Waiting Time Penalties: Labor Code Section 203

The state of California is known for issuing public policies that provide fair and objective treatment of wage earners and salaried employees. As such, labor laws are leaned towards efficient and prompt payment of these workers. One of these policies pertains to unpaid wages addressed by Labor Code Section 203. This legislation was specifically created to penalize employers who willfully fail to pay wages of their employees at the end of the employee-employer relationship.


Assessment of the waiting time penalties under the Labor Code Section 203 does not necessarily require proving the actual intent of the employer for not paying the employee on time; it is rather imposed based on the established fact that the employer should be on top of the situation; if the employer fully aware of its responsibilities as an employer, yet failed to perform what is expected of the company in terms of making a timely payment. It is, however, important to note that waiting time penalties are not automatically assessed all the time; there is such a thing as the “good faith dispute” which can prevent the company from being penalized.


For the penalty to be imposed, it is important to establish that, indeed, an employer-employee relationship existed, and such relationship ended as a result of employee discharge by way of resignation, termination, or layoff. Section 200 of the Labor Code identified “wages” as the basis for computing the applicable penalty for willful failure to pay such obligation to the concerned employee. Therefore, for purposes of penalty computation, all types of wages including overtime pay shall be included.


The formula for computing the penalty under Labor Code Section 203 is to multiply the employee’s daily rate by the number of days that there has been a delay in payment.  However, the penalty can only be computed up to a maximum of 30 calendar days.  The penalty shall continue to accrue until an “action” is made; the “action” can be in the form of actual payment of wages or by filing of a complaint in the court. The penalty will continue to accumulate even if the employee decides to file a formal claim with the Division of Labor Standards Enforcement. Once the waiting time penalty is given, it cannot be subjected to the regular payroll deductions as it is not considered as a wage earned by the employee.


Dealing with issues related to wages and employee benefits can be complicated and taxing. Solving the problems on your own can, in the long run, become futile and unsuccessful. To ensure that your rights are protected, seeking legal assistance is the most appropriate thing to do. Lawyers or law firms that specialize in handling labor cases can increase your chances of winning your case. Look for lawyers that have expertise in this field as not all of them can handle your case with the same competence.


If you feel that you have employee rights that are being violated, don’t hesitate to call reputable lawyers. Visit californiawagelawattorney.com and get in touch for a free consultation of your case.



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