Upon termination, which wages must be included in the final pay?

Upon termination, which wages must be included in the final pay?

• A. Only base wages from the last pay period
• B. Any reimbursements owed
• C. All unpaid wages, including accrued and unused vacation and paid time off
• D. Final paycheck after standard deductions

Answer: (C)

California law treats accrued vacation and other paid time off as wages. When an employee is terminated, the final paycheck must include all earned and unpaid wages, which means time already worked plus any accrued but unused vacation or PTO. These amounts are compensation the employee has earned and cannot be forfeited, so they must be paid out at termination. Reimbursements for business expenses are a separate obligation and aren’t counted as wages in the final check, though they should be paid if owed under the company’s policy. In short, the final pay should reflect every earned wage due at separation, including accrued and unused PTO.

California law treats accrued vacation and other paid time off as wages. When an employee is terminated, the final paycheck must include all earned and unpaid wages, which means time already worked plus any accrued but unused vacation or PTO. These amounts are compensation the employee has earned and cannot be forfeited, so they must be paid out at termination. Reimbursements for business expenses are a separate obligation and aren’t counted as wages in the final check, though they should be paid if owed under the company’s policy. In short, the final pay should reflect every earned wage due at separation, including accrued and unused PTO.