Federal Labor Laws on Employers Holding Paychecks

Employers cannot withhold your paycheck.
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The Fair Labor Standards Act determines when an employer must issue a paycheck to its employees. The Fair Labor Standards Act also sets a national minimum wage, creates overtime requirements and exceptions and determines when and if payment can be withheld from an employee. Federal labor laws are codified by the Fair Labor Standards Act of 1938 and administered by the United States Department of Labor.

Holding Final Paychecks

Under the Fair Labor Standards Act, employers are not required to issue a final paycheck to an employee immediately upon termination or resignation. Through federal labor law, employers are required to give an employee his final wages by the next pay period. However, some states expressly prohibit an employer from withholding a final paycheck and require final wages to be paid sooner. For example, in California employers are required by state law to provide a final paycheck immediately.

Read More: Law Regarding Shorting Paychecks

Withholdings & Deductions

Under the Fair Labor Standards Act, employers are permitted to deduct or withhold reasonable costs from an employe's paycheck. For example, employers can subtract the reasonable costs of meals, lodging and other expenditures an employee has paid to an employee. These expenses are treated as "payments in kind" under most state laws.

Other Withholding Issues

When and how often an employer is obligated to pay employees varies from state to state. For example, Texas labor law requires employers pay their employees at least bi-monthly and in recurring intervals such as every two weeks. Regardless of how often state law employers are obligated to pay, it is unlawful in all states for an employer to withhold an employee's paycheck for any reason, according to federal and state laws.