Did an employee leave your business? It’s time to whip out your employee termination checklist to see what you need to do. And one of the responsibilities on said checklist is giving terminated employees their final pay. But, how soon do you need to pay it out? Cue final paycheck laws by state.

Read on to learn about (and comply with) final paycheck laws. 

General rules for issuing termination pay

Regardless of whether you fire an employee or they quit, you must give them their last paycheck. 

The final paycheck should contain the employee’s regular wages from the most recent pay period, along with other types of compensation, such as accrued vacation, bonus, and commission pay.

You may be able to withhold money from the employee’s last paycheck if they owe your business and you have written authorization to do so. For example, an employee may still owe you money from a salary advance agreement. Be sure to check with your state before doing this.

You cannot withhold unpaid wages that the employee earned, even if you fired them. And, you cannot attach a condition of receipt to the final paycheck. 

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Although last paycheck laws vary by state, giving a terminated employee their final paycheck on their last day can simplify your responsibilities. That way, you don’t need to mail the paycheck or have the employee pick it up from your business at a later date.

Keep in mind that the employee’s final paycheck isn’t the same thing as severance pay. Severance pay is money you give to an employee for a certain length of time after they lose their job. Unlike a final paycheck, severance pay is negotiable. And, you may require employees to sign something saying they won’t sue your business if they accept severance pay. 

Final paycheck laws by state

There is no federal final paycheck law that requires employers to give employees their wages immediately. But, some states require the employer to provide a terminated employee’s final paycheck immediately or within a certain time frame, such as the following payday. And in some states, the final paycheck laws depend on whether the employee was fired or quit.  

As an employer, you must follow your state’s final paycheck laws. Failing to do so can result in penalties or even a lawsuit. Beyond when the last paycheck is due, your state might set further regulations on things like paying out unused vacation pay. 

Termination pay by state: Chart

Take a look at the following chart for last paycheck laws, for both employees who quit and employees you fire. Keep in mind that state laws can change, so check with your state for more information (using the handy links provided below!).

Make sure to consult your state government for more information. Your state might:

• Have more restrictive final paycheck laws for some circumstances
• Make exceptions if you have a written contract or agreement with an employee
• Let employees request earlier payment

Final pay by state: Map

Use our quick-reference map to find your state’s final paycheck laws.

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This article has been updated from its original publication date of October 15, 2018.