Terminating an Employee in California: Doing It Right

Either the employer or the employee can generally end the relationship at any time, for any lawful reason or no reason. What you cannot do is terminate for an unlawful reason — discrimination or retaliation under FEHA (Gov. Code §12940), whistleblower retaliation (Labor Code §1102.5), taking protected leave, or reporting a safety or wage violation. Those exceptions are where most wrongful-termination claims live.

• Involuntary termination: all final wages are due immediately, at the time and place of termination.
• Employee quits: final wages are due within 72 hours — or immediately if they gave at least 72 hours' notice.
• Final pay must include all accrued, unused vacation/PTO, which California treats as earned wages.
• Paying late triggers waiting-time penalties of up to 30 days' wages (Labor Code §203).

• The final itemized wage statement;
• The EDD Notice to Employee as to Change in Relationship and the “For Your Benefit” (DE 2320) pamphlet;
• COBRA / Cal-COBRA continuation-of-coverage notices, and the HIPP notice;
• Any 401(k)/benefit-continuation information.

The best protection is a clean record: contemporaneous performance documentation, policies applied consistently across employees, and a neutral, respectful process. Bring in employment counsel before high-risk separations — where the employee is in a protected class, recently complained or took leave, is an executive, or where litigation seems likely.