A gentle reminder to California employers: you only have 24 hours or the same day to pay an employee if you decide to fire them. It is possible to wait until the end of the pay period in some other states (see table below for state-by-state breakdown), but what if the employee leaves early and you can’t give them their last paycheck? You still have an obligation to attempt payment within the time guidelines.
Your first approach should be to reach out to the employee to make arrangements to hand over the final paycheck. As we always recommend, make sure to document your contact with the employee in some form of writing (e.g., text or email) to protect your company. If they end up suing for not providing the check within the established time, it may cost you thousands of extra dollars!
You should also attempt to send the check immediately to the last known address by certified mail with a return receipt. If the employee signs for it, mission accomplished. But if it is undeliverable, it will come back to you, making things much more complicated.
If you do not have a correct address and you have made attempts to resolve this issue within the guidelines, this is what the California State Labor Commission says to do:
Do not open the envelope. Leave it in the condition it was returned to you. You can either keep it in your safe, or you may send it to your Labor Commission office along with a detailed letter showing when the termination occurred, the date you sent the check and that it was returned unopened. You would put all of this in a new envelope. Again, just fold the original mailing unopened and put it in the new envelope. Click here to locate the nearest office of the Labor Commissioner.
The information above is accurate for most states and will create the least amount of legal issues for you in the situation of an unreachable employee.
Bottom line: make sure that any employee who works for you has at least filled out a W-4 tax form and exchanged cell phone numbers with their supervisor on or by the first day of employment. This is vital information to have in the event of an employee quitting on the first day.
Remember, the fine for paying late is the full daily wages for each day missed. So, an employee working 8 hours at $15 per hour is getting an extra $120 per day in penalties if you do not get that check to them. That could mean that a $200 paycheck could be $4000 after one month. In situations like these, it is better to pay a little for postage.
Terminations as a whole can be challenging to manage and very costly. HR Mobile Services, Inc. offers a hands-on approach to review your current employee documents and make recommendations on policies that can be approached going forward. We also assist in guiding through the handling of warnings and approach to terminations. If you’re ready to save time, money, and stress in keeping your business compliant, we are available 24/7 at 877-734-7677.
|Final Paycheck Laws if Employee is Fired||States|
|No law||Alabama, Florida, Georgia, Mississippi|
|Within 24 Hours or Same Day||California, Colorado, Hawaii, Illinois, Massachusetts,
Minnesota, Missouri, Montana*, Nevada, Utah
|Within 72 Hours||New Hampshire, Vermont|
|Next Business Day||Connecticut, Washington D.C., Oregon|
|Within 3 Working Days||Alaska|
|Within 6 Days||Texas|
|Within 7 Working Days||Arizona**, Arkansas|
|Next Scheduled Payday||
Delaware, Idaho***, Indiana, Iowa, Kansas,
* Employers can maintain a written policy that extends this time to the next payday or within 15 days
** Can also be on next scheduled payday, depending on whichever time period is closer
*** Can also be within 10 days, depending on whichever time period is sooner. Employees can make written request for earlier payment, which requires payment within 48 hours of request.
**** Can also be within 14 days, depending on whichever time period is later
***** Can also be within 15 days, depending on whichever time period is sooner
****** Can also be within two weeks, depending on whichever time period is sooner
******* Can also be done when former employee returns company property
******** Can also be done within 21 days, depending on whichever time period is later
********* Can also be done within a month, depending on whichever time period is sooner
Department of Industrial Relations. https://www.dir.ca.gov/dlse/dlsewagesandhours.html/. Accessed 2 Feb. 2021
“Final Paycheck Laws by State 2021.” Paycor, 2 Dec. 2020, www.paycor.com/resource-center/final-paycheck-laws-by-state.