Accounting
When Do You Have To Pay Terminated Employees?
Each state has its own laws that dictate when employees are to be paid and this extends to terminations. While many states allow payment for voluntary termination to occur on the next scheduled pay date, several states have accelerated timelines even for
Jan. 25, 2016
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From the Thomson Reuters Blog.
Every now and again, we all have certain employees that need to be let go. While an involuntary termination is never a pleasant event, care should be taken with final pay to avoid complicating the matter and possibly incurring more expenses.
Each state has its own laws that dictate when employees are to be paid and this extends to terminations. While many states allow payment for voluntary termination to occur on the next scheduled pay date, several states have accelerated timelines even for this occurrence.
The following states have accelerated timelines for voluntary terminations.
State | Payment Time Requirement |
---|---|
CA | Within 72 hours of notice or resignation |
DC | Earlier of next regular payday or within 7 days |
ID | Earlier of next regular payday, or 0 working days not including weekends and holidays; different rules apply if employee gives employer written request for earlier payment |
IL | At separation if possible, and never later than the next regular payday |
KY | Later of the next regular payday or within 14 days after termination |
ME | Earlier of next regular payday or 2 weeks after demand |
MI | As soon as the amount can with due diligence be determined |
MN | Next regular payday unless next payday is less than five days from employee’s last day, then the second regular payday, but not more than 20 days |
MT | Earlier of next regular payday or 15 days from the date of separation |
NE | Earlier of next regular payday or within 2 weeks of termination |
NH | Next regular payday; 72 hours if notice given |
NV | Earlier of next regular payday or 7 days |
OH | Wages earned in the first half of the month must be paid by the first day of the following month; wages earned in the last half of the month must be paid by the 15th of the following month |
OR | Immediately if given 48 hours’ notice; otherwise, the earlier of the next regular payday or 5 days, excluding weekends or holidays |
SC | Within 48 hours or by next regular payday, not to exceed 30 business days |
TN | Later of next regular payday or 21 days after resignation |
WA | At end of pay period (with certain exceptions) |
WI | Next regular payday; within 24 hours if employer merges, liquidates, ceases business or relocates |
Involuntary termination rules are quite different. Several states require immediate payment of wages and some states even require unused accruals (i.e. vacation, etc.) to be paid at time of termination. Below is a list of states that require accelerated payments for involuntary terminations.
State | Payment Time Requirement |
---|---|
AK | Within 3 working days; striking or temporarily laid off employees must be paid by the next regular payday |
AR | Within 7 days |
AZ | Earlier of the next regular payday or within 7 working days; public school employees must be paid within 10 calendar days of termination |
CA | Immediately (with exceptions in certain industries) |
CO | Immediately, unless—at the time the employee is fired—the employer’s payroll department is not operational |
CT | Next business day (employees laid off must be paid by next regular payday) |
DC | Next working day |
HI | Immediately or, if unable to do so, next working day |
ID | Earlier of next regular payday, or 10 working days not including weekends and holidays |
IL | At separation if possible, and never later than the next regular payday |
KY | Later of the next regular payday or within 14 days after termination |
LA | Earlier of next regular payday or within 15 days after termination |
MA | Immediately, except in Boston |
ME | Earlier of next regular payday or 2 weeks after demand (certain exceptions for employers in manufacturing or mechanical businesses) |
MI | As soon as the amount can with due diligence be determined |
MN | Within 24 hours of demand |
MO | Immediately |
MT | Immediately, unless the employer has a written policy that extends the time for payment of final wages to the earlier of the employee’s next regular payday or within 15 days of separation |
NE | Earlier of next regular payday or within 2 weeks of termination (different rules apply to employees of a political subdivision) |
NH | Within 72 hours |
NM | Within 5 days; 10 days if wages are paid by piece-work or commission |
NV | Immediately |
OH | Wages earned in the first half of the month must be paid by the first day of the following month; wages earned in the last half of the month must be paid by the 15th of the following month |
OR | Next business day (with certain exceptions); seasonal farm workers are to be paid immediately, eff. 1/1/2014, with some exceptions. |
RI | Next regular payday; within 24 hours if employer merges, liquidates, disposes of or relocates the business to another state |
SC | Within 48 hours or by next regular payday, not to exceed 30 business days |
TN | Later of next regular payday or 21 days after discharge |
TX | Within 6 days |
UT | Within 24 hours |
VT | Within 72 hours |
WI | Next regular payday; within 24 hours if employer merges, liquidates, ceases business or relocates |
Users of Accounting CS Payroll have detailed help available to assist in these matters. You will often need to make the employee inactive after the final payroll check has been issued. Learn more information about working with inactive employees.
More Articles From James Paille.
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James Paille, CPP has been an executive manager in the payroll service industry for more than 30 years, specializing in managing multi-location offices. He is currently director of Operations, MyPay Solutions, Thomson Reuters. Jim is a member of the APA’s Board of Directors and National Speakers Bureau, and chairs the CPP Certification Review Panel. He holds a Bachelor of Science in Accounting from St. John Fisher College in Rochester, NY.