Wage & Hour Laws -- Employee
When Is the Final Paycheck Due When an Employee Quits Under Indiana Law?
When an employee quits or resigns from a job, it’s usually a complicated situation. From wrapping up ongoing projects to parting ways with coworkers to managing the administrative logistics of exit interviews and the final paycheck, it’s easy to overlook some of the details.
Some rules and regulations are at a company’s or employer’s discretion, while others are a matter of federal, state, and local laws and regulations. An employee who knows what to expect and what their rights are under the law will help ensure they get the proper compensation they deserve.
When Should an Employee Receive Their Final Check?
The issue of the final check is, understandably, an important one to a departing employee. Fortunately, Indiana employment law provides guidance on when an employer must pay out that last check and what amount the employee must receive.
Under Indiana state law, namely the Wage Payment Statute, employers must pay an employee’s final paycheck on or before the next scheduled payday they would have typically received their pay. This is the same whether the employee quits or is terminated.
An employee who leaves their position voluntarily has additional timelines to track, however. For example, if an employee quits and has to relocate for a new job, their employer may have additional time to send the final paycheck beyond the next regular payday requirement. If the employer doesn’t know the employee’s new address, the law allows them to wait to send the final paycheck until they receive the address, or they must provide the check within 10 business days of the employee making a demand for it.
An employee can also try to submit a request for earlier payment. It’s best, and often required, that the employee makes a written request for earlier delivery of their final check. Under Indiana employment law, however, employers are not necessarily obligated to grant these requests. When an employee quits and leaves on good terms, it can help increase the odds that a company will work to give them their final paycheck before the deadline.
These rules remain true whether an employee gave at least two weeks’ notice before they left their job or quit with no notice.
What Can an Employer Deduct From A Final Check After an Employee Quits?
Final paycheck laws also consider the amount that an employee must receive. For example, after an employee quits, they may wonder if they will receive payment for any unused sick days or vacation time. Here, state law generally considers provided vacation days a form of compensation that an employee may be entitled to when they leave the job. However, there can be specific conditions an employee has to meet before they’re eligible for this kind of pay. In addition, employers can modify this general rule in an employment contract or through company policy. That means whether you are entitled to compensation for unused vacation time can depend on the employment contract you signed when you were first hired and company policies. By default, however, an employee is entitled to pay for unused vacation time in Indiana.
Employers may also make a few specific deductions for an employee’s final check, including:
- Insurance premiums
- Repayment of a loan
- Labor union dues
In order for these deductions to occur, however, both the employee and the employer must have agreed to the deductions in writing. Other deductions, like reparation for damaging company property, may need to be billed separately and not directly deducted from the final paycheck.
How Can an Employee Dispute a Missing or Incorrect Final Check?
If an employee has not received their final check by their next scheduled payday, promised vacation pay wasn’t included in a check, or improper deductions were taken from a paycheck, final paycheck laws by state and federal government offer some remedies. An employee can file a complaint with the DOL Wage and Hour Division, which will open an investigation for the employee. Or, if an employee prefers, they can go through the IDOL as well.
It may help an employee to contact a labor attorney who has experience dealing with state wage and hour claims to help with the case. The lawyer can help file complaints, analyze evidence, and represent the employee if the case goes to a trial or negotiations, which may increase the chances an employee gets everything they deserve. In some cases, labor violations can require an employer to make additional payments to an employee, like interest and attorneys’ fees.