The exact date at which employees need to receive their final paycheck upon termination is a mystery to many small business owners. The fact that there are laws surrounding the issue at all vexes many who are responsible for paying employees. And it’s not surprising. State laws are complicated and the Fed has no laws about it at all. In the words of the Department of Labor,
“Employers are not required by federal law to give former employees their final paycheck immediately. Some states, however, may require immediate payment.”
What exactly is meant by immediate payment, you ask? It depends on the state. Some states require payment be made immediately, some within 2 days, 1 day, or just on the next normal payday. Beyond that, the rules depend on whether the employee was fired or quit. Here is a list of each state’s last paycheck requirements for reference.
It is a good idea to be familiar with the laws in your state because if you aren’t and you delay the final pay check, you might face penalties or even lawsuits for violations. Either eventuality can be pretty costly.
In addition to these final paycheck laws, many states also require that employers payout unused vacation time on that final paycheck. For example, in California, vacation time is considered wages, so any unused vacation time must be paid as wages on that final paycheck.
Companies have a few choices as to which payroll schedule to use. Knowing which is right for your company, though, takes a little thought. I’m going to go over the pros and cons of each.
The four most commonly used payroll schedules in the U.S. are weekly, biweekly (which means every two weeks), semi-monthly (which means twice a month), and monthly.
- Weekly (52 periods per year)
- Every Two Weeks (26 periods per year)
- Twice Monthly (24 periods per year)
- Monthly (12 periods per year)
Most states have set payday frequency requirements. It’s always fine to pay employees more often than required by the state but not less often.
So which one should you use? Here are the details of each. Continue reading
Employers usually pay their employees bi-weekly or monthly. Their schedule is not random, however, nor is it just a matter of convention. Employee paychecks must be delivered according to each state’s per-determined timeline.
Employers cannot lawfully decide to pay employees whenever they want. They cannot make up a rule which issues checks every two months, for example. Some states don’t even allow for once per month pay checks. It is a good idea to know your state’s payday requirements so that you don’t ruffle any feathers and end up in court.
Follow this link on the Department of Labor website for a table of state payday requirements. Every state has slightly different requirements.
Whenever a holiday rolls around employers start thinking about how and how much to pay their employees and whether it’s mandatory to pay them at all. Many companies offer 5 to 10 paid holidays per year. This custom has left many employers unclear on whether paying employees for holidays is actually a requirement.
ADP is probably the most popular payroll outsourcing option available right now. Other popular payroll services in addition to ADP include QuickBooks and Paychex.
Timesheets.com integrates with them all!
Whichever payroll company you use, we can design a file (free of charge) that can be used by your payroll processor. Whether it’s uploaded on the payroll processor’s web interface, or emailed to the person crunching the numbers, no matter if it’s a large payroll corporation or single handed operation, we make sure your payroll numbers are in the right format.
The best part is, Timesheets.com was designed as a user-friendly time tracking service. From the start, it was meant to be an intuitive service that you and your employees interact with each day. We aren’t an ad-hoc time tracking service like most of the time tracking add-ons available through payroll providers. Ours is a feature-rich platform, designed to make it easy for you to fill your employee management needs.
If you’ve been looking for an inexpensive service that seamlessly integrates with payroll, we can help!
Don’t shred those time sheet records!
Did you know that you are required to retain your employee’s time records for at least 3 years? After terminating an employee, the temptation might be to dispose of the records but, in fact, you must keep them.
“Each employer shall preserve for at least three years payroll records, collective bargaining agreements, sales and purchase records.” from dol.gov
Timesheets.com doesn’t delete records and we’re the only time tracking service out there that allows company access to them even if you cancel service. We know these records are important and that a company might need them in case of a lawsuit so we make it easy for you to access them when you need them.
When employees work two different jobs for one employer or even for two different employers at the same job site (in many situations), the employee’s hours must be combined so that overtime can be properly calculated.
From time to time employers don’t realize that employees need to punch in on the same time clock when they work two different job types, or when they technically work for two different employers by name but spend their time doing the same job at the same job site.