PA Employment Refresher: Separated Employee's Last Paycheck

When employees separate from an employer, whether amicably or otherwise, it is important for employers to understand the state and local laws relating to when and how the separated employee gets paid. This blog focuses on Pennsylvania. With that being said, most states have their own statute on this precise issue. Prudent employers will confirm within each state they operate to ensure compliance.

LET’S BEGIN AT THE TOP…EMPLOYERS MUST HAVE REGULAR PAYDAYS…

Pennsylvania employers must set out designated paydays for their employees. This is usually set out in a Payroll Policy in the Employee Handbook. The Pennsylvania Wage Payment and Collection Law (PWPCL) directs employers to pay employees on “regular paydays designated in advance by the employer.”

Now, when an employee leaves the company or is terminated, PWPCL directs employers with extremely clear language:

Whenever an employee separates from the payroll, or whenever and employee quits or resigns from employment, the wages or compensation earned shall become due and payable not later than the next regular payday…

So, if an employee quits/resigns/fired, employers can pay the prorated amount on the next regular payday in accordance with company policy. Of course an employer can choose to pay the separated employee earlier- just not later.

WHAT IS THE LIABILTY ON THIS?

Employers who violate this provision can be exposed to liquidated damages and attorneys fees. Pennsylvania, along with most other states, take wages payment violations extremely seriously.

BOTTOM LINE

Prudent Pennsylvania employers will set out clear policies to their employees on payroll, and follow the policies even for separated employees.