Since the pandemic, more than 10.4 million businesses have been started, a record-breaking amount. Over 5 million businesses started in 2022 alone. With the boom of small businesses comes the need for new business owners to learn to navigate various employment law issues.
A time may come when you either need to separate from an employee, or an employee resigns their position. When that happens, it is important to be aware of your obligations to provide the employee’s final paycheck in a timely manner.
When a Final Paycheck is Due in Utah
Both Federal and State laws specify when an employee should receive their last paycheck. Federal law requires employers to issue a departing employee’s final paycheck on or before the regular payday for the last pay period. States that do not have labor laws regarding final paychecks are required to follow Federal law.
However, Utah Labor Law, Rule 34-28-5, states that when an employer separates (whether by firing or a layoff) from an employee, the employer must pay the employee’s wages within twenty-four hours of the time of separation. This is considered satisfied if the employer mails the final paycheck with a postmark with a date that is no more than one day after separating from the employee. They may also fulfill the final paycheck by initiating a direct deposit of the wages owed into the employee’s account, or hand delivering the final pay to the employee within that twenty-four-hour period.
If an employer fails to pay wages to an employee within twenty-four hours of separation, the wages or salary of the employee continue to accrue from the date of separation until the final wages are paid. This penalty may not exceed sixty days.
Under Utah law, when an employee has voluntarily resigned, the final paycheck is due and payable on the next regular payday.
Exceptions to the Final Paycheck Rule
There is an exception to Utah’s final paycheck law, but only if you have a commission-based employee who has custody of accounts, money, or goods belonging to the company/employer. The final paycheck for a sales agent employed on a commission basis is subject to an audit by the employer to determine what wages are due to the employee.
There is also an exception for employees with written employment agreements that provide for particular terms of payment.
Wage Claim Grounds
If you have found yourself in a position where you have not paid your employee within the lawful time frame, they may have grounds to file a wage claim. Wage claims may be filed with the Utah Labor Commission. A Wage Claim form may be printed, mailed, or filled out digitally on their website. Once a Wage Claim has been submitted to the Utah Antidiscrimination and Labor Division (UALD), a case number and copy of the claim will be provided to the individual filing the claim. A copy will be sent to you, as the employer, along with an Employer Response Form. You will then have ten business days to complete the Response Form and provide any supporting documents or evidence. If you are unable to gather the necessary evidence or documents in that time frame, you may request an extension of time.
Upon completion, the employee will then have the opportunity to file a response. Once the assigned Investigator receives all the information provided, they will then issue a Preliminary Finding. Upon receiving the Finding, a request for a hearing may be made. If a hearing request is not received within ten days, an official Order will be made.
Clyde Snow’s Labor & Employment Group is here to help with all your wage and employment issues. For more information or any questions regarding Wage Claims or any other employment matters, you may contact us any time at 801-322-2516 or info@clydesnow.com.
Key Takeaways
- Federal law requires final paychecks to be paid on the regular payday for the last pay period when an employee leaves a job.
- Utah law requires final paychecks to be paid within 24 hours when an employer separates from an employee. This can be done via direct deposit, mail, or hand delivery.
- If the final paycheck is unpaid within 24 hours in Utah, wages continue accruing up to 60 days.
- For resignations in Utah, final pay is due on the next regular payday.
- There is an exception for commission-based employees in Utah to allow time for an audit.
- Employees can file a wage claim with the Utah Labor Commission if not paid properly.
- Employers get 10 days to respond to a wage claim and provide evidence.