Employment rates and laws vary by state. Among these laws include states with at-will employment, where an employer can terminate an employee for any reason without warning, as long as it is not illegal or discriminatory.
When an employee leaves a business, the business owner must follow an employee termination checklist. In this checklist is the responsibility to give a terminated employee his or her final paycheck.
Final paycheck laws vary depending on the state your employees are in, but there are some general rules. Whether your employee quit or you terminated him/her, you must give them their last paycheck containing their regular wage from the most recent pay period. You cannot withhold money from the employee’s last paycheck, even if the employee owes your business, and you cannot attach a condition of receipt to the final paycheck.
As an employer, you must follow your state’s final paycheck laws, and failing to do so can result in legal action. Many employers fail to comply out of ignorance.
Some states require an employer to provide the final paycheck within a specific time frame or immediately. Some states’ final paycheck laws depend on how the employee was terminated, either by quitting or fired by the employer.