Michael Jackson was given an extra 24 hours to pay staff on his closed Neverland Ranch overdue wages amounting to $306,000 and fines of $100,000.
The extension means the Thriller hitmaker now has until 5pm today to pay the penalty and outstanding wages, before facing possible court action.
State regulators made the threat after shutting down the 2,800-acre (1,130-hectare) estate last Thursday and fining the singer and his ranch operators after discovering his workers' compensation policy lapsed in January.
Employees also complained they hadn't received a pay packet since 19 December.
Renee Bacchini, a spokeswoman for the state Department of Industrial Relations, maintained Jackson was "aware" of the extension.
She revealed they had been generous with the deadline after the singer's financial representatives contacted the department.
Bacchini said: "They are trying to come up with the money. They're trying to work with us."
The singer has been living with his three children in Bahrain since July - one month after he was acquitted of all charges in his child molestation trial.