Handling Final WagesThe Fair Labor Standards Act (FLSA), which establishes federal minimum wage and overtime laws, does not require that employers give departing employees their final wages immediately. In general, however, wages covered by the FLSA must be paid by the next regularly scheduled payday. So, if a former employee has not been paid by the next regularly scheduled payday, he or she can rightfully contact the U.S. Department of Labor for assistance in recovering final wages. Unlike federal law, most states have detailed rules on final wages.

State Law at a Glance

Final paycheck rules vary by state. In Maine the employer must pay wages plus any vacation pay due by the next regular pay day after the job ends (not more than two (2) weeks). The terminated employee must go in person and request their pay on or after the regular pay date. If the employer will not pay, the employee can file a complaint with the Maine Department of Labor, Wage and Hour Division (207-623-7900, TTY Maine relay 711).

Other factors may influence when final wages are due, such as the employee’s industry and whether or not the worker is seasonal. State law also may dictate how final wages should be paid and whether direct deposit is acceptable for making that payment.

Ordinarily, final wages include any payment owed to the employee at the time of his or her departure. To know what constitutes final wages in your state, consult the state labor department. In Texas, final wages include regular and overtime wages, vacation pay and other fringe benefits, severance pay due under a written policy, and any bonuses or commissions payable under a written or oral agreement.

Even if state law does not require payment of fringe benefits, employers should honor any agreements made, as the employee can file a lawsuit to recover unpaid benefits.

No State Law? Then Company Policy Rules

As noted, whether or not certain types of payments should be included in final wages may depend on the company’s written policy. This is also true if the state has no statute regarding final wages, in which case, company policy governs. For example, company policy may say that employees who resign must give at least two weeks’ notice to receive a payout of their accrued vacation.

You cannot withhold final wages simply because state law does not specify how they should be handled. Separated employees must receive any wages owed to them.

Also, it’s important to know which deductions you’re allowed to make from final wages. Under federal law, legally required deductions, such as payroll taxes and wage garnishments, can be taken from final wages, even if they cut into the federal minimum wage. The state may have specific rules about the types of deductions that cannot be taken if they will cause the employee’s wages to fall below the minimum wage.

Call us today for additional guidance about the many rules for handling final wages.
1-800-734-6880

A Bit more Information About Wages in Maine

As of January 1, 2018, Maine minimum wage is $10.00 per hour.

  • Maine does not have a training wage or student wage below the minimum.
  • Tipped employees must be paid a direct wage of at least $5.00 per hour. If this rate plus tips for the week does not average the minimum wage, the employer must pay the difference.
  • Employees receive overtime pay of 1½ times their hourly rate after 40 hours of work per week. This applies to most employees. A poster stating these requirements must be shown in the workplace.
  • Executive, administrative or professional employees are exempt from minimum wage and overtime if they are paid on a salary basis. The salary amount must be at least $576.93 per week.
  • Employers must pay wages in full to employees on an established day or date at regular intervals not to exceed 16 days.
  • Employees must be paid for the work performed. Employees who leave a job must be paid in full within a reasonable time.
  • Employers cannot deduct from an employee’s pay for things such as broken merchandise or bills not paid by customers.
  • Employers may not discriminate on the basis of gender by paying a rate less than the rate paid an employee of the opposite sex for comparable work.
  • Most of the wage laws do not apply to agriculture.
  • Employees must be notified of a decrease in hourly wages or salary at least one day prior to the change.
  • Employers may not discriminate against an employee for inquiring about, disclosing, comparing or otherwise discussing the employee’s wages with others.

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