Key Takeaways
- You are entitled to receive your final paycheck, and your employer generally cannot keep or withhold it for any reason.
- When you get your final paycheck depends on the state where you worked, and the reason for separation.
- If your employer did not issue your final paycheck on time, you may have to take legal action to recover your unpaid wages.
Leaving a job is stressful enough. If you quit with notice, you wonder if they’ll let you work the rest of your notice period or ask you to leave right away. And, if you’re fired, you’re anxious about what comes next. No matter how you leave, though, there’s one thing you shouldn’t have to worry about: getting your final paycheck. Below, I answer the questions I hear most often about final paychecks and walk you through your options if yours hasn’t shown up.
What is a final paycheck?
What is a final paycheck?A final paycheck is the last paycheck you can expect to receive from your employer. It should include all the wages you earned through your last day of work. But, depending on where you worked, it may not include any unused vacation or paid time off (PTO). That’s because, in some states, it’s not illegal for employers to pocket your unused vacation or PTO. So many don’t pay it out when you leave the company. In Texas, for example, employers only have to pay out unused vacation or PTO when you leave a job in two situations:
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if you have a written contract with the employer that says it will convert the value of unused time off to cash, or
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when your employer has a written policy that says it will pay out the value of unused time off upon separation.
If you’re an at-will employee and your employer never had a written policy, then paying out unused PTO is up to their discretion.
Other states have more employee-friendly rules. Take California, for example. It’s illegal in California for your employer to not pay out your unused PTO or vacation. It doesn’t matter if you quit, or were fired: your employer still has to pay it out.
How much is a final paycheck?
Now that you know what should be in your final paycheck, the next question is how much it should actually be. That depends on whether you’re paid hourly or on salary, and the math works a little differently for each. If you were paid hourly, your final paycheck amount should equal the total amount of hours you worked multiplied by your pay rate. Let’s say you worked 30 hours during your last week of work, and earned $20 per hour. Your final paycheck should equal $600 before taxes.
30 hours worked × $20 per hour = $600
But if you’re salaried the rules are different. Federal law allows employers to skip paying your full salary in your last week of work. When that happens, your employer may pay you a proportionate part of your salary. That share has to equal the time you actually worked in your last week of employment. It can’t be less. So let’s say you earn a salary of $65,000/year. Your salary would be converted to an hourly rate. That comes out to about $31.25/hour. Your employer can then take the $31.25 hourly rate and multiply it by all the hours you actually worked. If you worked 30 hours your last week of work, your final paycheck should be $937.50 before taxes.
- Step 1: $65,000 ÷ 2,080 hours (40 hours/week × 52 weeks/year) = $31.25/hour
- Step 2: Take the hourly rate and multiply it by the hours you worked during your last week on the job. Using our example, that would be $31.25 x 30 hours = $937.50 before taxes.
So, instead of getting your usual paycheck of $1,250 for your final week of work, you’d get $937.50.
When is a final paycheck due in Texas?
Once you know what you’re owed, the next thing to figure out is when and how you’ll get your final paycheck. Most states have rules that make the deadline to cut your final paycheck dependent on whether you left on your own accord, or were asked to leave. In Texas, for instance, if you quit or resigned then your employer has until the next scheduled payday to issue your final paycheck. That’s so even if you resign without “proper” notice.
But if you were fired, laid off or involuntarily separated from the company then you Texas law gives your employer 6 calendar days to cut your final paycheck.
Can a company withhold your final paycheck?
No. It’s illegal for your employer to withhold your final paycheck for any reason. It’s your money, and your employer is required to pay you on time and in full.
Your employer can, however, deduct money from your final paycheck. But it has to follow very strict rules for doing so. If the deduction isn’t required by law, which is the case with child support or tax liens, then your employer can only deduct it if you’ve given the company written permission to do so before it made the deductions. If not, then withholding your pay is illegal.
How to get my final paycheck from my employer in Texas?
If money is missing from your final paycheck, or you haven’t been paid at all and the deadline has passed, here’s what you can do.
Start by raising the issue directly with your employer. They may have simply forgotten, or may not be aware of the legal deadline. Reach out in person if you can, but always follow up in writing in case you need it as evidence later.
If your employer still refuses to pay what you’re owed, you have at least two options. You can file a wage complaint with the labor board, or you can reach out to a wage and hour lawyer for help. The right lawyer can walk you through your options and help you decide whether pursuing a claim in court or through the labor board makes the most sense in your situation.
Getting stiffed on your final paycheck is frustrating and, frankly, it’s illegal. But you have rights, and options to recover your pay. If you need help figuring out next steps, reach out.
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