Overview: State laws and regulations govern when employers must provide terminated employees with their final paycheck. Employers should stay abreast of the termination pay laws in the states where they pay employees because there are serious civil and criminal penalties for failure to comply.
Most state laws require final paychecks to be issued at the time of termination, within a certain number of days after termination, or at least by the next regular payday. In many states the timing rules differ for voluntary terminations and involuntary terminations. Additional special rules may apply to employers in certain industries and for temporary layoffs, lockouts and strikes.
Some state laws also have specific provisions regarding payment of unused accrued vacation time on termination. In other states, however, it depends on the terms of the particular employer's policy, handbook, employment contract or collective bargaining agreement, if any.
Rena Pirsos, JD, Legal Editor
In-depth review of the spectrum of Minnesota employment law requirements HR must follow with respect to payment of wages.
In-depth review of the spectrum of North Dakota employment law requirements HR must follow in respect to payment of wages.
Effective July 1, 2013, the value of accrued vacation leave is excluded from the definition of "wages" upon termination under certain circumstances.
In-depth review of the spectrum of Wyoming employment law requirements HR must follow in respect to payment of wages.
Given the consistent increase in the number of retaliation claims brought by employees, employers may be left wondering what they can do to reduce or prevent retaliation claims. There are many tools at the employer's disposal to properly handle complaints of unethical, wasteful or illegal practices in the workplace and many steps employers can take to identify problematic employees before they proceed with retaliation claims.
Employees may be paid in cash or its equivalent, such as a check, by direct deposit or with electronic paycards, and employers must be sure to comply with both the federal Fair Labor Standards Act and applicable state laws when paying employees. This section assists HR professionals in evaluating the many variables that must be considered when deciding which method to use to pay employees.
An employer may use this policy to convey the purpose for and importance of conducting exit interviews with employees departing the organization. Given that employers may collect valuable, candid information regarding employment practices from outgoing employees and may also identify post-termination risks such as lawsuits, employers are strongly encouraged to conduct exit interviews with all willing, outgoing employees. This policy can be used to put current employees on notice of the employer's intention to conduct such interviews and what the employer intends to do with the information it gathers.
In-depth review of the spectrum of California employment law requirements HR must follow with respect to payment of wages.
In-depth review of the spectrum of New Jersey employment law requirements HR must follow with respect to process of termination.
HR guidance on state laws on the timing of final paychecks for terminating employees.
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