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.
Author: Rena Pirsos, JD, Legal Editor
Updated to include information regarding the forthcoming Small Business Retirement Marketplace.
Updated to include a forthcoming law regarding payout of accrued paid sick leave on termination.
Updated to include the forthcoming Maryland Small Business Retirement Savings Program.
Updated to include the forthcoming Connecticut Retirement Security Program.
Updated to remove the requirement to provide St. Louis minimum wage notices, which is preempted by state law, effective August 28, 2017.
Updated to include a law prohibiting certain deductions from the pay of temporary employees, effective September 1, 2017.
Updated to include forthcoming premium pay requirements under the Oregon scheduling law.
HR guidance on state laws on the timing of final paychecks for terminating employees.