Question 1

What must California employers pay when they terminate you?

Accepted Answer

California employers must pay: (1) all wages earned through termination date, (2) accrued but unused vacation (vacation is considered earned wages), (3) accrued PTO if the policy allows, (4) unused sick leave (depends on policy, but increasingly required), (5) final paycheck IMMEDIATELY (same day if possible, or within 72 hours). This is mandatory; employers cannot withhold.

Question 2

What about vacation payout? Must California companies pay unused vacation?

Accepted Answer

Yes. California treats vacation as earned wages. If you earn 3 weeks/year and have 2 weeks accrued, you MUST be paid for those 2 weeks upon termination. This is non-negotiable. The only exception: if you have a "use-it-or-lose-it" policy that was set up properly (which is rare in California and heavily litigated). Most California employees get full vacation payout.

Question 3

What is the WARN Act and does it apply in California?

Accepted Answer

The federal WARN (Worker Adjustment and Retraining Notification) Act requires employers with 100+ employees to give 60 days notice before mass layoffs affecting 50+ employees. California has a similar state law (WARN Act). If your company is laying off multiple people without 60 days notice, they may violate WARN. You can file a claim and get paid for the 60 days even if they terminated you sooner.

Question 4

Is severance package mandatory in California?

Accepted Answer

No. Severance is not mandatory in California (except in specific union contracts or legal settlements). However, when an employer OFFERS severance, they must: (1) give you adequate time to review, (2) allow negotiation, (3) not require waiver of illegal termination claims. If they offer severance, they're essentially saying "we want to avoid a lawsuit" — this gives you negotiating power.

Question 5

What can I negotiate in a California severance agreement?

Accepted Answer

You can negotiate: (1) severance amount (more weeks of pay), (2) health insurance continuation, (3) reference language, (4) equity acceleration, (5) non-disparagement removal, (6) release scope (waive what?). Start with: "I appreciate this. Can we discuss X?" California employers often expect negotiation. Get everything in writing before signing.

Severance Laws in California: What Employers Must Pay

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Severance & Termination Laws in California — Frequently Asked Questions

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