Payment Of Wages Upon Retirement

The California Supreme Court confirmed that even in cases of retirement, an employee must receive their wages on the day they retire so long as they have given at least 72 hours notice of retirement. The decision is based upon California Labor Code sections 201 and 202: If an employee is discharged, “the wages earned and unpaid at the time of discharge are due and payable immediately.” (§ 201.) If, however, “an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting.” See Cal. Lab. Code § 202. Moreover, an “employer” that “willfully fails to pay” in accordance with sections 201 and 202 “any wages of an employee who is discharged or who quits” is subject to so-called waiting-time penalties of up to 30 days‟ wages. See Cal. Lab. Code § 203, subd. (a).

In the case of
Janis S. McLean v. State of California, an employee of the Department of Justice sued on behalf of herself and a class of former state employees who, having resigned or retired, did not receive their final wages within the time periods set out in the California Labor Code. The trial court sustained a demurrer that argued retirees are separate than employees who quit. The Court of Appeals reversed the decision and the High Court agreed with the Court of Appeal and remanded the case to state court to allow it to proceed.