What are the rules on final paychecks in Oregon?

Oregon’s final paycheck rules make it clear when an employer should issue final paychecks to departing employees. Whether a worker has quit or has been let go, final paycheck law should provide a clear legal process to ensure employees are paid properly.

Many employees will wonder whether an employer can make deductions from their final paycheck or be concerned they might lose unpaid vacation when they quit. Understanding these rules should provide clarity on the rights an employee has, no matter how they leave their employer.

When should a final paycheck be paid in Oregon?

When an employee is let go or leaves an employer by mutual agreement, the final paycheck should be paid by the end of the first business day after they leave the company.

If an employee quits, when the final paycheck should be paid depends on how much notice the employee gives their employer:

• When the employee gives more than 48 hours’ notice, then the final paycheck should be paid on the final day of work. If the final day is a weekend or holiday, it should be paid on the next working day.
• If the employee quits with less than 48 hours’ notice, the final paycheck must be paid within five business days, excluding weekends and holidays, or at the next regular payday if that occurs first.

Employees who earn a sales commission should receive their final paycheck within the same deadlines, unless their commission agreement states that it will not be paid until the employer receives payment for the related sale.

What can an employee do if an employer doesn’t pay their final paycheck?

If an employee believes they haven’t been paid their final paycheck on time, they can make a claim with Oregon’s Bureau of Labor and Industries, Wage and Hour Division. Their complaint will be investigated and they might be able to recover their unpaid wages, as well as their costs.

Oregon law says that if a final paycheck hasn’t been paid properly, an employer may also have to pay a “penalty wage” to the employee. If the paycheck is late, a court can order the employer to pay wages for up to 30 days at the employee’s usual daily rate, starting from the day they leave the company until the final paycheck is paid.

Can an employer make any deductions to a final paycheck in Oregon?

A final paycheck should include all earned wages that the employee has not yet received and there are only specific circumstances where an employer is allowed to withhold any wages. In Oregon, an employer is allowed to make deductions from a final paycheck when:

• It is legally required to do so (such as for taxes)
• The employee has given written consent for the deduction and the deduction is not for the employer’s benefit (for example, for an employee savings plan)
• The deduction is for a charitable donation
• The deduction is related to dues for a labor organization
• The deduction is related to repayments for a loan agreed between the employer and employee
• The deduction is authorized by a collective bargaining agreement that an employer is part of

Should unused vacation pay be included in the final paycheck?

An employer in Oregon is not required to offer any vacation days to its employees. However, if it does provide vacation as part of its employment agreement, it is required to honor its own policies when an employer leaves. This means an employee’s final paycheck should include payment for the unused vacation they are entitled to if their contract says it should.