Pay an Employee's Final Wages

Key Points

  • State law governs when an employer must pay final wages to an employee who separates from employment, either voluntarily or involuntarily, and the civil and criminal penalties for failure to comply.
  • Most state laws require an employer to pay final wages at the time of separation or termination, or within a specific period of time after the event.
  • In many states, the timing rules differ depending on whether the separation is voluntary or involuntary. Additional special rules may apply to employers in certain industries and for temporary layoffs, lockouts and strikes.
  • While some states' laws have specific provisions regarding payment of unused, accrued vacation time on separation or termination, other states' laws make it dependent upon the terms of an employer's policy or handbook, an employment contract or a collective bargaining agreement, if any.

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