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 the Wage Theft Transparency Act, effective April 13, 2017.
Updated to reflect a forthcoming change in pay frequency for service employees.
XpertHR's innovative Liveflo Tool now includes a workflow to help an employer properly pay final wages to an employee whose employment has ended, either in accordance with or in the absence of a state final pay law.
Use this workflow to determine how to properly pay final wages to an employee whose employment has ended, either in accordance with or in the absence of a state final pay law.
Updated to include a new St. Louis minimum wage notice requirement, effective February 28, 2017.
Updated to include expanded unclaimed wages requirements, effective February 2, 2017.
Updated to include forthcoming final paycard regulations issued by the Consumer Financial Protection Bureau.
HR guidance on state laws on the timing of final paychecks for terminating employees.