|Apr 27 2017||
Final Paycheck Laws
By: Donna Kakadeles
DO YOU KNOW WHAT THE FINAL PAYCHECK LAWS ARE IN YOUR STATE?
You should make sure that you are ready to comply with the final paycheck laws that your state has in place whenever an employee leaves. There are often penalties for violating the final paycheck laws, and if a former employee sues, you could be required to pay for their attorney’s fees as well as court costs.
There are a number of states that require employers to give a departing employee his or her final paycheck in a rather short amount of time. In other states, the time limit depends on whether the employee voluntarily quit or was fired.
Some helpful guidelines to help you avoid penalties:
- Calculate what needs to be paid. This may include hours worked but not yet paid, accrued but unused vacation time, accrued but unused personal time, earned but unpaid commissions, earned but unpaid bonuses and possibly stocks. You should consult with your handbook for your company policy on any of the aforementioned – in particular payout for vacation and personal time.
- If the employee resigns, in some states their final pay may be processed with the next regular payroll. You should check with the Department of Labor in your state to confirm the timeframe.
- If the employee is terminated, they should be given their final pay on their way out the door – but not later than 24 hours beyond that.
- Do not use the final paycheck to collect monies owed to the company. You have rights but this is not the best place to settle those claims.
Parting may or may not be sweet sorrow, but separations can be stressful for everyone involved. Use checklists, plan ahead and lose the emotion. Make the tough decisions but execute the termination with professionalism and respect.
Since 1988, Total Team Solutions has been providing our clients with cost effective employee benefit, Payroll Services and Human Resource Guidance. If interested in learning how your company may benefit, please contact us at email@example.com
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