The proposed changes reinforce the immediacy of wage payments upon discharge and address how unused vacation or leave time is handled. Specifically, it permits employees to elect to contribute their unused or accumulated leave to a state-sponsored supplemental retirement plan, such as a 401(k), allowing for greater flexibility in managing their final wages. This amendment is particularly timely as it addresses the needs of employees who may be facing financial challenges due to immediate loss of income upon termination of employment.
Summary
Assembly Bill 1528, introduced by Assembly Member Santiago on February 19, 2021, focuses on the amending of Section 201 of the Labor Code concerning employment and the payment of wages. The bill aims to clarify the regulations surrounding final wage payments when an employee is discharged. Existing laws require immediate payment of wages earned and unpaid at the time of an employee's discharge, and the bill reinforces this requirement while making some nonsubstantive changes to ensure clarity and compliance.
Contention
While the bill appears largely beneficial for employees, potential areas of contention may arise concerning the stipulations related to how contributions to retirement plans are handled and what qualifies as unused or accumulated time. Concerns may be voiced by employers about the administrative burden of complying with these changes or ensuring adherence to the deadlines set forth in the law. The need for employees to submit their requests at least five workdays prior to their final day of employment may also introduce complexities in the form of missed deadlines which could lead to disputes.