When do we have to give fired employees their final paychecks?

State law determines when employees are entitled to a final paycheck -- and what it must include.

Updated by , J.D., University of Missouri School of Law
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Question: When is the final paycheck due for a fired employee?

My company is firing an employee this week. Can we give him his final paycheck on the regular payroll schedule, or do we have to provide it sooner? And does it matter whether we are laying him off or firing him for cause?

Answer

State law determines when you must provide final paychecks. To answer your second question first, it doesn't matter whether the employee is laid off, fired with cause, or fired without cause.

However, some states distinguish between employees who quit and employees who are terminated involuntarily, for any reason. In these states, employers can wait a bit longer to give a final check to an employee who quits, presumably because an employee who decides to leave your company has more time to plan ahead financially (and probably also have a new job lined up).

The deadlines for final paychecks vary by state. Some states, including California and Massachusetts, require employers to provide a final paycheck immediately. Some states allow employers to wait until the next business day or give employees from a few days to a week to cut that last paycheck. And, some states allow employers to wait until the next regularly scheduled payday, as you would like to do.

To find out your state's requirements, see Final Paychecks for Departing Employees.

Paying Out Unused Vacation Time

Before you cut that final check, make sure it includes everything you are legally required to pay. For example, some states require employers to pay out unused, accrued vacation time. (Some states require this in all circumstances; others require it only if company policy or practice is to pay out vacation time). If your state imposes this mandate, the vacation money must be included in the final paycheck.

What to Do If a Final Paycheck Is Never Claimed by a Terminated Employee?

If an employee fails to collect their final paycheck, the employer should make reasonable efforts to arrange for them to receive the payment. Such efforts might include mailing them the check or arranging for it to be picked up at the employer's location. (Of course, this issue generally won't arise for workers who are paid via direct deposit.)

If, despite these efforts, the employer isn't able to reach the employee or if the employee refuses to collect their paycheck, the employer must follow their state's law on unclaimed wages. This might involve turning the funds over to the state's unclaimed property department or holding them in a separate account for a specified period of time before disposing of them.

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