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Employees Who Retire “Quit” Their Job and are Entitled to Prompt Payment of Final Wages

California employers – public and private – must promptly pay all earned and unpaid wages (i.e., “final wages”) to employees who are discharged or quit.  When employers fire an employee, they must pay the final wages at the time the employee is fired.  When an employee quits, final wages are due immediately when the employee provides 72 hours prior notice, or within 72 hours after a quit without notice.  But what about employees who retire?  A recent Supreme Court decision determined that those employees “quit,” and are entitled to final wages on the same timeline as other quitting employees.

In McLean v. State (Cal. 2016) 1 Cal.5th 615, McLean retired from her employment with the State of California and did not receive her final wages on the day of her retirement or 72 hours later.  She sued on behalf of herself and a class of former State of California employees who retired and did not receive final wages within 72 hours of their retirement.  The trial court determined that Mclean retired, but did not “quit,” and dismissed the claim.  The court of appeals reversed, determining that prompt payment of final wages applied because McLean “quit[] to retire.”  The Supreme Court agreed with the court of appeal, and affirmed its determination on the issue because a retiring employee stops, ceases, or leaves employment just like other employees who “quit.”

As is now clear, final wages are available to employees who are voluntarily or involuntarily separated from employment, whether they leave because of a discharge, quit or retirement. Just as the obligation to promptly pay final wages applies to employees who retire, so does the penalty for failure to promptly pay final wages.  The penalty is that the employee’s wages will continue until the final wages are paid, up to a maximum of 30 calendar days. So, coordinate with payroll and make sure departing employees are paid on time.


VLOG: Transgender Employee Bathroom Access Rights in California

Check out our latest Video Blog on Transgender Employee Bathroom Access Rights in California.


Transgender Employee Bathroom Access Rights in California

Most employers know (or should know) that discrimination against transgender employees is prohibited in California.  However, many employers are confused about the legal rights transgender employees have and how to protect those rights.  Of particular focus in recent months is restroom access for transgender and gender non-conforming employees.  Employers are facing this issue with increasing frequency.  To guide employers through navigating employee restroom access, several state and federal agencies have issued guidance designed to answer many of the questions they currently face.

U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”) Guidance

OSHA’s guidance indicates that employers should allow employees to use restrooms that correspond with their gender identity.  All employees, including transgender employees, should determine the appropriate restroom facility for themselves, and should not be required to use segregated facilities (e.g., single-occupancy or unisex facilities).

U.S. Equal Employment Opportunity Commission (“EEOC”) Fact Sheet

The fact sheet provides that transgender employees are entitled to Title VII protections, and that denying employees equal access to a common restroom corresponding to the employee’s gender identity constitutes sex discrimination under the Civil Rights Act of 1964.  Accordingly, the EEOC cautions employers to make sure they provide transgender workers access to a bathroom that corresponds to their gender identity.

California Department of Fair Employment and Housing (“DFEH”) Guidelines

The DFEH Guidelines instruct employers to provide transgender workers the right to use a restroom or locker room that corresponds to their gender identity and without regard for the workers’ assigned sex at birth.  Because there is not a particular medical or legal event required for an employee to be transgender, employers may not require transgender employees to show any “proof” to be appropriately accommodated.  The DFEH recommends that employers also consider providing single-occupancy restrooms that may be used by employees.  However, employers choosing to do so must make clear that use of such restrooms is voluntary.

AB 1732

AB 1732 is on the horizon.  This bill will require that all businesses and public buildings label their single-occupancy restrooms “all gender.”  The California Assembly approved the bill on May 9, 2016 and it is now before the Senate.  If passed, which seems likely, the bill will take effect on March 1, 2017.

The law in this area is continuously developing.  California employers should be aware of the legal protections afforded to transgender and gender non-conforming employees, and:

  • Allow employees access to restrooms consistent with their gender identity.
  • If possible, a gender-neutral, single-occupancy restroom might be considered for voluntary use by employees, including transgender employees and coworkers who may be uncomfortable with a transgender employee’s use of a multiple-occupant restroom.
  • Use employee-preferred names and pronouns for employees, and enforce this usage among other employees.
  • Revise nondiscrimination and anti-harassment policies to include gender identity and gender expression, and consider transgender employment policies.
  • Where necessary, reexamine and revise gender-based dress codes.

Be aware of changes in local, state and federal laws protecting gender identity, gender expression, and transgender employees.