Risky Business: Disciplining Employee with Paycheck

Do these two policies look familiar to you? Do they resemble policies you’ve seen in employee handbooks, or which might be in your employee handbook?OLYMPUS DIGITAL CAMERA

  • “Terminated employees will not be given their final paycheck until they have completed the exit interview and have returned all property belonging to the employer.”
  • “Payday is every Thursday. However, if you are repeatedly absent on Friday, your paycheck may not be issued until Friday.”

Disciplining employees by attaching strings to their paychecks is a common practice among some employers. After all, what better way to discipline employees than by putting their paychecks at risk? But the actual risk is to the employer.

Take a look at these examples:

First example: Most states have statutes specifying when terminated employees must receive their final paycheck.

As a general rule, employees who are fired or laid-off must be paid on their last day of employment, shortly thereafter, or on the next payday, and employees who voluntarily terminate their employment must be paid on the next regular payday. (Check state law for the exact rules in your state.)

Holding an employee’s paycheck until all property belonging to the employer is returned, or until the exit interview is complete may be a violation of your state law.

Second example: Employers who have trouble with Friday absenteeism, especially when Friday is the day after payday, may try to coerce employees into work by changing their payday. But once you designate a day as “payday,” it’s best to adhere to this policy. Or, if you want to change the payday, change it for all employees in the same class.

Most states require employers to pay employees at a specified frequency (weekly, biweekly or monthly) and on a designated payday which occurs at consistent intervals. Usually, the only time an employer can have different paydays, is with different classes of employees. Example: Executives are paid once a month, sales staff twice a month and hourly employees weekly.

Be careful how you treat payment of wages and payday. Know your state law. Most states regulate how you must treat the payment of wages, the frequency of wage payments, deductions from wages and the wages paid to terminating employees. An employee’s pay is sacred to them. State labor departments tend to support this view.


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