MAY 2018 HR MAGAZINE 67
department wasn’t open at the time
of the termination, the check can
be issued up to six hours after the
next business day starts. And when
payroll is administered ofsite, employers have 24 hours from the start
of the next business day to deliver the
check. Colorado workers who resign
may be paid on the next payday.
Some states, such as Delaware and
Maryland, don’t apply diferent rules
for voluntary and involuntary terminations. They simply mandate that a
worker receive the last check by the
next regularly scheduled payday.
In the instance that an employee
passes away, other rules may apply,
notes Aurelio J. Pérez, an attorney
with Littler in San Francisco. In Arizona, for example, up to $5,000 may
be given to a surviving spouse. The
balance goes to the employee’s estate.
In California, a maximum of $15,000
may be paid to the surviving spouse
without going through probate.
IS THE WORKER OFFSITE?
“Another issue that sometimes arises
is how to send the fnal paycheck if
the person is not physically present
at the jobsite for whatever reason,”
Be cautious about mailing the
check without frst communicating
with the employee. It is a better
practice to inquire as to how he or
she wishes to have the check delivered. At a minimum, use a method
where shipping can be tracked and
delivery can be verifed. “Otherwise,
an employer can run the risk of late
payment penalties under certain
state laws,” he says.
WHAT COUNTS AS WAGES?
Note that some states count vacation
time as earned wages. Employers in
California and Montana must pay
out any accrued vacation time, for
instance, while those in Arizona and
Hawaii are only required to do so if
that aligns with their company policy.
In Maryland, organizations can
opt out if they have a written policy
stating that they don’t pay for ac-
crued vacation and they notify new
hires about the policy.
No matter where you live, the law
probably doesn’t require companies to
provide compensation for unused sick
leave that is treated in a separate category of time of. However, employers
that lump together vacation and sick
leave into a paid-time-of (PTO) program will need to pay out all unused
PTO in some states. A payout may be
mandated under a collective bargaining agreement, too.
WHAT DEDUCTIONS CAN BE
It may be tempting to recoup a loan
payment or vacation advance by
subtracting the balance from
a worker’s fnal paycheck, but
don’t take that step unless
you’re sure that doing so is in
compliance with state law, says
Steve Hernández, an attorney
with Barnes & Thornburg in
Los Angeles. In California,
for example, employers aren’t
permitted to make any deductions
from fnal wages other than the usual
ones for taxes and health care bene-
fts. Other states have prohibitions on
deductions from fnal pay, too.
HR leaders need to understand what
types of compensation might be owed
to departing employees, including
commissions, vacation time, bonuses
or stock options. If the rules around
fnal pay in your location are complicated—for example, if you have
a remote worker from Nevada with
withholdings in Pennsylvania—it’s
probably a good idea to seek counsel
from an attorney.
Lisa Nagele-Piazza, J.D.,
SHRM-SCP, is senior legal
editor for SHRM.
VACATION PAYOUTS AT SEPARATION
Accrued vacation time
must be paid out
Employers may opt out of paying
accrued vacation time if certain
conditions are met
Accrued vacation time must
be paid out if the employer
agreed to do so
No state law