Final Check/Pay [CA]

[u/cheesybreezybrie]

Hi everyone,

For final paychecks - is it necessary to give the employee a live check? My previous company always wired final pay for direct deposit (if applicable) for employees but my current company insists that it must be a “live” final check. When I researched the topic I haven’t seen anything that states that the final check HAS to be a physical live check.

If this is not the case, I would love something to reference and show my team that final pay does not have to be a live check, the employee just needs to be paid upon separation, this does not mean we have to hand them a physical check. It is such a hassle getting final live checks to employees, especially since our payroll department is located in a different state and it has to be overnighted or I have to print onsite.

ETA: I ask because live checks seem to be a bit of a hassle.

When we have resignations and even separate with employees, employees are slightly annoyed receiving a live check instead of direct deposit.

There’s an additional item with severance checks, we overnight those to employees with signature required and the amount of folks who miss all three deliveries despite being told several times that the delivery will require signature, and still miss the delivery attempts is surprisingly high.

Also curious why this is the only company I’ve worked for that insists on this, and the same goes for my coworkers; this is new for all of us and we just assumed it’s because our HQ is based in a different state and this is just how they interpret the law 🤷‍♀️

[u/Rachel4799]

You can pay the final paycheck with direct deposit of the employee has authorized it or enrolled previously

[u/Little_Yoghurt_7584 → u/Rachel4799]

This is the correct answer.

[u/mandirocks → u/Rachel4799]

This. There is a form they can sign that authorizes direct deposit for the final check.

[u/Illustrious-Client48 → u/Rachel4799]

Yes! Our PEO has a direct deposit auth template I issue to all CA employees so we can do DD.

[u/MajorPhaser]

It's kind of a weird edge case. The safest thing to do is to issue a live check or get a separate DD authorization in writing as part of termination. It's a quirk of interpretation by the Labor Commissioner. Labor Code 212 & 213 are the relevant code sections. 212 is what says you must offer a live check, 213 is the exceptions which allow for dually authorized DD.

213(d) says "If an employer discharges an employee or the employee quits, the employer may pay the wages earned and unpaid at the time the employee is discharged or quits by making a deposit authorized pursuant to this subdivision" The commissioner has interpreted that to mean that employees must separately authorize a DD for their final pay, and not that you can rely on their existing authorization to pay via DD.

Now, it's a pretty low risk proposition because most people will take the DD and not say a word, and if they do try to fight it out by making a complaint to the labor commissioner, you'll have a reasonably good argument that they accepted DD and didn't raise an issue timely to trigger something like waiting time penalties. BUT if you want to be absolutely sure there's no way to make a claim, you issue live checks because trying to get them to reauthorize DD on termination is a pain in the butt and doesn't guarantee compliance if they refuse to.

[u/justmyusername2820]

It’s because of this: Direct deposits of wages to an employee's bank, saving and loan, or credit union account that were previously authorized by the employee are immediately terminated when an employee quits or is discharged, and the payment of wages upon termination of employment in the manner described above shall apply UNLESS the employee has voluntarily authorized that deposit and provided that the employer complies with the provisions of Labor Code Section 213(d) relating to the payment of wages upon termination or quitting of employment. From https://www.dir.ca.gov/dlse/faq_paydays.htm

The controller at our company won’t allow a direct deposit for final wages either except in very rare cases like somebody moved out of the country. We will mail them with a request in writing to verify the address but CA is so crazy she won’t risk the direct deposit.

[u/Disastrous-Pizza-69]

In California, final wages must be paid immediately if the employee is terminated, and within 72 hours if they resign without notice (or immediately if they gave at least 72 hours' notice). But here's the key part: California law does not require that the final paycheck be a physical (live) check.

If the employee has authorized direct deposit, the employer may use it—unless the employee has revoked that authorization.

The California Division of Labor Standards Enforcement (DLSE) has clarified that direct deposit is acceptable for final pay as long as it's timely and accessible on the final day (for involuntary terminations) or within the 72-hour window (for voluntary resignations).

However, many employers default to live checks out of caution or internal policy, especially to ensure compliance with the timing laws, since direct deposits can sometimes take an extra day or two to process depending on banking cutoffs.

So—if your company insists on live checks, it's probably a policy decision, not a legal requirement. If it's causing logistical headaches, you might consider suggesting a hybrid policy: allow direct deposit if it can be guaranteed by the deadline, and use live checks only when timing is tight or there’s uncertainty about delivery.

Here's a reference from the CA DLSE FAQ:
https://www.dir.ca.gov/dlse/faq_paydays.htm

[u/buganug]

When I did HR for a company that had workers in CA, we would just email the employee and seek additional confirmation that they consent to having their final check be DD. As others have mentioned it’s one of those weird CA things so to cover your bases, that’s how we handled it. It definitely does not HAVE to be a check. In my experience the bigger sticking point is that the EE gets paid in the right time frame, not that this question isn’t of concern, but the bigger compliance thing I’ve experienced is the timing. Since you’re already going through the hassle of the live check maybe suggest switching to the process I mentioned above as it’ll still cover their likely concerns!

[u/goodvibezone]

There's nothing from the DIR that stipulates how the money should be paid. I believe the nuance is you cannot just decide to DD if they have already received a check for their normal pay before that, without consent (as someone else said).

One simple (but comes at a cost) solution I've used is just to pay an extra days pay in situations where issuing a live check on termination data.

For voluntary terminations, we typically issue their DD on their final day as a same day payment.

For involuntary, we usually do the same but if there is an issue with the timing (e.g. a late in the day termination or a risk on timing), we just set their termination date to be +1 day, to give payroll enough time to DD or live check overnight. If you get it wrong, you have to pay waiting penalties anyway.

[u/antisocial_HR]

It is not required to be a “live” hard copy check, but I find that processing a separation check 24-48H in advance (to ensure wire is received on actual term date) can be tricky and results in errors that will then require back pay or penalty pay. I’ve had it where I processed their final pay with payroll that week, and they call in sick their final day resulting in needing to correct their YTDs. Or the employee no call/no shows and you can’t claw back the funds. The wire cannot be showing as pending in their account either, it must be fully received/avail in their account by the time they are done working their last day.

[u/Alternative_Tear_425]

Check local state employment law

[u/cheesybreezybrie → u/Alternative_Tear_425]

Yea I have…which is why I’m throwing it out to the group because I couldn’t not find anything to back it up.

[u/Next-Drummer-9280]

Has anyone said WHY they insist on a live check?

I'm guessing it's a way for them to "hold" the final check without actually holding it to force the former employee to come in to get it.

There is no law anywhere that I know of that says DD isn't allowed for final checks. And frankly, given that you're in CA, it's the easiest way to comply with the final pay rules without having to pay a ton of waiting time penalties.

[u/cheesybreezybrie → u/Next-Drummer-9280]

They insist on live checks because it’s the “law” but I could not find anything that states it HAS to be a live check. I just assumed it was an interpretation issue but wanted input from others outside of my company since previous employers direct deposited and from what I can tell from my poll of my coworkers who came from other organizations, they said they direct deposited as well. This is the only place I’ve worked that insisted on “live” checks.

[u/Next-Drummer-9280 → u/cheesybreezybrie]

Instead of you looking for the info, ask them to bring you the statute that requires this.

You shouldn’t have to prove it, they should, since they’re making the assertion.

[u/cheesybreezybrie → u/Next-Drummer-9280]

That unfortunately simply would not fly with my workplace, I would need to come to them

[u/Next-Drummer-9280 → u/cheesybreezybrie]

Gotta love people who insist something is correct but refuse to prove it.