Definition of Wages by State
Author: Vicki M. Lambert, The Payroll Advisor
To properly pay wages to an employee, an employer needs to know exactly what that term means. The federal Fair Labor Standards Act does not provide a specific definition of the term, leaving the details up to the states. The vast majority of the state wage payment laws do define the term to varying degrees of detail. An employer must follow state law definitions of the term when paying employees.
The following chart provides the legal definitions of the term wages under the state wage payment laws (unless it is noted that the term is defined in another, related law). Some of the laws also include definitions of other, related terms. If a state wage payment law does not define the term but a definition is provided in guidance from the state's labor department, the chart includes the agency's definition.
This chart does not include:
- Definitions of wages under wage orders or other wage and hour laws (e.g., minimum wage, overtime, etc.), unless specifically noted;
- The definition of wages for federal income tax withholding purposes (i.e., I.R.C. § 3401(a); see Federal Income Tax Withholding Methods);
- Case law (i.e., court and administrative decisions) defining wages;
- Deductions that may or may not be made from an employee's wages (see Permitted and Prohibited Pay Deductions by State);
- Whether and how commissions, bonuses and other similar payments are considered earned and payable to an employee, unless those terms are part of the definition of wages or specifically noted otherwise;
- Whether a jurisdiction allows caps on vacation/paid time off accruals and/or use-it-or-lose-it policies that are mentioned in the definition of wages (see Vacation and Paid Time Off Benefits by State); or
- Whether, how and when final wages and accrued but unused vacation, leave or other fringe benefits must be paid when employment ends (see Final Wage Payment Requirements by State).