Employers Must Pay Their Employees Immediately Upon “Discharge”

Most employers are well aware that if they terminate an employee for any reason of if it’s a lay-off, they must pay that employee’s wages (which includes vacation and sick time if applicable) in full immediately upon discharge. But, what if an employee works for a certain company on per assignment basis, where upon completion of one assignment of a certain duration, the employee might have to wait a shorter or a longer period of time till he receives the next assignment, where having such future work is not even guaranteed.

Recently, my client’s employer tried to argue that because my client was expected to receive a new work project within a few months, they did not have to pay him his outstanding, accrued vacation time which accumulated to nearly 500 hours. The employee was out of work for several months, and there was no real assurance that the employer was going to put him on a new project.

At the labor board hearing in San Francisco, the commissioner was persuaded by my argument that under the California Supreme Court ruling in Smith v. Superior Court 39 C4th 77 (2006), “discharge” includes not only termination from ongoing employment relationship, but also release of an employee upon completion of a specified job assignment or time duration for which the employee was hired. In Smith the court determined that a fashion model, who was hired for one-day assignment, had to be paid at the end of that day.

There are a few exceptions to the above rule, the most notable of which is the fact that employees of temporary agencies who are placed to work as temps at a company, do not have to be paid immediately upon completion of assignment, because the very nature of working for a temp agency entails an agreement with such an agency to be paid as per the agency’s payroll periods.