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California State University, Long BeachCalifornia State University, Long Beach

ADMINISTRATIVE GUIDELINE

Payment of Wages at Separation Guideline

PURPOSE AND SCOPE

Labor Code sections 201 and 202 require the CSU to pay separating employees in a specified timeframe. Payment of owed wages to discharged and resigned employees is treated differently in the Labor Code.

The purpose of this policy is to ensure the timely payment of employee wages at separation.

GUIDELINE STATEMENT

Separations – Discharge:

An employee who is discharged must be paid wages earned immediately. This includes cash out of benefits (e.g., leave time on the books) unless an employee submits a written request, at least five work days prior to his/her final day of employment, to defer all or a portion of accrued leave credits. The completion of a temporary assignment is not considered a discharge. “Discharge” separations may include the following CSU Separation Transaction Codes:

  • S30 – Layoff
  • S31 – Termination of Temporary Appointment1
  • S34 – Faculty Nonreappointment
  • S35 – Separation by Agency
  • S41 – Dismissal
  • S90 – Rejection During Probation/Non-Retention
  • S99 – Canceled Appointment Action

Separations – Resignation:

An employee who resigns (includes retirement) from employment must be paid wages earned no later than 72 hours from the date of separation.2 However, if the employee provides the employer at least 72 hours notice of his/her impending separation, he/she is entitled to owed wages at the time of separation. This includes the cash out of benefits (e.g., leave time on the books) unless an employee submits a written request, at least 5 work days prior to his/her final day of employment, to defer all or a portion of accrued leave credits. The 72 hours is a continuous period that includes weekends and holiday. For example, if an employee resigns without prior notice on a Friday at 5:00 p.m., the employer has until 5:00 p.m. the following Monday to pay owed wages. “Resignation” separations include the following CSU Separation Transaction Codes:

  • S10 – Resignation
  • S21 – Absent Without Official Leave
  • S70 – Service Retirement
  • S71 – Disability Retirement

Procedures have been established and responsibilities defined to comply with this legal requirement. This policy applies to all campus departments and employees of the California State University, Long Beach.

Please contact Beth Ryan at Human Resources Management or Jeanene Berumen at Payroll Services if you have any questions.

1 Separation code S31 is considered to be discharge when an employee’s appointment or assignment ends prior to the scheduled completion of the appointment or assignment (A52) transaction.

2 Separation code S31 is considered to be discharge when an employee’s appointment or assignment ends prior to the scheduled completion of the appointment or assignment (A52) transaction.

PROCEDURES

Discharge

Departments must work with either Staff Human Resources or Faculty Affairs when discharging an employee. Upon discharge, the employee MUST be provided with his/her final check.

When an employee is to be discharged, Staff Human Resources or Faculty Affairs notifies Payroll Services. Staff Human Resources or Faculty Affairs generates Personnel Transaction Form (PTF) which is given to HR Support Services/Payroll Services prior to date of discharge. A final timesheet is also required. Confidentiality is critical when discharging an employee.

Advance Notification – (72 hours or later)

In general, a final check/warrant for time worked can be generated through the State Controller’s Office pay system and presented to the employee by the specified administrator on the day of discharge if Payroll Services is notified within 72 hours of the date of employee’s dismissal. Pay for any outstanding vacation balance can be included in this final pay if the department is aware of the discharge in advance and can be contacted by Payroll Services.

If there is no pay cycle prior to the date of discharge, a salary advance can be requested by the payroll technician.

If accurate leave balances are not available due to limitations with contacting the department, Payroll Services will estimate vacation leave pay and include in final pay. (Note: If an employee has taken leave time after the prior month balances are posted, an overpayment can occur, leading to the establishment of an accounts receivable for a separated employee.)

For MPP employees, severance must be included with the employee’s final pay unless notified otherwise by Staff Human Resources or Faculty Affairs.

If an employee is not available to accept pay upon discharge, final pay will be mailed to the former employee’s mailing address once paperwork is received by Payroll Services from Staff Human Resources or Faculty Affairs. If the employee is on direct deposit and Payroll Services is aware the employee will not be present to accept his/her final check, final pay will issue as a direct deposit.

(Note: For employees with direct deposit and anticipated to be on campus at the time of discharge, the direct deposit is cancelled and a warrant is generated based on the guidelines above.)

No Advance Notification (less than 72 hours)

If time allows, a Request for University Check is generated estimating the employee’s final pay. A second pay check/warrant will be generated to pay out any vacation accrual and any adjustments necessary. Depending upon the circumstances, direct deposit can be maintained or cancelled when issuing final pay to the discharged employee.

Resignation (Does Not Include Appointment Expirations)

Staff Human Resources will notify HR Support Services/Payroll Services of a resignation upon receipt of a separation PTF.

Reminder: Resignations include retirements.

The payroll technician can contact the employee to determine the most appropriate way to provide final pay.

Advance Notification – 72 hours or more

Direct Deposit: With advance notice, final pay will be posted into the employee's bank account on the day the employee separates.

Warrant: If the employee requests a warrant or receives a warrant rather than direct deposit, Payroll Services MUST be notified at least 72 hours in advance of the date of separation to ensure the employee receives pay on the date of separation. Final pay must be presented to the employee on his/her last day of employment. Timing is important with warrants. If requested by the employee, the warrant can be mailed to the employee's mailing address. The warrant must be mailed no later than the date the employee separated.

The employee's final pay must include payout of all vacation leave balances unless approval to separate this pay is given by the employee. This can only be accomplished if the correct leave balances can be obtained from the department in time.

No Advance Notification (by employee) – Less than 72 hours

Without advance notification by the employee resigning, Payroll Services has 72 hours to process final pay and payout of any vacation leave balances. If the department was notified within 72 hours but was unable to notify Payroll Services immediately, Payroll Services will make every effort to generate pay as soon as possible.

Direct Deposit: Final pay will be posted into the employee's bank account within 72 hours of the employee's separation date.

Warrant: If the employee requests a warrant or receives warrants rather than direct deposit, final pay will be made within 72 hours of the employee's date of separation. The final pay check is mailed to the employee's mailing address unless instructed otherwise by the employee.

General Note

Pay cannot be generated unless a separation PTF is provided to Staff Human Resources for processing. It is important that departments contact Staff Human Resources immediately upon being notified of employee's resignation/retirement to ensure payment is processed timely. A final timesheet and employee's letter of resignation/retirement must also be submitted with the separation PTF. The employee must complete the Clearance Process as well.

ADDITIONAL CONTACTS

Subject Contact Phone Email
Guideline Contact Beth Ryan (562) 985-1741 Beth.Ryan@csulb.edu
Subject Matter Expert Nancy Torres (562) 985-2299 Nancy.Torres@csulb.edu
Subject Matter Expert Elizabeth Martin (562) 985-8114 Elizabeth.Martin@csulb.edu
Subject Matter Expert Jeanene Berumen (562) 985-4165 Jeanene.Berumen@csulb.edu

APPENDICES AND RELATED INFORMATION

Appendices (if any): N/A

Related Chancellor’s Office Policies:

Other Related Information:

FAQ

Payment of Wages at Separation – HR-2003-15 Attachment C: Q&A:

HISTORY

Issue Date: March 20, 2012

Last Review Date: N/A

Amended Date: N/A

Amended Description: N/A