Question: An employee stopped showing up for work, so we fired them for job abandonment. How do we get their final paycheck to them, and what are the time frames for doing so?
Answer: The answer depends on state law, and even then it may not be clear-cut, which means you’ll need to weigh what’s practical versus what will minimize your legal risks. A preliminary issue to resolve is whether the separation is actually a quit (job abandonment) or a termination (for violation of your attendance policy). The time frames for payment can be different for quits versus terminations; when in doubt, it’s safest to pick the shorter of the two deadlines. If the employee was normally paid by direct deposit, it’s tempting to continue using direct deposit for the final paycheck, but that may not be permitted under state law. One difficulty with direct deposit is that there is typically a delay between when you issue the funds and when they are accessible to the employee. Unless an employee specifically declines a paper check in favor of direct deposit, it’s best to assume the payment deadlines apply to the date the employee can access the funds. Here is a summary of state laws on this topic, including the need to pay out accrued vacation in some states and to provide mandatory notices in California:
Arizona:
- Terminations: Pay the final paycheck within seven working days or by the end of the next regular pay period, whichever is sooner (ARS 23-353(A)).
- Quits: Pay the employee no later than the regular payday for the pay period during which the separation occurs (ARS 23-353(B)).
- Method of payment: For quits, you can pay in the same manner you paid regular paychecks, but if the employee asks you to mail the check instead, you must do so. The statute is silent on the manner of payment for terminations, so we suggest following the same process as you do for quits.
California:
- Terminations: Pay the final paycheck immediately (California Labor Code 201).
- Quits: If the employee gives at least 72 hours of notice, pay the final paycheck on the last day of employment; otherwise you must pay wages within 72 hours. An employee who quits without giving 72 hours of notice is entitled to request their final paycheck to be sent in the mail. The date of the mailing is considered the date of payment for purposes of the requirement to provide payment within 72 hours of the notice of quitting (California Labor Code 202).
- Method of payment: The place of final wage payment for employees who quit without giving 72 hours’ notice is the office of the employer in the county where the work was performed. If employees are terminated, the place of the final wage payment is the place of termination (California Labor Code 208). Even though the California Labor Code allows employers to pay wages (including final paychecks) using direct deposit as long as the deposit is voluntarily authorized by the employee, the California Division of Labor Standards Enforcement (DLSE) takes the position that such permission during employment is automatically revoked upon a discharge or quit. According to the DLSE, the employee must provide a new authorization in order to allow direct deposit of final wages (California Labor Code 213 and the DLSE’s webpage, “Paydays, pay periods, and the final wages”).
- Payment to remote employees: To meet the payment requirements for an employee you won’t see in person, we recommend texting, calling, and/or emailing the employee to let them know that their final paycheck is available and they can either come in to pick it up or tell you where they want it mailed. If they work remotely or don’t respond, there aren’t any clear options for legal compliance. You could put the same information in a letter mailed to their last known address and hold onto the paycheck until they contact you. If the wages are unclaimed for a year, you must follow California’s unclaimed property process. An alternative approach that the DLSE wouldn’t approve of but that may be more likely to get the wages to the employee quickly is to either go ahead and directly deposit the final paycheck to the same account(s) where you deposited their regular wages, or to physically mail the paper check to the address you have on file. (Because this approach is not endorsed by the DLSE, you should discuss it with legal counsel before taking such action.) If you mail a physical check, we recommend using a service that provides proof of delivery.
- Payout of accrued vacation: All accrued but unused vacation (including time available under Paid Time Off (PTO) plans, if treated as vacation) must be paid out with the final paycheck. (“Use it or lose it” policies are not allowed in California.) You must also pay out any partial-year accruals because in California, employees “vest” in their vacation as they work.
- Notices: Besides the final paycheck, California also requires you to notify the employee in writing of their change in status and to give them a pamphlet on unemployment benefits. See our Model Form, California Notice of Change in Employment Status, and the Employment Development Department (EDD) pamphlet, “For Your Benefit – California’s Programs for the Unemployed” (DE 2320).
Idaho:
- Terminations and quits: Pay the final paycheck within 10 days (excluding weekends and holidays) or on the next regularly scheduled payday, whichever is earlier. However, upon written request from the employee to receive payment sooner, you must pay wages due within 48 hours (excluding weekends and holidays). We recommend treating a text or an email as a written request (Idaho Code 45-606).
- Method of payment: The law is silent, so we recommend paying in the same manner you followed during employment.
Montana:
- Terminations: Pay the final paycheck immediately unless you have a written policy that you will pay on the next regular payday or within 15 days of discharge, whichever is earlier. If you don’t have such a written policy and have to pay the wages immediately, you can satisfy this requirement if: (1) you pay the wages by close of business or within four hours after notifying the employee of the discharge, whichever is earlier; or (2) you mail the check and it is postmarked on the same day as the discharge. As the employer, you bear the burden of proof that the payment was mailed on time; the regulations say that proof may include a receipt issued by the U.S. Post Office showing proof of mailing (MCA 39-3-205 and ARM 24.16.7511).
- Quits: Pay the final paycheck on the next regular payday for the pay period during which the employee is separated from employment or within 15 days from the date of separation from employment, whichever is earlier (MCA 39-3-205).
- Method of payment: Pay in the same manner you have been during employment unless the employee asks you to mail a paper check.
- Payout of accrued vacation: You must pay out any accrued but unused vacation with the final paycheck. (“Use it or lose it” policies are not allowed in Montana.)
Oregon:
- Terminations: Pay by the end of the first business day after the termination.
- Quits: If the employee gave 48 hours’ notice (excluding Saturdays, Sundays, and holidays), pay wages due on the last day of employment; otherwise wages must be paid within five days (excluding Saturdays, Sundays and holidays) or by the next regular payday, whichever occurs first. These timeframes don’t apply if the employee is covered by a collective bargaining agreement that provides for payment of wages upon termination of employment (ORS 652.140 and OAR 839-001-0420). The rules are different for seasonal farmworkers and seasonal reforestation workers (ORS 652.145 and OAR 839-001-0440).
- Method of payment: Pay in the same manner you did during employment, including direct deposit, unless the employee asks you to mail a paper check (OAR 839-001-0450). Oregon’s statute on penalties for final paychecks says that for purposes of determining when wages are paid, “payment occurs on the date the employer delivers the payment to the employee or sends the payment by first class mail, express mail or courier service.” You should therefore use a service that allows you to retain a record of the date the payment is sent or delivered (ORS 652.610(2)(d)). An Oregon Court of Appeals case makes it clear that it’s the employer’s burden to pay final wages properly, so failing to make the payment or notify the employee that their paycheck is available violates the law (Wales v. Walt Stallcup Enterprises, Or App, May 2000).
- Payout of accrued vacation: Unless you previously communicated a “use it or lose it” vacation policy in writing to the employee such as in your employee handbook, you must pay out accrued but unused vacation with the final paycheck.
Washington:
- Termination and quits: Pay on the next regularly occurring payday (RCW 49.48.010).
- Method of payment: The law is silent, so we recommend paying in the same manner you followed during employment.
For additional guidance, see our Legal Guide, Final Paychecks, and members can contact your Vigilant Law Group employment attorney to evaluate your options if you run into a situation that doesn’t fit neatly into the rules for the state in which the employee works.
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