Being a small business owner means that it’s possible, if you need the help and can afford it, you’ll hire an employee. And having employees means having to understand employment laws and needing to know how to operate legally within them.
Unfortunately, from time-to-time, those employees you hire might not work out how you’d hoped. In that case, you’ll have to deal with getting your employees their last paycheck. In this article
Can you withhold a last paycheck?
Whether your employee quits or you let them go, you absolutely must give them their last paycheck. According to my research, it is not legal for an employer to withhold an employee’s last paycheck.
This paycheck will have to contain the wages owed to them, plus things like outstanding vacation time, bonuses and even, where applicable, commissions.
The only exception to this rule that I could find is in special cases where an employee owes the business money. For example, if you have an advanced salary agreement (which, for the record, does need to be signed in a legal document) that hasn’t yet been paid back.
Other than that though, you cannot withhold a last paycheck. Nor can you put any additional conditions on them getting it.
How soon do you have to get an employee’s last paycheck to them?
In addition to not being able to withhold a last paycheck, you also have to adhere to certain rules about how fast that pay needs to be handed over.
The rules surrounding when an employee’s last paycheck has to get to them varies state-by-state. But they all require you to get the paycheck to them eventually because you simply cannot withhold it.
States like Connecticut, Colorado and Deleware require you to get the last paycheck to your former employee by the next working day. Whereas states like Idaho, Kentucky and Louisiana have longer time periods like 10, 14 and 15 days, respectively.
Then there are states like Florida and Georgia have no set date for getting a final paycheck to an employee. And South Carolina has specific but open laws, stating that you need to get the cheque to the employee “within 48 hours or next payday, not exceeding 30 days.”
If you want to check the rules in your state, Patriot Software has a really handy guide to help you out!
Having trouble dealing with a last paycheck situation?
Fortunately, I am not a lawyer—so while I can research and write an article on a particular situation, I can’t actually help you solve it.
If you’re having trouble dealing with a last paycheck situation or you’re unsure of whether you can withhold a last paycheck in a certain situation, this would be a great time to connect with an employment lawyer in your state.
Because the laws differ state by state, you’ll need to talk to one that’s an expert in your jurisdiction. That way you can ensure you’re not unintentionally (or intentionally) violating any laws!
Have you ever been in a situation where you had to withhold a last paycheck? Share your situation in the comments below (but no personal details please!).
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