Final Paycheck Laws by State in 2025

The final paycheck is a crucial part of the employee offboarding process and can have a lasting impression on how former employees reflect on their time with your organization. Employee separation rules vary by state, but employers must know when to pay final paychecks and what must be included in order to stay compliant.

Some states require final paychecks to be paid out immediately on the date of termination, while others permit payment on the next regularly scheduled payroll. Employers in certain states may be required to pay out accrued but unused paid time off (PTO) with the final check. Let’s explore each state’s final paycheck law so you can comply with confidence.

What are final paycheck laws?

Final paycheck laws dictate the timing and contents of an employee’s last payment after termination, whether voluntary or involuntary. The type of termination can influence the pay date. And while state laws vary, they generally establish a timeline for payment and outline what’s included, such as bonuses, overtime and unused vacation time. Noncompliance can lead to penalties, fines and even lawsuits.

Common employer rules on final pay

Let’s look at the most common employer rules to consider when issuing an employee’s final paycheck.

Termination types that impact final pay

Firing

Being fired means an employee has been terminated, most often for cause, by their employer for a reason other than a layoff, such as poor performance, misconduct or an unauthorized absence from work.

Layoff

A layoff is a termination type initiated by an employer for reasons outside of an employee’s control. It usually occurs due to a change in business direction, restructuring or poor business performance.

Resignation

A resignation is a voluntary termination that is initiated by the employee. This is usually due to another job opportunity, the work environment or personal reasons such as relocation.

How termination types impact final pay

Employers must issue the final paycheck immediately, within a few days or on the next regularly scheduled pay date, depending on the state. The Fair Labor Standards Act (FLSA) mandates that employers pay all due wages on the next regularly scheduled pay date, but some states have their own final paycheck laws.

For example, in Arizona, if an employee is terminated (fired or laid off), they should be paid their final wages within seven working days or on the next regularly scheduled payday, whichever comes first. However, if an employee in Arizona resigns, they should be paid on the next regularly scheduled payday.

What must be included in a final paycheck?

An employee’s final paycheck should include all wages through their last working day. Usually, this means earned wages, overtime and bonuses. Some states require employers to pay out unused vacation time at the time of separation, but this varies from state to state.

For example, California requires employers to pay all wages immediately after involuntary termination. In California, “all wages” means any earned but unused vacation time, but employers are not required to pay accrued sick leave. An employee who quits without giving prior notice must be paid their wages within 72 hours, but if the employee gives at least 72 hours’ notice, the final wages must be paid at the time of resignation.

Unreturned equipment

An employer cannot deduct pay from an exempt employee’s final paycheck to cover the cost of unreturned equipment, or withhold an employee’s paycheck in anticipation of equipment being returned. However, depending on the specific circumstances and state wage deduction laws, an employer may be permitted to deduct the cost of equipment from a non-exempt employee’s final paycheck. Some states only allow these types of deductions if the employer has prior written consent from the employee, while others may require an advance notice period as well.

Final paycheck laws by state in 2025

Use this table to understand the final paycheck laws for each state in the U.S.

States without final paycheck laws

States without final paycheck laws follow federal FLSA guidelines, which permit employers to issue the final paycheck on the next regular pay date, rather than requiring immediate payment. These states are:

• Alabama
• Florida
• Georgia
• Mississippi
• Missouri

Final pay vs. severance pay

Final pay means all wages, including regular pay, overtime, bonuses and commission that an employee earned through their last day of employment. Final pay may also include unused vacation time, depending on the state. Severance is an additional payment that is paid to employees, sometimes on their final paycheck or in the following months, as per the agreement between the employer and employee. It is usually paid in the case of a termination, layoff or as part of a union agreement, but it is not required by federal or state laws.

What happens if an employer does not pay the final paycheck on time?

Employers that fail to comply with final paycheck laws can face penalties, fines, interest on unpaid wages, wage claims and even lawsuits. Some states may require employers to pay double or triple the amount of owed wages if they do not issue the final paycheck in a timely manner. For example, California employers that deliberately delay paying final wages may owe a waiting time penalty equal to the employee’s daily wage for each day the payment is late for up to 30 days.

How to ensure employees receive their final paycheck on time

Employees are entitled to have all of their owed wages paid by the state or federal deadline. To help ensure timely payment:

• Understand your applicable state laws. Not all states require employers to pay final wages immediately, so it is important to know your state’s deadline.
• If your state does not have a final paycheck law, employee wages are due on the next regularly scheduled pay date per the FLSA.

Paycom’s payroll software ensures your people get paid accurately and on time — every time. And with our Employee Self-Service^® software, you can allow terminated employees to view certain information in a limited view, including pay stubs, tax forms and the date of their final paycheck.

FAQ

Do final paychecks apply to all types of terminations?

Yes, final paychecks are applicable to both voluntary and involuntary terminations. The timeline for the final paycheck may vary depending on the type of termination.

Can my employer make deductions from my final paycheck?

State laws differ, but usually, an employer can make federal and state mandatory deductions from your final paycheck.

Where can I check my state’s final paycheck laws?

You can check your state’s labor department’s official website for information specific to your state.

How long can a company hold your last paycheck?

While the deadlines vary by state, the FLSA requires employers to pay the final paycheck by the next regularly scheduled pay date.

Does a final paycheck have to include unused PTO?

Depending on the state, a final paycheck may include unused PTO.

Does a final paycheck include bonuses?

Yes, a final paycheck includes all wages, such as regular pay, overtime, commission and bonuses.

What is the difference between last pay and final pay?

Last pay means the most recent paycheck an employee received for their work. Final pay means the last paycheck an employee will receive after their employment ends.

What happens if I don’t get paid 72 hours after I quit?

In the state of California, the final paycheck must be paid within 72 hours of quitting. An employee who quits without giving prior notice must be paid their wages within 72 hours, but if the employee gives at least 72 hours before quitting, the final wages must be paid at the time of quitting.

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