California Severance Pay

Businesses in California are not required by law to offer severance pay to employees who are being laid off. For this reason, the California Department of Industrial Relations instructs employees to refer to their employers' specific policies on severance pay. However, employers are required to give terminated employees all the pay that is owed them, including sick leave, and earned but unused vacation time. By law, an employee who has been laid off must be paid within 72 hours of notification. The employee may request that their final paycheck be sent to a specified address. If an employer decides to lay off 100 or more employees (including part-time) at one location, he must provide these employees with at least 60 days notice, in accordance with the California Warn Act.

Fast Facts

  • Severance payments in California that are made in accordance with ERISA are subject to federal law.
  • Collective bargaining agreements with unions typically stipulate that laid off employees in California are entitled to severance pay.

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