Todd could clearly tell that Louise was upset. “What’s up?” Todd asked. Louise responded, “You wouldn’t believe the conversation I just had with Johnnie, he claims we owe him more salary for the final week he worked for us. He has threatened to sue the company as well as me if we don’t pay him by the end of today’s business.”

Paul questioned, “Didn’t our accountant say that we didn’t have to pay him until the next payday?” “That’s what he told us” Louise said. She went on, “However, evidently that’s the rule if Johnnie would have quit, in this case we fired him so the time for paying final wages is different. I don’t know what to do, and I’m not sure how much we owe Johnnie if anything.”

Did the company owe Johnnie additional wages? Many states regulate payment of final paychecks. Final paycheck requirements tend to vary depending on whether the employee’s termination was voluntary or involuntary. When a worker is discharged involuntarily, the employer often is required to pay accrued wages immediately or within a few working days. An employee who separates from his or her employer voluntarily usually must be paid by the next regularly scheduled payday, although some states require payment on the employee’s last day if the employee gave advance notice of his or her resignation.

Salaried Exempt Employees – The Fair Labor Standards Act requires that an exempt employee must be paid his complete salary for any week wherein work has been performed. For example, if an exempt and salaried employee works two days of the workweek she must be paid her complete and total weekly salary.

Unless…the employee in question begins or ceases to work at some time during the pay period. For example, if Ted is an exempt salaried employee and is paid $1000.00 a week but begins employment on Wednesday, for his first week’s pay the company would owe him $600.00. If Mary (with a $1000.00 per week salary), an exempt and salaried employee is fired or quits on Tuesday, the company would owe her $400 for her final week’s work.

One of the few exceptions to the salary rule is when an employee begins or ends work during the work week.

Hourly Employees – Hourly employees must be paid for all hours that are worked within the final pay period. There are no exceptions for paying an hourly employee less for the hours works at the end of employment.

Many employers believe that it’s legal to pay a departing employee only minimum wage for the hours worked during the final period of employment. While this practice would not violate Federal law there are few if any States that would allow this kind of wage reduction for the employee’s final pay period.

Some states will be somewhat flexible with employers concerning the payment of final wages as long as the employer is behaving in a reasonable manner. However, other states will allow no wiggle room within their laws and are happy to severely punish employers who violate the states final wage payment laws.

Here is a short description of final wage payment rules for some states. Please call the HR Department at A Plus Benefits if you have any questions concerning your state’s final wage payment rules.

The payment of wages, most especially, final wages can be an emotional issue. The best advice that A Plus Benefits can give is to have an employee’s final paycheck in hand when the employee is notified of his termination. Of course, there are times when an employer does not have the luxury to plan for a termination, in this case, it’s best to notify A Plus Benefits the same day of the termination so a final paycheck can be mailed to the employee by the end of the business day.

If you are a Nevada employer, you will seldom if ever prevail against the Nevada Labor Commission if you do not pay a terminated employee immediately at the time of termination.

There is no reason for any client of A Plus Benefits to be confused on the issue of the payment of final wages. Please call the HR Department in advance of an employment termination so the payment of final wages can be discussed and to facilitate the preparation of the employee’s final pay.

As always, we appreciate your business. Our reason for being in business is to assist with making your business easier to run. It is our goal to provide you with timely and precise information…when we do that, our efforts….allow you to get back to business.

Randall Barker is the VP of Human Resources for A Plus Benefits, Inc.

Read Randall’s previous HR Update.

This entry was posted on Tuesday, July 10th, 2007 at 7:00 am and is filed under Human Resources, Outsourcing, Termination. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.