Upon Termination, When Should Final Wages Be Paid to an Employee?

By Grace Ferguson

The United States Department of Labor, which administrates federal labor laws, does not require employers to give employees their final paycheck immediately upon separation. The state labor department, which enforces state labor laws, generally has regulations regarding when an employee's last paycheck is due.

Amount

If the employee is paid hourly, the employer pays all work hours performed during the pay period at her final regular pay rate, and if applicable, overtime rate. Salaried employees generally receive their full salary each pay period, regardless of the number of days worked, except for weeks in which they perform no work. The employer does not have to pay a terminated salaried employee her entire salary if she did not work the entire week. In this case, it pays her for the actual number of days worked during the pay period.

Time Frame

The time frame in which a final paycheck is due depends on state law. The employer should check with its state labor department for its requirements to ensure compliance. The state of Colorado, for example, has various conditions for final paychecks. If the employer terminated the employee, it pays wages due immediately upon termination, except if the payroll department is not in operation. In this case, wages are due within six hours after the payroll department's next regular workday. If the payroll unit is off-site, the employer pays wages due within 24 hours of the department's next regular workday. The employer can give the employee his final paycheck at the work site, its local office, or via mail to the employee's last-known address. If the employee terminated his employment, final wages are due by the next regular payday.

Employee Benefits

Employee benefits, such as vacation and personal time are a matter between the employer and the employee -- the employer gives it only if it wants to. The employer should check its state law for regulations on paying out employee benefits upon termination. The state of Texas, for example, requires employers to develop clear and written policies regarding paid leave and to follow it precisely. If the policy does not state what happens to unused vacation time, Texas Payday Law does not require the employer to pay out accrued time to terminated employees. The state of California requires employers to include the terminated employee's unused vacation time in her paycheck.

Considerations

The employee can file a wage claim with the state labor department or the U.S. Department of Labor, Wage and Hour Division, if he does not receive his final paycheck within the specified time frame.

About the Author

Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media.

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