What Should Employers Do When Payday Falls on a Weekend or a Holiday?
Navigating wage payment timing in California can be tricky—especially when a scheduled payday falls on a weekend or a holiday. For years, employers and employees have looked to the Division of Labor Standards Enforcement (DLSE) and court cases for practical guidance. Recent California appellate court authority brings much-needed clarity to this issue.
DLSE Guidance: Paying Wages When Payday Is a Weekend or Holiday
The DLSE’s interpretation has long provided that if a payday falls on a weekend or a holiday when the business is closed, wages may be paid on the next business day:
“If your regular designated payday falls on a holiday and your employer observes that holiday by closing its business, your employer may pay your wages on the next business day.”
— DIR FAQ on Paydays
This guidance is not limited to holidays—it is widely accepted as the standard for weekends too, as administrative offices and banks are typically closed. The Labor Commissioner’s website, however, is not the law and is not binding on the courts.
California’s Third District Court of Appeal recently settled the question for weekend paydays. In Parsons v. Estenson Logistics, LLC, 86 Cal. App. 5th 1260, 302 Cal.Rptr.3d 874 (2022), the court examined an employer’s practice of paying wages on the Monday following a Saturday payday. The plaintiff argued that the California Labor Code (section 204) required payment by seven calendar days after the pay period ended—even if that day was a Saturday. The employer contended that the deadline could be extended to Monday under Code of Civil Procedure section 12a, which extends statutory deadlines falling on weekends or holidays to the next business day.
The Court’s Decision:
The court concluded that when wages are due on a weekend or holiday, they may be paid on the next day that is not a weekend or holiday. This rule reduces the risk of penalties for employers and provides a clear, administrable standard. The California Supreme Court declined to revise the case, which means Parsons will probably remain unchallenged.
Practical Takeaways
- If a scheduled payday falls on a Saturday, Sunday, or holiday, and standard payroll operations cannot occur, California employers may safely issue paychecks on the next business day (e.g., the following Monday).
- Regular payroll deadlines still apply if payday falls on a business day; these rules only affect situations where the legal payday is a non-business day.
California employers should review their payroll practices to ensure they follow this standard. This will help avoid unnecessary wage claims and ensure compliance with state law.
Robert Nuddleman has been representing employees and employers in wage claims for decades. He had his first wage and hour trial as a Certified Law Student while still in law school. The Nuddleman Law Firm conducts formal trainings and seminars regarding wage and hour compliance and is a frequent presenter on such topics for local bar associations. If you have a question about payroll practices or employment laws, contact the Nuddleman Law Firm.