How Long Can an Employer Hold Your Check for Once Your Contract is Terminated
The end of any employment can be a terrifying and stressful time, regardless of why or how you are leaving the job. When you have left the job though, you probably automatically think of when you will receive that final paycheck, and that’s entirely understandable. Our paychecks are critical to our lives due to financial commitments and familial obligations. It literally can mean the difference between life and death in some instances.
The rules around final pay differ from state to state. Some states have differing rules for the nature of your employment completion, meaning the length of time legally required for your check to arrive could change if you were fired or if you quit the job.
The best way to examine these rules is to look at 10 example states and outline their rules.
Alabama has no specific law that says when a final check should be issued to the former employee. However, an employee might find it helpful to contact the Department of Labor in Alabama to try and solve the problem. If an employer is refusing to pay a commission check though, they only have 30 days after the employee was terminated to pay up. If they fail to do so, they may end up liable for 3 times the amount owed and any incurred legal fees.
Sick pay and vacation pay outstanding that are part of your employment contract must be paid, but this can be a confusing area of contention. In this situation, you should contact the Alabama Department of Labor.
If you’ve been fired or you’ve been made redundant from your role, employers are required to pay you with your final paycheck within 3 working days. If you quit your role, the employer can wait until the next normal pay date, so long as it is at least 3 days after provided notice. This pay must include any unused vacation and sick pay.
An employer can hold back any pay if the employee owes them due to debt. If the final figure is being disputed, an employer can withhold the check pending completion of the dispute.
Also read: What Should I Do If My Employer Won’t Provide A Pay Stub?
It is a legal requirement that all monies outstanding to the employee must be paid, no later than the employee would normally expect their pay. It is irrelevant if the employee quits, is fired or laid off. The only time an employer can withhold the check is if the final amount is in dispute and there is no legal time frame on this resolution.
Arkansas has the same process for paychecks being withheld as Arizona.
A fired employee in California must receive their paycheck straight away, which is also the case if the employee decides to leave their role but gives a minimum of 72 hours notice. If the employee leaves and does not give the 72 hours notice, the employer can take up to 72 hours to pay the employee their final paycheck.
The only time these differ is if the employment was in a specific category such as in the movie business or as a seasonal worker.
The employer may withhold an amount of the paycheck if it is in dispute but only the amount that is being disputed. Other amounts must be paid straight away.
Also read: Do You Need Multiple W2 Forms From The Same Employer?
By quitting, the final paycheck must be paid on the normal scheduled pay date. If however, the employee was fired - the time taken will depend on whether the accounting department is available. If they are, the payment must be paid immediately but if they’re not available - it should be made within 6 hours of their next working day or 24 hours if they aren’t operating.
The employer can hold back payment if they need to make reasonable adjustments for 10 days after termination. If a dispute is raised, the employer must pay within 14 days or be held liable for more money.
An employer cannot withhold payment from an employee regardless of how termination occurred and must pay the next day. However, if a dispute is raised - the employer can wait until the next normal payment date. The employer does not need to pay any benefits, vacation or sick pay in the final paycheck.
Texas law requires employers to pay a fired employee within a time frame of 6 days and they must pay an employee that quits on their next usual pay date. Employers are not allowed to withhold any of the employees usual pay for any given time.
Employers in New York must pay a terminated employee on their next usual payment date. They cannot hold back any payment or any portion of their pay.
Missouri employers must pay their employees who are terminated immediately, but an employer can technically wait up to 7 days if they cannot reasonably make a payment and the employee has put their payment request in through certified mail.
There isn’t a law in Missouri that demands a time frame for final paycheck payment, so it’s accepted that employers follow the Fair Labor Standards Act.
Also read: Cost Of Living By State In USA
What Do These Examples Show?
These 10 different state examples show that the rules on withholding an employee’s paycheck are different for some or have certain requirements solely in their state.
States normally issue employment guidelines for when you can expect payment and for how long an employer can reasonably hold onto your final paycheck. This may swing depending on the nature of how the employee left their employment, such as redundancy, being fired or quitting.
If a state does not have a specific law for when a paycheck should be issued post-termination of employment, then the employee can do some of the following, if they wish to try and resolve the situation and receive their pay:
Try to contact the state’s labour department
Hire an attorney of employment law
Try to contact the federal department of labor
Is The Final Paycheck Different To The Rest?
It’s common for the final paycheck to be a physical, paper check. The pay stub attached normally has a detailed breakdown and outline of your employment within the place of work, including your pay to date, tax information and final payment amount.
Also read: Free Printable Paycheck Stubs & Templates
Will My Paycheck Include My Normal Benefits?
This will also differ depending on your state and terms of your employment. This will usually be outlined in the employment contract. This will also differ if the employment is with the federal government.
Also read: Why Not to Use A Fake Pay Stub Generator?
What To Remember
Your final paycheck must be provided to you within specific time frames whenever you are terminated from employment. To check the terms of this, check the employment rules in your state and check with your employment contract.
If there is any confusion, try to contact your Human Resources department for clarification or contact your state’s labor department. Your employer may have reasonable time to withhold your paycheck, particularly if there is a pay dispute.
Our check stub generator is also a great way to make check stubs online and it is simple to use.