation.