What Are the Rules for Paying an Employee Who is Leaving?

When an employee is terminated, the employer must give him or her their final paycheck immediately, or within six hours of the start of the next business day if the payroll office is closed, or within twenty-four hours if the payroll is processed offsite.

It is the policy of the Division of Labor Standards and Statistics that mailing of wages due to a separated employee is acceptable when the postmark is dated within the specified time periods as described above.

In the case where a terminated employee was entrusted during his or her employment with the collection, disbursement, or handling of money or property, it is acceptable to deduct the amount of money or the value of property that the employee failed to properly pay for or return to the employer from the final paycheck. In this instance, the employer shall have 10 calendar days after the termination of employment to audit and adjust the accounts and property value of any items entrusted to the employee before the employee’s final wages or compensation shall be paid.

When an employee voluntarily quits or resigns, they are to receive their wages and compensation due and payable upon the next regular payday. They may be paid the same way as they would on any other payday. If your company requires an employee give advance written notice of resignation, such as two weeks’ notice, you may be required to pay for that notice period even if you decide you want them to transition out sooner.  If you ask that employee to leave without pay after notice has been given, this action could turn a voluntary resignation into an involuntary termination and make the employee eligible for state unemployment compensation.  It also can send a negative message to the others that you can get penalized even if you give adequate notice.

We know turnover can be difficult. We have your back when it comes to getting that final paycheck cut and promise to make the process easy.  If you are interested in learning more about our payroll services, please feel free to reach out to us at Payroll Vault.

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