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Human Resources & Payroll

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

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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.