The two-week notice: Dread it or celebrate it, it\u2019s the universal symbol that an employee is about to begin another venture in life.<\/p>\n
As a business owner or human resources manager, saying goodbye and making a deal to stay in touch isn\u2019t the last of your responsibilities with this employee. The duty at hand now becomes calculating their final paycheck. The same goes for a terminated employee-they still need to be compensated for the final hours clocked at your company.<\/p>\n
According to the DOL<\/a>, employers are not required by\u00a0federal<\/em>\u00a0law to give employees their last paycheck immediately.\u00a0However,\u00a0state<\/em>\u00a0regulations differ for things like accrued paid time off and sick leave, so checking your specific location\u2019s law is the best place to start. For instance,\u00a0in California<\/a>, an employer must include all elements of pay owed, including commissions.<\/p>\n As you can surmise, it\u2019s not so cut and dry when it comes to determining the right way to handle a final paycheck.<\/p>\n What if an employee only worked five days of their last 15-day pay period? The following is a best practice:<\/p>\n Under the Fair Labor Standards Act, a company may make deductions from an exempt employee\u2019s salary for the employee\u2019s initial or terminal week of employment if that employee doesn\u2019t work the full week.<\/p>\n To determine the amount of the daily salary to be deducted for full-day absences or more, the calculation must be based on the\u00a0usual number\u00a0of workdays scheduled to be worked by the exempt employee in a workweek. That number is then divided into the pro rata monthly salary attributable to a week.<\/p>\n To break it down:<\/p>\n According to SHRM, under federal regulations, an employee\u2019s last paycheck should include compensation for all time worked. Nonexempt employees must be paid at least minimum wage for all regular hours. Exempt employees\u2019 final paychecks shouldn\u2019t reflect extra deductions for discipline or property violations.\u00a0<\/p>\n As you part ways with your former colleague, your work is not quite done. Evaluating their final paycheck so that it complies with the law should be one of the last things on your employment cycle to-do list. Look into your specific state\u2019s regulations first and determine the best course of action from there.<\/p>\n PrimePay can partner with you to offer support throughout the entire employee lifecycle. Learn more about how PrimePay can help you streamline Payroll & Human Resources processes.<\/p>\n\n
Hand it Over to a Payroll Provider<\/h3>\n