Final Paycheck For Terminated Employee

Employee Final Pay / Termination Process by State

Terminating an employee, especially in a remote or out-of-state setting, requires careful consideration. Wage payment laws governing the timing of final wages can be complex and vary significantly from state to state, and sometimes even within states, due to city or county requirements. These laws typically dictate when an employer must pay final wages to an employee who has separated from employment, whether voluntarily or involuntarily.

Key points regarding final pay timing requirements include:

1. By State: Final pay timing requirements vary widely by state. Some states mandate immediate payment of final wages upon termination, while others allow a grace period of a few days or until the next payroll day.
   
   
2. Type of Separation: The timing of final pay may differ depending on whether the separation from employment is voluntary or involuntary. In some states, there may be different requirements for layoffs, resignations, or terminations.
   
   
3. Inclusion of Additional Earnings: Final pay may need to include not only regular wages but also other earnings such as commissions, bonuses, or the value of accrued but unused time off (e.g., vacation time, paid sick leave).
   
   
4. Requirements for Other Earnings: Some states explicitly require the payout or forfeiture of additional earnings like commissions or accrued time, while others may only mandate payout if required by an employment contract, collective bargaining agreement, or employer policy.
   
   
5. Local Requirements: Individual localities within some states may have their own requirements regarding the payment of accrued time, adding further complexity for employers operating in those areas.

Given the complexity and variation in wage payment laws, it is crucial for employers to stay informed about the specific requirements in their jurisdiction(s) and to ensure compliance with all applicable laws and regulations when processing final wages for employees who have separated from employment.

Example of how some states handle post separation wages indicated below.

Illinois

Payment of Voluntary Separation

Payment at the time of termination, if possible, but no later than the next payroll period

Payment of Involuntary Separation

Payment at the time of termination, no later than the next payroll period

Payment of Accrued Time – Review Jurisdiction (Chicago, Cook Co)

Honor company policy and should be paid to a separated employee

California

Payment of Voluntary Separation

Payment within 72 hours of termination or immediately for employees that give a 72-hour notice

Payment of Involuntary Separation

Immediately upon the employee’s separation

Payment of Accrued Time

Honor company policy and should be paid to a separated employee

South Carolina

Payment of Voluntary Separation

Payment within 48 hours after employee resigns or by next regular payroll

Payment of Involuntary Separation

Payment within 48 hours after employee resigns or by next regular payroll

Payment of Accrued Time

Honor company policy and should be paid to a separated employee

Please feel free to reach out to Connor Gallagher OneSource (CGO) if you have any questions or need assistance with final paycheck for terminated employee requirements. We are here to help!

Contact our team at info@GoCGO.com