Tips for Employers

When an employee leaves—whether they quit or are terminated—you need to know the rules for final paychecks. In many states, employees who quit must be paid by the next payday, but terminated employees may need their paycheck immediately.

Federal law prohibits withholding wages, meaning all hours worked must be paid, along with any accrued benefits required by state law. For example, California requires payment of unused vacation time. Failing to comply can trigger steep penalties. In Arkansas, failing to pay a terminated employee on time could result in double the wages owed. With laws varying state by state, it’s essential to know your obligations. A bookkeeping partner can help ensure compliance and protect your business.