Payroll Webinar: Wage and Hour Compliance in 2021

Organize. Humanize.
Maximize.
Wage and Hour Compliance
in 2021
April 8, 2021
Vicki M. Lambert, CPP

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Today’s Speaker
Vicki is President and Academic Director of The Payroll Advisor™, a firm
specializing in payroll education and training. The company’s website
(www.thepayrolladvisor.com) offers a payroll news service which keeps payroll
professionals up-to-date on the latest rules and regulations.
With 40 years of hands-on experience in all facets of payroll functions as well as
over three decades as a trainer and author, Ms. Lambert has become the most
sought-after and respected voice in the practice and management of payroll issues.
She has conducted open market training seminars on payroll issues across the
United States that have been attended by executives and professionals from some
of the most prestigious firms in business today.
A pioneer in electronic and online education, Ms. Lambert produces and presents
payroll related audio seminars, webinars and webcasts for clients, APA chapters and
business groups throughout the country. Ms. Lambert is also a faculty member at
Brandman University in Southern California where she is the instructor for American
Payroll Association’s “PayTrain” online program.
Vicki M. Lambert, CPP

Our Focus For Today
©2021 The Payroll Advisor 7
• Must the worker be paid for that
• Tracking the hours
Hours worked
• Regular rate of pay
• Doing the calculations
• State vs federal
Overtime
• Federal
• State
Minimum wage
• Meal and rest periods
• Statements and payday notices
• Frequency and method of payment
• Posting requirements
• Sick leave
Impacts of state regulations

Overtime pay under the
Fair Labor Standards Act is
computed at 1 1/2 times
the regular rate of pay for
all hours worked in excess
of the 40 hours in a
workweek. There is no
limitation on the number
of hours an employee may
work in any workweek, as
long as they are
compensated in
accordance with the
FLSA's requirements.

But Maybe
the States
Require
Daily
Overtime…
AK: 8 hour day
CA (of course!) after 8 in a day
and double time as well after
12 and on the 7th day
CO after 12 in a
day
NV: paid a base rate of one and one half
times the minimum wage or less per
hour may be entitled to overtime if they
work more than 8 hours in any workday.

But Maybe the States
Require… Special Overtime
KY: Work 7 days in one
work week, overtime
on 7th day
OR: certain industries
only such as mills,
factories or
manufacturing (10
hour days)

Useful Definitions…
Work week:
 The workweek is a fixed and
regularly recurring period of 168
consecutive hours (i.e., seven
consecutive 24 hour periods).
 It does not need to coincide with
the calendar week, but may start
on any day at any hour that is
convenient for the employer.
Work Day:
The Portal to Portal Act of 1947,
excludes from hours worked under
the FLSA requirements any hours
for time spent by an employee
"walking, riding, or traveling to and
from the actual place of
performance of the principal
activity or activities" unless these
activities are compensable under
the terms of a contract, by custom
or by practice. The Portal Act also
excludes activities performed
before or after the employee's
principle activities in a workday.

Exceptions to Workweek
Special exception to the 40
hour workweek rules gives
fire protection and law
enforcement the option of
using ‘work periods” of 7 to
28 days.
 Optional Rule
 Called the 8/80 rule
 Overtime computed using a
designated work period of 14
consecutive days instead of 7 days
 Employees paid 1 ½ times their
regular rate of pay for all hours
worked in excess of 8 hours in one
day or 80 hours in any 14 day
period whichever is the greater
number of hours
12
©2018 The Payroll Advisor
Public Sector Workers Hospital Workers

Hours
Worked…
No matter what type of
time keeping system
employers use, problems
may arise over the correct
treatment of small
amounts of scheduled or
unscheduled time worked
or missed by employees.
Employers must pay for all
time worked and cannot
use rough estimates or
arbitrary formulas to
compute hours worked

While the FLSA requires
accurate records of hours
worked, employers are
not required to use time
clocks, timecards, or any
particular type of time
keeping system. If a time
clock is used, employers
are free to disregard
early or late punching by
employees who
voluntarily arrive early or
remain after hours, so
long as the employees
do not perform any work
during these times.
Keeping Track of
Hours Worked

Two Exceptions
 Acceptable to round employees'
starting time and stopping time to
the nearest 5 minutes, or to the
nearest one-tenth or quarter of an
hour.
 For enforcement purposes this
practice of computing working time
will be accepted, provided that it is
used in such a manner that it will
not result, over a period of time, in
failure to compensate the
employees properly for all the time
they have actually worked.
 The de minimis rule
applies only where there
are uncertain and
indefinite periods of time
involved of a few seconds
or minutes duration, and
where the failure to count
such time is due to
considerations justified by
industrial realities.
15
Rounding of Hours De Minimis or Insignificant

Rounding Example—Fact Sheet # 21
Let’s see how this works when we
use the quarter hour method by
rounding each punch using the 7-
minute rule:
8:02 = 8:00
12:10 = 12:15
1:06 = 1:00
5:05 = 5:00
16
1/4
4 ¼ hours
4 hours

Rounding Example—Fact Sheet
# 21
By determining the number or hours worked for each series of
punches the total hours worked for the workday can be calculated.
This is accomplished as follows:
8:02 am to 12:10 pm = 4 hours 8 minutes
1:06pm to 5:05pm = 3 hours and 59 minutes
This is a total of 8 hours and 7 minutes. Using the 7-minute rule the
employer would round back and the employee would be paid for a
total of 8 hours.
17

Definition of Hours Worked
The FLSA does not give a
definition for hours
worked. The closest
definition is a provision
that specifies the term
"employ" meaning "to
suffer, let, or permit to
work".

The U.S.
Supreme
Court Has
Ruled That
Hours
Worked
Include…
Any time spent in "physical
or mental exertion that is
controlled or required by
the employer."
All hours an employee is
required to give to an
employer. This includes
waiting time if it is for the
employer's benefit.
All the time during a
workweek that an employee
is required to be on the
employer's premises.

To comply with the
FLSA, hours
worked need to
include not only
hours actually
performing job
duties but also any
other hours
suffered or
permitted to work
by the employer
for the employer's
benefit.
Therefore…

Which Means…
Work not requested but suffered or permitted
is work time. For example, an employee may
voluntarily continue to work at the end of the
shift. He may be a piece worker, he may desire
to finish an assigned task or he may wish to
correct errors, prepare time reports or
complete other duties. The reason is
immaterial. If the employer knows or has
reason to believe the employee is continuing
to work, the time is working time and must be
paid.

Therefore…
In all such cases, it is the duty of the
management to exercise its control and see
that the work is not performed if it does not
want it to be performed. Employers cannot
sit back and accept the benefits without
compensating for them. The mere
promulgation of a rule against such work is
not enough. Management has the power to
enforce the rule and must make every effort
to do so. (Section 785.11, 12, & 13.)

Travel and
Other
Types of
Pay
Nonexempt employees must be paid for
travel that is outside of normal home to
work commute
On Call may have to be compensated if
employee not free to follow own needs
Meeting times may be compensatory as well
Training (required) is time worked
Waiting time: Engaged to wait or waiting to
be engaged

Travel and Other Types of Pay
Vacation, sick
pay and
holidays are
not hours
worked under
the FLSA
Nights and
weekends
are hours
worked if
worked
Meal
periods:
don’t dock if
not taken
States may have
more types such
as show up pay or
limit number of
hours that an
employee may
work

Regular Rate of Pay
 It is a calculated rate and not just the file rate
 The employer must consider many different payments
in accurately calculating the correct rate of pay for
overtime hours.
These include:
shift differential,
non-discretionary bonuses
promotional bonuses
cost of living adjustments
But don’t include:
 Reimbursements for business
expenses
 Discretionary bonuses
 Gifts, Christmas, and special
occasion bonuses
 Paid leave (vacation, sick, jury duty,
etc.)

Regular
Rate of Pay
Is an hourly rate
Employers not required to pay
employees by the hour but may
pay by the hour, piece, salary,
commission or other type of
payment
Overtime must be
computed on an
hourly basis

Regular Rate of Pay
The total remuneration for the employee (except
those excluded by law) in a workweek is divided
by the total number of hours actually worked in
the workweek.
Computation of the hourly “regular rate of pay” is
calculated as follows:

Methods for
Calculating
Overtime
28
FLSA way: This requires
calculating all the
straight time due and
adding the “overtime
premium” to reach 1 ½
the employee’s regular
rate of pay. It is used
when additional
compensation other
than straight time and
overtime hours are paid.
Example: when the
employee receives a
non-discretionary bonus.

Doing the Math…Following the Steps
First Step
• Total pay for workweek (including bonus etc.)
– exclusions = regular pay gross
Second Step
• Regular pay in step one divided by total hours
= regular rate of pay
Third Step
• Rate in step 2 x .5 then x # of hours of
overtime = premium pay for overtime
Fourth Step
• Add amount in step 1 with amount in step 3
for total gross

Now an
Example with
Numbers…
 Example
Information:
 Employee is paid
an hourly rate of
$15.00
 Works 44 hours
in the workweek

The Proper or FLSA Method…
Step 1
44 x $15.00 = $660.00
Step 2
$660.00 ÷ 44 = $15.00
Step 3
$15.00 x .5 = $7.50
4 x $7.50 = $30.00
Step 4
$660.00 + $30.00 = $690.00

So what is the
difference
between the
proper method
and the
commonly
understood
method of
calculating
overtime?

Commonly Used or Alternative
Method
40 x $15.00 = $600.00
$15.00 x 1.5 = 22.50
4 x $22.50 = $90.00
$600.00 + $90.00 = $690.00
This uses the time and a half method that most
computers use and is acceptable if the employee
does not have any additional wages that trigger the
required method—No difference. FLSA would accept
both

Example With Bonus
 Same info except employee receives $10 bonus.
Step 1
44 x $15.00 = $660.00 + $10.00 = $670.00
Step 2
$670.00 ÷ 44 = $15.23
Step 3
$15.23 x .5 = $7.62
4 x $7.62 = $30.48
Step 4
$670.00 + $30.48 = $700.48

Notice the
Difference…
Without the added bonus under the
FLSA method, both had $690 as the gross
But when the bonus is added it goes to
$700.48 under the FLSA method but only
$700.00 under the alternate method
$.48 difference than just adding in the
$10.
Result—Penalties, fines and interest for
using the wrong method

Let’s Do Another Example
A warehouse worker worked 44 hours last
week. In additional to his regular wage of
$10.00 an hour, he was paid $50.00 for
completing a job on time and on budget.
36

The Right Way (Using DOL OT Calculator)…

But What if More than
One Work Week Is Involved?
When a nondiscretionary bonus covers a period of time
longer than a workweek, it must be apportioned back
over the workweeks of the period during which it was
earned.
If it is not possible or practicable to allocate the bonus on
the basis of when the bonus was actually earned, some
other reasonable or equitable method must be adopted
(for example, allocation of an equal amount for each
workweek covered by the bonus).
The employee must then receive additional overtime pay
for each workweek in which overtime was worked during
the period.

Multiple Rates of
Pay
When an employee in a
single workweek works at
two or more different
types of work for which
different straight time rates
have been established, the
regular rate of pay for that
week is the weighted
average of all the rates.

 July 24, 2009:
$7.25
 Opportunity
wage is $4.25
per hour
 New hires under
20 years of age
 First 90 days of
employment
 Credits can be
applied towards
minimum wage
Minimum
Wage

Room and
Board
Can deduct from
wages or credit against
minimum wage the
reasonable cost of
board and lodging
furnished to the
employee
In order to use
the credit
Facility must be for
primarily for the benefit
and of the employer
Employee must accept
them voluntarily
Lodging must be
employee’s residence
on a permanent basis

Tip Credit
Federal: Employers of “tipped
employees” must pay a cash
wage of at least $2.13 per hour if
they claim a tip credit against
their minimum wage obligation.
If an employee's tips combined
with the employer's cash wage of
at least $2.13 per hour do not
equal the minimum hourly wage,
the employer must make up the
difference. Must customarily and
regularly receive more than $30 a
month in tips.
States: depends on the state.
Some allow and some don’t.
Some have standard amounts
and some have percentages.

State and Local Issues
Conflicting rules? Highest to the employee-where work is performed
Increase in Federal will increase state in some cases higher than federal
Creditor garnishments will change
City could have own minimum wage
Especially with city contracts prevailing wage San Francisco and cities in New Mexico
States could have own minimum wage

MT
WY
ID
WA
OR
NV
UT
CA
AZ
ND
SD
NE
CO
NM
TX
OK
KS
AR
LA
MO
IA
MN
WI
IL IN
KY
TN
MS AL GA
FL
SC
NC
VA
WV
OH
MI
NY
PA
MD
DE
NJ
CT
RI
MA
ME
VT
NH
AK
HI
Minimum Wage by State

Current State Minimum Wages as of
1-1-2021
Greater than federal MW Equals federal MW of $7.25 Less than federal MW No MW Required
AK - $10.34 IA GA - $5.15 AL
AR - $11.00 ID WY - $5.15 LA
AZ - $12.15 IN MS
CA - >26 employees: $14.00 <26 $13.00 KS SC
CO - $12.32 KY TN
CT - $12.00 NC
DC - $15.00 ND
DE - $9.25 NH
FL - $8.65 OK
HI – $10.10 PA
IL - $11.00 TX
MA - $13.50 UT
MD - $11.75 VA
ME - $12.15 WI
MI - $9.65
MN - $10.08
MO - $10.30
MT - $8.75
NE - $9.00
NJ - $12.00
NM - $10.50
NY - $12.50 to $15.00 will vary by county
NV - $9.00
OH - $8.80
OR - $11.50 to $14.00 differs by county
RI - $11.50
SD - $9.45
VT - $11.75
WA - $13.69
WV - $8.75
29 States + DC 14 States 2 States 5 States

Credits Against Minimum Wage
States can match federal, not allow
credit or have their own rules:
Tip Credit
Board and Lodging Credit
Meal credits

Tip Credit
Against
Minimum
Wage
States can match federal, not allow credit
or have their own rules
7 States do not allow tip credit– AK, CA,
MN, MT, NV, OR, & WA
Tip Credit:
http://www.dol.gov/whd/state/tipped.ht
m

MT
WY
ID
WA
OR
NV
UT
CA
AZ
ND
SD
NE
CO
NM
TX
OK
KS
AR
LA
MO
IA
MN
WI
IL IN
KY
TN
MS AL GA
FL
SC
NC
VA
WV
OH
MI
NY
PA
MD
DE
NJ
CT
RI
MA
ME
VT
NH
HI
Prohibit tip credit
Minimum cash wage higher than federal
Matches federal
Tip Credit Against Minimum Wage

Meals and
Lodging Credits
Against
Minimum Wage
 States can match federal, not
allow credit or have their own
rules

Credits Against Minimum Wage
For Example—CA

Youth Minimum Wage
(Training Wage)
 States can follow federal such as –
ID, IN, MI, MT, NV, UT, VT, and WY
 Have their own dollar limit: IL, MN,
PA, WI, and WV
 Or not specify one such as
California

Current Local Minimum Wage
as of 1-1-21
Jurisdiction Rate Jurisdiction Rate
Flagstaff, AZ $15.00 Albuquerque, NM $10.50
Denver, CO $14.77 Bernalillo County, NM $9.35
Cook County, IL $13.00 Las Cruces, NM $10.50
Chicago, IL $14.00* Santa Fe, NM $12.10
Montgomery County, MD $14.00* New York City, NY $15.00*
Prince George County MD $11.60 Long Island/Westchester, NY $13.00
Portland, ME $12.15 Seattle, WA $16.69*
Minneapolis, MN
St. Paul, MN
$13.25*
$12.50*
Sea Tac, WA $16.57
*limited to certain employees or
industries or employer size

Current California Local Minimum Wage
as of 1-1-21
Jurisdiction Rate Jurisdiction Rate Jurisdiction Rate
Alameda $15.00 Los Angeles City $15.00* San Carlos $15.24
Anaheim $17.00* Los Angeles County $15.00* San Diego $14.00
Belmont $15.90 Malibu $15.00* San Francisco $16.07
Berkeley $16.07 Menlo Park $15.25 San Jose $15.45
Cupertino $15.65 Milpitas $15.40 San Leandro $15.00
Daly City $15.00 Mountain View $16.30 San Mateo $15.62
El Cerrito $15.61 Novato $14.00* Santa Clara $15.65
Emeryville $16.84* Oakland $14.36 Santa Monica $15.00*
Fremont $15.00* Palo Alto $15.65 Santa Rosa $15.20*
Half Moon Bay $15.00# Pasadena $15.00* Sonoma $15.00*
Hayward City $15.00* Petaluma $15.20* South San
Francisco $15.24
Long Beach $15.47* Redwood City $15.62
Los Altos $15.65 Richmond $15.21 Sunnyvale $16.30
*limited to certain employees or
industries or employer size
# effective in 2021

Living
Wages
City, County etc. establishes a
minimum wage that must be paid
when the employer has a
contract with the entity—140+ in
the nation
Can be tied to offering health
care
Higher than state minimum wage
in most cases

California
The State
itself
Berkeley
Emeryville
Long
Beach
Los
Angeles
Oakland
San Diego
San
Francisco
San Jose
Santa
Monica
Illinois
Chicago
Cook
County
Maryland
The State
Itself
Montgomery
County
Minnesota
Minneapolis
St. Paul
Duluth
New Jersey
The State Itself
Bloomfield
East Orange
Elizabeth
Irvington
Jersey City
Montclair
Morristown
Newark
Passaic
Paterson
Plainfield
Trenton
New York
New York City
Westchester
County
Oregon
The State
Itself
Portland
Pennsylvania
Philadelphia
Pittsburg
Texas
San Antonio
Dallas
Washington
The State
Itself
Seattle
Tacoma
State Only
Arizona
Connecticut
Maine (2021)
Massachusetts
Nevada
Rhode Island
Vermont
District of
Columbia
New Mexico
Bernalillo County

Paid Family Leave
 States require employer to give
time off for paid family leave
 Paid out of state fund such as
SDI or TDI
 CA, HI, NJ, NY, RI have such
leave

Meal and
Rest
Periods
No requirement on the federal level for
either
States: State may have meal period and
rest period such as CA. Or just one or the
other such as CT which has just meal
period. Or they could not address the
issue such as such as FL, GA, LA, and ID.
Reference for meals:
http://www.dol.gov/whd/state/meal.htm

Meal Periods
 20 states have a
meal period
requirement for
adult workers
 Usually between
20 and 30 minutes
in length
 Usually without
pay
 Usually after so
many hours-
example CA is
after 5 hours

MT
WY
ID
WA
OR
NV
UT
CA
AZ
ND
SD
NE
CO
NM
TX
OK
KS
AR
LA
MO
IA
MN
WI
IL IN
KY
TN
MS AL GA
FL
SC
NC
VA
WV
OH
MI
NY
PA
MD
DE
NJ
CT
RI
MA
ME
VT
NH
HI
required meal periods for adult workers
required meal periods for minors only
No requirement
Meal Periods by State

Rest
Periods
Fully a state regulations so depends on the
state—not all have them
Usually 10 minutes for every 4 hours
worked or major fractions thereof
States with some kind of rest period
requirements : CA, CO, IL, KY, MN, NV, OR,
VT and WA (VT is a visit toilet provision)
Reference:
http://www.dol.gov/whd/state/rest.htm

Posting
Requirements
Postings: Usual suspects such as
minimum wage posters—fed requires as
do most states with a minimum wage
Payday notices (when and where) poster
Wage orders: CA, CT, CO, MA, ND, NJ, NY
& VT
Abstracts of wage and hour laws

Statements (Paystubs)
• Can be called a statement
• Commonly called a paystub
…By any other
name…
• No requirement on the federal level
Federal law
• As little as list the deductions
• As big as explain the whole check (of course CA!)
• Be careful about putting the social security number
on the paystub
42 states have
some type of
requirement

States With No Requirement
The following 9 states have no requirements for issuing paystubs or
statements
Alabama
Arkansas
Florida
Georgia
Louisiana
Mississippi
Ohio
South Dakota
Tennessee

Electronic Statements
Paper or electronic-the following states have enacted
legislation permitting electronic statements or not
forbidding them
 Delaware, Hawaii, Iowa, Maine, Minnesota (must have
computers available), North Carolina (must be
printable), Oklahoma, Oregon, Texas, and Washington
 California, New Mexico, New York and Vermont
employee must agree to it
 Michigan: must be in a retainable form

Payday Notices
 Time and place of payment, rate of pay,
benefits type notices
 Example: ID: at time of hire notification of rate of pay, and regularly
scheduled payday
 Of course—CA Anti-wage theft law

Pay Rate Notices
 19 States require that employees receive
notice of any change in pay status
 Indiana, Kentucky, Michigan, Montana, New Mexico, Tennessee, & Texas
DOL lists requirement on website
 Kansas is upon request
Alaska California Connecticut Delaware
Hawaii Iowa Idaho Illinois
Maryland Missouri North Carolina New Hampshire
New Jersey Nevada New York Pennsylvania
South Carolina Utah West Virginia

Frequency
of Wage
Payments
How often an employee is paid is a
state matter—federal just that they
must be paid
Can be as soon as weekly or as long
as monthly—South Dakota is
monthly
Exempt usually longer than
nonexempt
Usually requires employee
be paid within so many
days of the close of payroll
as well.
Example: D.C.
requires no more
than 10 working
days from close of
pay period to
payday

Permitted Payroll Frequencies
CA, CT, IA, MA,
MI, NH, NY, RI,
VT,
CA, CT, IA, IN,
LA, MA, MD,
MI, MS, *NH,
RI, VA, VT,
AK, AR, AZ, CA,
DC, GA, HI, IA,
IL, IN, KY, LA,
MD, ME, MI,
MN, MO, MS,
NJ, NM, NV, NY,
OH, OK, RI, TN,
TX, UT, VA, VT,
WV WY
AK,CO, DE, HI,
IA, ID, KS, MI,
MN, ND, OR,
SD, WA , WI
AL, FL, NC, & SC have
no regulations or do not
specify
NE & PA are designated
by the employer
MT presumed
semimonthly if no
designated
States such as CA,
IL,NJ, NM, NV, TX,
UT, & VA permit
monthly for exempt
employees
*permits biweekly as of 7-17

MT
WY
ID
WA
OR
NV
UT
CA
AZ
ND
SD
NE
CO
NM
TX
OK
KS
AR
LA
MO
IA
MN
WI
IL IN
KY
TN
MS AL GA
FL
SC
NC
VA
WV
OH
MI
NY
PA
MD
DE
NJ
CT
RI
MA
ME
VT
NH
AK
HI
Max Period Permitted for Nonexempt Employees for
Private Sector Employers
70
Weekly Biweekly
Weekly or Biweekly
Semi-monthly Either Biweekly or Semi-monthly
Monthly None specified/designated by employer

Method of Payment
• cash is acceptable so start from there!
Cash
• watch for hidden fees
• okay (must be funded!)
Checks
• can not be mandated if you force the
employee to pick a financial institution
Direct
deposit
• were gaining ground until 2013; then lost it
again in 2016: now back on the rise
Pay cards

Direct Deposit
Direct deposit can not be
mandated if you force the
employee to pick a
financial institution—
federal law and most states
Written consent is normally
required and it must be
voluntary
States can mandate for
their own employees
A few states permit it to be
done but the employee
must be able to opt out
Some states do not address
the issue

• AK, AZ, CA, CO, CT, DE, FL, GA, HI, IA, ID, IL, IN, KS, MA, MD, MN, MT, ND, NH,
NJ, NM, NV, NY, PA, RI, SD, VT, WV & WY
Voluntary
Only
• AR, OR, UT, VA
May Opt Out
• KY: must incur no expense/provided statement
• LA; ME; SC; WI: Incur no expense
• MI; WA: may require if written notice allows EE to choose payroll card
• NC: may be mandated
• OH; OK; TN: must designate financial institution
• TX: must notify employees if beginning direct deposit payment system
Involuntary:
• AL, MO, MS, NE,
No Provision

Pay Cards
States have similar restrictions
First withdrawal is free
of fees for entire
amount of paycheck
List of all fees must be
provided
Some require to be
voluntary on
employee’s part rather
than mandated
Permitted on the federal level
usually with restrictions such as
first withdrawal is free of fees and
voluntary on employee’s part

MT
WY
ID
WA
OR
NV
UT
CA
AZ
ND
SD
NE
CO
NM
TX
OK
KS
AR
LA
MO
IA
MN
WI
IL IN
KY
TN
MS AL GA
FL
SC
NC
VA
WV
OH
MI
NY
PA
MD
DE
NJ
CT
RI
MA
ME
VT
NH
AK
HI
I
Paycards permitted restrictions may apply
Permitted with restrictions & must be voluntary by employee
Paycards highly restricted
Not addressed by state
Paycards by State private Sector Employers
75

 No law on
federal level
 Can range from
immediately in
CA, especially if
discharged to the
next normal
payroll cycle for
voluntary
resignations in
NV.
 What about
vacation pay?

State Terminated Employees Voluntary Resignations
Alabama No provisions No provisions
Arizona
7 working days or end of regular pay period whichever is
sooner
Next regular payday
Arkansas Date of discharge or within 7 days of demand No provisions
California Immediately 72 hours if no notice
Colorado Immediately Next regular payday
Connecticut Next business day Next regular payday
Delaware Next regular payday Next regular payday
Florida No provisions No provisions
Georgia No provisions No provisions
Hawaii Time of discharge Next regular payday
Idaho The earlier of next regular payday or within 10 days Next regular payday
Illinois Time of separation Next regular payday
Indiana Next regular payday Next regular payday
Iowa Next regular payday Next regular payday
Kansas Next regular payday Next regular payday
Kentucky Next regular payday or within 14 days Next regular payday
Louisiana Next regular payday or within 15 days Next regular payday
Maine Next regular payday Next regular payday
Maryland Next regular payday Next regular payday
Massachusetts Next regular payday Day of discharge
Michigan
Immediately As soon as amount can be
determined
Minnesota Immediately Next regular payday
Mississippi No provisions No provisions
Missouri Day of discharge Next regular payday
Montana Immediately unless policy extends to next payday Next regular payday

State Terminated Employees Voluntary Resignations
Nebraska Next regular payday or within 2 weeks Next regular payday
Nevada Immediately Next regular payday or within 7 days
New Hampshire
Within 72 hours Next regular payday
New Jersey Next regular payday Next regular payday
New Mexico Within 5 days of discharge Next regular payday
New York Next regular payday Next regular payday
North Carolina
Next regular payday Next regular payday
North Dakota Next regular payday Next regular payday
Ohio No provisions No provisions
Oklahoma Next regular payday Next regular payday
Oregon End of 1st business day after discharge Immediate if give 48 hours
Pennsylvania Next regular payday Next regular payday
Rhode Island Next regular payday Next regular payday
South Carolina
Within 48 hours of separation or by next payday Within 48 hours of separation or by next payday
South Dakota Next regular payday Next regular payday
Tennessee Next regular payday Next regular payday
Texas 6th day after discharge Next regular payday
Utah Within 24 hours Next regular payday
Vermont Within 72 hours Next regular payday
Virginia Next regular payday Next regular payday
Washington Next regular payday Next regular payday
West Virginia Next regular payday or 4 days whichever is first Next regular payday
Wisconsin Next regular payday Next regular payday
Wyoming Next regular payday Next regular payday

Vacation Pay
and
Termination
No law on federal level
CA: Labor Code Section 227.3 considered
wages-cannot take back
MA: Considered wages and must be paid
for all earned vacation upon termination
NE: RS 48-1229: Due and payable upon
termination—even PTO
NY: If in writing can lose vacation

MT
WY
ID
WA
OR
NV
UT
CA
AZ
ND
SD
NE
CO
NM
TX
OK
KS
AR
LA
MO
IA
MN
WI
IL IN
KY
TN
MS AL GA
FL
SC
NC
VA
WV
OH
MI
NY
PA
MD
DE
NJ
CT
RI
MA
ME
VT
NH
AK
HI
I
Vacation Payout Requirements
Must payout upon termination
Depends on company policy
No provisions
80

 Federal is
lenient—
employee must
agree
 States are
different
 Example CA
and NY
Deducting from
Wages for
Overpayments

FLSA
Requirements
DOL accepts inadvertent overpayments
will occur
If the employer and the employee do not
agree that the wages were overpaid or if
employee refuses to repay the amount
legal options must be considered
If both agree the wages were overpaid
there are methods to recoup

California
Under most circumstances CA law
prohibits an employer from deducting
from an employee’s wages any debt
the employee may owe the employer.
Barnhill v. Saunders began with
withholding for a loan upon
termination
California State Employees’ Association v. State of
California extended to cover overpayment of
wages

Deducting for Advanced Vacation
California is the role
model on this one
If an employee is paid
vacation before it is
earned it is an advance
on wages if the
employee terminations
1988 the DLSE
permitted recovery
It appears that the DLSE
has now reversed its
position
Always verify vacation
rules in addition to
overpayment rules for
each state

New York
Per Section 193: Access at http://www.labor.ny.gov/formsdocs/wp/LS605.pdf

Additional Resources
• http://www.dol.gov/elaws/otcalculator.htm
Overtime
calculator:
• http://www.dol.gov/elaws/esa/flsa/hoursworked/default.asp
Hours
worked:

87
Questions?

88
How Ascentis Payroll Can Help
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organizations both control and flexibility when it comes to their
payroll operations. With our easy and intuitive web-based
system, you can complete payroll in just a few easy steps.
• Allows you to easily complete our 5-step payroll process
from one screen.
• Assists with federal, state and local tax filings, no matter
the complexities your organization faces.
• Allows employees to run as many real-time simulations as
they want in order to make the best financial decision.
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and stable payroll process.
Recruiting &
Onboarding
Talent
Management
Payroll
Time &
Attendance
Ascentis
HR &
Benefits

89
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www.ascentis.com
800.229.2713

Payroll Webinar: Wage and Hour Compliance in 2021

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