Posted on January 27th, 2020
Full Transcript Below:
What’s happened in fellow entrepreneurs? It’s John Fagerholm again. Today I want to talk about a law that’s coming into effect January 01, 2020 called SB-673.
Basically what SB-673 does, is it expands what essentially our wait time penalties. So, the labor board can assess a wait time penalty on employers that don’t pay employees once they are either terminated or quit, if they don’t pay them within the time required.
So if an employee were to quit, then the employer has 72 hours to pay them all of their wages or wait time penalties apply. If you terminate an employee, then you have to pay all of the wages within that day or wait time penalties apply.
The wait time penalties is the daily rate of the employee times a maximum of 30. For example, let’s say you terminate an employee and you don’t pay them whatever’s owed to them for 30 days, which is the maximum time.
If their daily rate was $100 a day, then you would owe an additional $3,000 on top of whatever their wage is. That’s the way it stands right now. What SB-673 does is, it expands that.
Now, wait time penalties can be applied for late wages, even for employees that still work for you. That’s the gist of SB-673. There was one other thing about it that I’m going to have to read this because I don’t have it memorized.
But it’s the penalty is different. The wait time penalty as it exists under the labor board now is, like I said, is the daily rate times a maximum of 30.
So, it seems that the new penalty is different, but I’m not quite sure yet if it applies to both people that are employed or employees that are still employed or only to employees that are still employed or if this is new and applies to everybody.
So let me read this off cause I think this is really important. Under the new wait time penalty, the penalties for late paid wages are $100 for the first violation, and $200 for each subsequent violation.
In addition, the employer must pay 25% of the wages that were paid late. That seems to be the new wait time penalty. But I guess the question then is, does the old wait time penalty apply at all or does this new one just apply to current employees or does it apply to everything?
Anyway, that’s new expansion of wait time penalties. Once again, California doesn’t believe that that employers pay enough in penalties, so they’ve expanded it to make sure that they pay more.
All right. Until next time fellow entrepreneurs.
