California Resignation Laws

Resignation laws are an essential component of employment regulations in California. Employers need to understand these laws to maintain legal compliance, uphold their reputation, and smoothly handle employee transitions.

By being well-versed in these regulations, employers can avoid potential legal issues and ensure fair treatment of employees. Additionally, a good grasp of resignation laws helps employers foster a professional work environment and maintain stability during periods of change.

This Article Covers:

Key Resignation Laws in California

In California, handling resignations can involve several regulations that may differ based on employer policies. These regulations include:

  • At-Will Employment – In California, employees or employers can terminate employment at will without fear of penalty. If an employee believes they have been terminated, harassed, or discriminated against based on race, religion, gender, color, national origin, ancestry, disability, medical condition, marital status, age (over 40), sexual orientation, or denial of family medical leave, they should contact the Department of Fair Employment and Housing at 1-800-884-1684 or visit www.dfeh.ca.gov.
  • Collective Bargaining Agreement – In California, a collective bargaining agreement (union contract) can govern employment. In such cases, the union contract’s terms and conditions apply, rather than the general at-will employment rules. The Division of Labor Standards Enforcement (DLSE), which typically oversees employment issues, does not have authority over disputes arising under these union contracts.
  • Local Law Enforcement – If an employee feels assaulted, threatened, or in danger, they should contact their local law enforcement office. Other forms of harassment usually require filing a lawsuit in civil court.
  • Retaliation Complaints – The Division of Labor Standards Enforcement (DLSE) has jurisdiction over cases where an employee has been retaliated against for participating in a protected activity. For a list of protected activities, including filing a complaint, jury duty participation, and complaining about safety, contact the DLSE.
  • Final Pay – In California, the final paycheck is the concluding payment an employee receives following the end of their employment. This payment, also known as the last paycheck, encompasses all remaining wages owed to the employee.
  • Unused Vacation Days– After quitting, employees in California are entitled to receive unused vacation payouts in the employee’s final paycheck unless otherwise stipulated by a collective bargaining agreement.
  • Forced Resignation – Employers may cause forced resignations by creating a hostile work environment or pressuring employees to resign. This scenario, known as constructive discharge, is considered illegal if it results from discrimination or retaliation.

The Resignation Process in California (Notices, Resignation Letters, Final Pay, and Offboarding)

In California, employees must provide written notice to their supervisor before their resignation takes effect.

The employee is also responsible for completing and submitting all required separation documents.

What should a resignation letter in California contain?

Resignation letters in California should typically include the reason for resignation and a forwarding address.

The reason provided can affect future re-employment opportunities and determine eligibility for unemployment benefits.

If space is limited, employees should briefly summarize the reason. Employers will use the forwarding address to send important documents related to any owed pay or compensation.

A well-constructed resignation letter should also state the effective date of separation and include the employee’s signature and the date of signing. However, this format is not mandatory.

How much notice should California employees serve after resigning?

California law does not require employees to give a notice period unless it is explicitly stated in their employment contract. If such an agreement is in place, employees must adhere to the terms specified.

Notice periods can vary depending on company policies in California. However, it is generally expected that employees provide at least two weeks’ notice before resigning.

When should the final paycheck be issued to California employees?

California employees must receive their final paychecks within 72 hours if they quit without giving prior notice. If they provide at least 72 hours’ notice, employers must pay them at the time of quitting. 

The employer should make the final payment at their office in the county where the employee worked. 

If an employee quits without giving 72 hours’ notice and requests their final wages to be mailed, consider the mailing date as the payment date.

What are the penalties for non-payment of final paycheck to California employees?

California employers can face penalties if they willfully fail to pay the final paycheck to an employee immediately or within 72 hours of quitting (depending on the prior notice). 

These penalties are calculated by multiplying the employee’s daily wage rate by 30 days.

However, the employer can avoid the penalty if they prove that there is a “good-faith” dispute about whether any wages were owed by the employee.

A “good-faith” dispute means that the employer’s legal or factual defense, if successful, would prevent the employee from recovering the disputed wages.

Even if there is a dispute about some of the wages owed, the employer must still pay the part of the wages that is not in dispute.

If the employer fails to pay the undisputed wages, they lose the “good faith” defense, regardless of the outcome of the disputed wages.

In cases of non-payment of the final paycheck, California employees can contact the Department of Labor’s Wage and Hour Division or the California Department of Industrial Relations.

How do you offboard California employees who resigned?

In California, Employee offboarding, or exit management is just as crucial as the onboarding in California process. It ensures a smooth and professional transition, benefiting both the company and the departing employee.

Once the employee completes and submits the separation documents, the employee resource liaison forwards those separation documents to the personnel specialist. 

Employee resource liaison also provides information to the employee regarding their reinstatement rights and initiates a separation alert in the Activity Based Management System (ABMS).

The supervisor ensures the employee’s voicemail informs callers about their separation. It should also provide a referral for assistance in the employee’s absence.

The supervisor also ensures that the employee’s computer accounts are terminated.

Lastly, the personnel specialist ensures that the final paycheck is issued within 72 hours of the employee’s effective date of separation.

Accepting and Withdrawing Resignations in California

Accepting resignations in California requires employees to submit their resignations in writing to their supervisors.

Employees must complete and submit the separation documents provided by the employee resource liaison. These required documents include the Employee Action Request (EAR), COBRA forms, and the Employee Separation Clearance Checklist.

Can employees withdraw resignations in California?

According to federal laws, employees in California can withdraw their resignation before the effective date of separation. 

Employers may reject the withdrawal request if there is a valid reason, such as administrative disruption or having hired or committed to hire a replacement.

Employers are required to provide an explanation to the employee for rejecting the withdrawal request. However, avoiding disciplinary actions is not considered a valid reason.

Can employers reject resignations in California?

California adheres to “at-will” employment, allowing employees to resign at any time. Therefore, employers must accept the resignations submitted by employees.

Severance Pay for California employees

Employers can generally provide severance pay to California employees when the employer terminates their employment. Employers often calculate severance pay based on the employee’s tenure.

California law does not require employers to provide severance pay; instead, it is established through an agreement between the employer and the employee (or their representative). Employees should consult their employer’s policy on severance pay.

Federal law governs severance pay plans provided by an employer under the Employee Retirement Income Security Act of 1974 (ERISA).

In some specific cases, California laws might also apply, but a detailed review of the situation is needed to determine this. Employees can contact the U.S. Department of Labor for more information on severance pay.

Noncompetes Rule for California employees

California has strict laws that almost completely ban non-compete agreements except in the case of the sale or dissolution of a business.

This means that after leaving the company, employees are free to work for competitors or start similar businesses without restrictions from their former employer.

According to a recent Bloomberg article, California has passed two laws—Assembly Bill 1076 and Senate Bill 699—to reinforce its long-standing opposition to noncompetes. These laws reach far beyond state lines and impact any company with employees in California.

An employment agreement that includes a non-compete clause, which may be enforceable under the laws of another state, will become invalid if the employee relocates to California.

This ban also applies to existing employees currently bound by such agreements, effectively nullifying them.

Important Cautionary Note

When making this guide we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you to seek advice from qualified professionals before acting on any information provided in this guide. We do not accept any liability for any damages or risks incurred for the use of this guide.