If we close our company due to COVID-19, how do we give our employees their final pay?

Employers still must meet final pay requirements and are subject to waiting time penalties. These requirements may be especially difficult to meet if a company’s workforce is currently working remotely.

Currently, by law, employers must provide the final paycheck at the time and location that a severance occurs. Due to social distancing, employers can’t really do these layoffs in person. Once the employee has their employment severed, they must be paid their final pay, including owed vacation and paid time off, to the best of the employer’s ability.

For example, employers may choose to add the appropriate waiting time penalties to the final paycheck — which is one day of wages for every day the final paycheck is late, up to 30 days — and then mail the check with overnight delivery to the employee.

The Labor Commissioner is currently looking at this issue and further guidance is expected.

Read more about Final Pay Explained in the HR Library.

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