Where the Rubber Meets the Road is a series of Podcasts designed to highlight what A Plus Benefits has done for its clients. In this episode, Allen Rupp, CEO of Bully Dog Technologies in American Falls, Idaho discusses how A Plus Benefits has brought him a single source solution for payroll, safety, human resources and benefits and become a partner in his business.
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.
In April 2007, the dean of admissions at the Massachusetts Institute of Technology, Marilee Jones admitted to lying for 28 years about her academic credentials. Jones had claimed she received three degrees from New York academic institutions, while in reality Jones had never completed an undergraduate degree.
This story is just one of many to come out in the news in recent years. From RadioShack Chief Executive Dave Edmondson to Former Federal Emergency Management Agency head Michael Brown to Notre Dame Football coach George O’Leary, the misrepresentations on resumes are astounding.
It’s not just high-level executives getting caught in the act. According to a recent Careerbuilder.com survey, 57 percent of hiring managers say they have found discrepancies on an applicant’s resume. Managers have most often found that applicants have changed hire or termination dates to cover employment gaps.
With the large number of misrepresentations found on resumes, it is increasingly important to check employment references, background information, and previous work history, and verify the information on a candidate’s resume before making a hiring decision. Look for things that don’t make sense. Check academic credentials and verify hire and termination dates. Also, a thorough interview can often ferret out discrepancies found on resumes.
Checking this information can be time-consuming, so consider outsourcing it to a vendor who specializes in background checks. It may not be worth you time to call and check on a candidate, but it may worth your money to find someone to do it for you. Consider the amount of money potentially lost due to a tarnished reputation as a result of inadequate hiring practices.
Samantha Bushard is an HR employee for the Idaho office of A Plus Benefits, Inc.
Where the Rubber Meets the Road is a series of Podcasts designed to highlight what A Plus Benefits has done for its clients. In this episode, Tricia Green of the Holiday Inn in Rock Springs, Wyoming discusses how A Plus Benefits relieves some of her administrative burden and provides an economical benefits solution for her employees.
The importance of cash flow and liquidity to the success and survival of a small business is not a lesson that successful small businessmen need. They already know of its importance. What small businessmen might need however, is a toolbox of cash flow management tools. To this end I have shared a few thoughts on factoring and vendor credit as such tools. Another tool that is available to businesses of all sizes is the PEO.
Professional Employer Organizations provide many valuable services, most of which are easily recognized and well touted. However, there is a likely unknown positive side-effect of using a PEO, cash flow management.
For many small businesses, employee taxes are payable on either a monthly or quarterly basis. These tax bills are not small and leave many small businesses scrambling at the end of the month or quarter to come up with the cash to pay the government. However, when using a PEO, the PEO is responsible for paying the monthly or quarterly tax bill. As a result the PEO collects those taxes from the employer or small business as part of the regular payroll invoicing cycle. In this case the PEO acts as a type of savings mechanism. Although the small business will be forgoing the use of the funds the PEO collects a few weeks or months in advance, there will be no month or quarter end scrambling to pay the bill.
In most states businesses are required to pay a quarter of their worker’s compensation premium at the beginning of the year. The rest of the premium is then paid on a regular basis throughout the year. For many small businesses this initial payment of their worker’s compensation premium can be rather substantial. Not only can it be difficult to come up with the required sum at one time, but the small business forgoes the use of the funds used to pay the premium several months before the benefits of the insurance are consumed. PEOs help to smooth out cash flow by collecting the worker’s compensation premium as part of the regular payroll invoicing cycle. There can be no upfront payment required of the small business. This means your cash can be working for you in the bank or helping you to grow your inventory or extend vendor credit as you work to grow your business.
The PEO serves as a mechanism to smooth out cash flow. In neither of the above cases would you avoid payment of expenses. However, the PEO does help you manage the cash flow associated with the payment of these expenses and therefore represents another tool that can be used in your overall cash flow management strategy. Although it is unlikely that you would make your decision to use a PEO based solely on the cash flow management that they provide, it is a benefit that should be considered.
Richard Zollinger is a finance manager at American Express.
