Our interactive guide allows you to search for final paycheck laws in your state. You’ll also learn about all the pay requirements in place for employers upon any termination.
Final Paycheck Laws: What Every Employer Should Know by State
Charlette has over 10 years of experience in accounting and finance and 2 years of partnering with HR leaders on freelance projects. She uses this extensive experience to answer your questions about payroll.
Heather is a staff writer and payroll specialist with several years of experience working directly with small business owners. Her expertise allows her to deliver the best answers to your questions about payroll.
This article is part of a larger series on How to Do Payroll.
Final paycheck laws dictate how much time an employer has to issue a final paycheck after an employee has voluntarily resigned or been terminated. Federal law does not generally require employers to issue final paychecks immediately. At a minimum, the federal Fair Labor and Standards Act (FLSA) requires former employees to receive payment on the next scheduled payday.
However, state regulations generally require employers to issue final paychecks on an employee’s last day or within a certain number of days after the employee leaves.
Final Paycheck Laws by State
Final paycheck laws vary by state, so it’s important to familiarize yourself with the relevant location-specific requirements. In general, however, states require payment on an employee’s last day, within a certain number of days following resignation or termination, or on the payday immediately following an employee’s last day.
To find out the final paycheck laws your business may be subject to, select the state in which you operate from the drop-down boxes below:
Final Paycheck Laws for Employer-Initiated Terminations
Final Paycheck Laws for When Employees Quit
You should always review your state’s specific regulations for final paychecks before issuing any payments. Some states, such as California, require payment immediately when an employee is fired, while others, such as Tennessee, require payment within 21 days.
Alternatively, some states (ex. Alabama, Florida, Georgia, and Mississippi) do not have any statutes that address final paychecks. Employees in these states are protected by the FLSA, which allows employers to issue final paychecks on the next regular payroll day
Who Must Follow Final Paycheck Laws?
Most states have final paycheck laws that require employers to issue an employee’s final paycheck on a specific timeline. All employers must follow these laws for their in-state employees; employers must also follow the relevant final paycheck laws for their out-of-state employees, remote or otherwise.
Final Paychecks During Layoffs and Other Employer-Initiated Terminations
In addition to variations in state requirements, final paycheck laws often differ depending on whether an employee resigns or is terminated. For this reason, it’s important to understand state requirements when deciding how to terminate an employee.
If you terminate an employee and need to issue a final paycheck quickly, you can print payroll checks online for free. If you use a provider to do payroll, be sure to give enough processing time to cut the check in time. While some providers may not be able to issue payroll with a same-day turnaround consistently, most are able to issue paychecks with a quicker turnaround in one-off situations. It’s important to familiarize yourself with what final paycheck processes your provider has in place to ensure you’re in compliance.
Penalties for Not Cutting Final Paychecks on Time
If an employer fails to comply with payroll requirements, it could be subject to a number of financial or legal penalties. For example, in California, employers who fail to issue a final paycheck on time are subject to waiting time penalties. This means that, in addition to the outstanding paycheck, the employer must pay the former employee wages for each day the paycheck is late under state law.
An employer that fails to issue a final paycheck in a timely manner may also be sued by its former employee. However, this is less common because the amount of a final paycheck may not justify the cost of hiring an attorney. Employees owed back pay can also enforce final paycheck laws by contacting the Department of Labor’s Wage and Hour Division or their state’s labor department.
Bottom Line
It’s important for business owners to understand final paycheck laws to avoid penalties and limit the risk of lawsuits from former employees. While the FLSA imposes general final paycheck requirements, more stringent laws are imposed at the state level and vary depending on whether an employee resigns or is fired. What’s more, final paycheck laws depend on an employee’s location—not the employer’s—so you may need to familiarize yourself with multiple laws if you have out-of-state employees.
For more information on specific payroll laws that may impact your business, such as minimum pay frequency and pay stub laws, check out our state payroll guides below:
