When an employee leaves his or her position for any reason, the issue of the final paycheck must be addressed. Vacation pay, sick leave and other benefits must be determined, as well as a final tally of hours worked for hourly employees. Most employers prefer to give themselves a bit of time to work through these issues and ensure that the final paycheck is accurate and complete. This is understandable, and many employees do not question the procedure so long as the final paycheck arrives in what they believe to be a timely manner. However, most states have laws that specify how long employers have to generate that final paycheck.

Voluntary Termination vs. Firing vs. Layoff

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Many states have differing requirements regarding the last paycheck, depending on the circumstances of the employee’s departure. For example, in Nevada an employee who is fired must receive his or her last paycheck immediately, while one who quits may be paid on the next regular payday or within seven days, whichever is earlier. In Wisconsin, an employee who quits must be paid on the next payday. If the employee is fired, the final paycheck must come on the next payday or within one month, whichever is earlier. However, if the employee was terminated due to merger, liquidation or relocation of the business, he or she must be paid within 24 hours.

Giving Notice

Some states also differentiate between employees who give notice and those who do not. For example, an employee in West Virginia who gives one pay period’s notice must be paid immediately, while one who does not may be paid on the next regular payday. In Oregon, if the employee provides 48 hours notice, he must be paid immediately. If not, then he is paid on the next regular payday or within five days, whichever is earlier.

Special Provisions

Several states have special provisions that may affect the date that an employee must receive his or her last paycheck. Demand conditions are fairly common, which give the employer a certain number of days after the employee makes a written request for payment. Some states also allow employers to set written policies that extend the normal time that they have to make payment.

South Dakota adds a return of property clause. In that state, the time limit for payment does not go into effect until the employee returns all of the employer’s property. Indiana includes a forwarding address clause, in which an employee who quits without leaving a forwarding address may not receive his last paycheck until ten days after providing such an address.

Several states explicitly delineate when payment shall be made if the company has no regular payday. For example, in Massachusetts, if there is no scheduled payday, the employee will be paid no later than the Saturday following his resignation.

Most employers and employees are able to come to an agreement regarding payment of the last paycheck. However, when hostile or uncomfortable conditions exist, it is often best to turn to the law to determine the rights and responsibilities of both sides. Should the matter go to court, the employer may be required to pay penalties and interest as well as any costs incurred by an employee to recover the paycheck. Since state laws vary so widely, it is important to consult an employment attorney in the relevant state for guidance.