What state rules apply to paying wages?

Of all the phases of the employer-employee relationship, none is more important to the worker than wages. Practically all employers recognize the workers' right to wages earned and make payment in accordance with contract or practice.

Most states have wage payment or wage collection laws to protect workers against employers who fail to pay wages regularly, do not pay in full or do not pay at all. No uniform pattern exists in the state laws. Some regulate broadly and pertain to all employees; others apply only to employees in certain industries or to employers hiring a specified number of employees.

State laws deal with:

• The types of employers covered by the rules and regulations;

• The required frequency with which wage payments must be made;

• The acceptable media of payment;

• The maximum permissible interval between the end of a pay period and the payday for that pay period; and

• The time within which a final wage payment must be made to an employee who is discharged or laid off or who quits or goes on strike.

Timing of payment. Advance notice of regular paydays is required in most states. Frequency of payment may be weekly, bi-weekly, semi-monthly, by agreement or by demand of the employees for compliance with the statutory standards. Holdover periods to enable payroll computation-a term used to describe the time lapse between the end of the pay period and the payday-vary.

The laws of most states provide for immediate payment of wages upon discharge of an employee. Workers who quit must be paid within a certain time upon demand under some laws and may be paid on the next regular payday under others. A number of laws provide that strikers be paid on the next regular payday, while employees absent on payday must be paid on demand.

Method of payment. Wages are normally required to be paid in lawful money or negotiable check, payable on demand and without discount. In some states, employers who pay by check must furnish satisfactory proof of their financial ability to meet the checks issued. Payment in script is usually unlawful unless the script is redeemable in cash upon demand. A growing number of states make provision for the development of electronic fund and other direct deposit systems (see ¶36,450 How do direct deposit pay programs work?).

Payroll deductions. State laws also regulate payroll deductions. Common provisions generally prohibit deductions unless required or authorized by state or federal law, or unless they are authorized in writing by the employee. Some states do specifically provide for deductions for health insurance, charities and union dues. Also, some laws specifically state that the deduction be for the employee's benefit. Another common provision prohibits deductions for the cost of medical examinations required by an employer as a condition of employment.

Statement of deductions. In some states, an employee must be told of the deductions that are made from each wage payment (this is not to be confused with the annual wage and tax statements that most states require for income tax withholding purposes). Other states require that such information be given to employees only at monthly or other stipulated intervals.

Payment of deceased employees' wages to survivors. Statutory provisions in most states limit the amount of unpaid wages that an employer may pay to the surviving spouse or family of a deceased employee. There may be dollar limits on such payments as well as restrictions on who can be the recipient of the unpaid wages.

Enforcement of wage payment laws. In about half the states, the Commissioner or Director of Labor is given specific authority to enforce the wage payment law. In some states, the Commissioner has authority to take assignment of wage claims from employees and to sue on them in the courts. Employees may also sue to recover additional sums as penalties to reimburse them for loss of time and money in collecting their wages. Court cost and attorneys' fees are allowable in suits by employees and by the Commissioner of Labor in some states. Fines and imprisonment, or both, for violations are usually provided.

Go to State Laws for state-by-state summaries of state wage payment laws.