Final paycheck rules when you leave a job
Federal law requires only that the final check reach at least the minimum wage and include overtime for all hours worked. Everything else, the deadline, accrued vacation and the treatment of deductions, is state law, and states vary widely.
Deadlines
Most states set a specific window. Shortest end: on the last day in some states, within 24 hours in a few, and within 72 hours in California for an employee who quits without notice. Where an employee is fired, the deadline is commonly the day of termination or the next business day. Where the employee resigns, states are more generous, often the next payday or within one to three weeks.
Accrued vacation
- States that treat vacation as earned wages must pay out what accrued, on the final check, at the rate it accrued.
- States that treat it as a discretionary benefit do not require payout unless a contract or handbook promises it.
- A use it or lose it policy is enforceable only where the state allows it, and some states permit forfeiture only with notice in advance.
Unlimited paid time off is the hard case. With no accrual there is nothing to pay out, and most states have accepted that, though a few have pushed back where the balance was tracked anyway.
What may be deducted
| Deduction | When it applies |
|---|---|
| Unreturned equipment | Usually yes, often at replacement rather than book value |
| Cash shortage | Common, rarely without limits |
| Signing or relocation bonus clawback | If the agreement is written and specific |
| Training costs | If a written agreement names the amount and the period |
| Draw against commission | Only to the extent of commissions already advanced |
If it is late
Several states impose waiting-time penalties that accrue a day of pay for each late day up to a cap, which can dwarf the amount owed. Where a penalty exists, it usually requires a written demand first, so send one and keep the date.
Before you sign anything
Release agreements are common at exit and often waive everything including unpaid overtime. Read the amount against what you think is owed, and confirm the pay period covered before signing.