When an employer must pay your last wages after you quit or are fired, whether unused vacation counts as wages, and how to recover pay you are owed through a state labor agency or a lawsuit.
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Federal law sets the minimum wage and overtime rules but does not say when a final paycheck is due; the U.S. Department of Labor's position is that federal law only requires the wages to be paid on the regular payday for the period. The deadline comes from state wage payment laws, and they differ a great deal. Some states require payment immediately or within a very short time when the employer ends the job, with a slightly longer allowance when the employee quits without notice; others allow the employer to wait until the next regular payday. California, for example, requires a discharged employee to be paid at the time of discharge and adds a waiting-time penalty of a day's wages for each day the payment is late, up to a cap.
What counts as wages also depends on state law. Commissions and bonuses that were already earned under the terms of the plan are usually owed. Accrued vacation is treated as earned wages that must be paid out in some states, including California, while other states let the employer's written policy decide whether unused vacation is paid at the end. An employer generally cannot hold back a final check until company property is returned or make deductions the law does not allow; deductions that pull pay below the minimum wage are not allowed under federal law either.
An employee who is not paid can file a wage claim with the state labor department, which in many states investigates and holds a hearing at no cost, or with the federal Wage and Hour Division when the claim is for minimum wage or overtime. A private lawsuit is also possible; under the Fair Labor Standards Act a court can award the unpaid amount, an equal amount as liquidated damages, and attorney's fees. Small amounts can also go to small claims court. Wage claims have short limitation periods, and an employer may not punish a worker for making one (see workplace retaliation). Whether a worker is an employee at all can decide the claim (see independent contractor vs employee).
Most wage claims can start at the state labor agency, which costs nothing. A lawyer is worth calling when the amount is large, when commissions or bonuses are in dispute, when the employer says you were a contractor, when many co-workers are owed the same thing, or when you were fired after complaining. Many employment lawyers take wage cases on contingency or recover their fees from the employer under fee-shifting statutes.
Worried about the cost? A lawyer can be hired for one part of a case only (limited-scope representation), may be paid from what a claim recovers (contingency fee), or may be free through a pro bono program or legal aid; a court can also waive its own filing fees.
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