How to Comply with Utah’s Final Paycheck Law

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Utah’s final paycheck laws require employers to pay an employee’s final paycheck within 24 hours in some cases. Additionally, employers must pay an employee everything owed to them by the next payroll cycle, even if the employee quits. 

Companies need to understand the Utah final paycheck law so that they comply with state regulations for employee pay. Failure to follow this law can result in legal action against the company, which can become much costlier than paying the employee their earned wages. 

The Details of Utah’s Final Paycheck Laws

The Utah final paycheck law was enacted in May 2018 and can be found in Title 34 of the Utah Code. The law covers employees who have resigned, been terminated, or have been separated from payroll for another reason. 

Specifically, the Utah final paycheck law states that employers have 24 hours in which to pay an employee after leaving the company. This payment can either be made in person at the place of employment or can be sent via check postmarked within 24 hours of the employee’s resignation or termination. Alternatively, employers can direct deposit the employee’s last paycheck within 24 hours.

Not all situations fit into these guidelines. For instance, Utah makes an exception for employers giving a commission-based employee a final paycheck. The commission-based portion of an employee’s wages do not need to be paid in their final paycheck until the employer conducts an audit or verification of the employee’s sales. 

Also, employees who leave their job due to an industrial dispute are not required to be paid within 24 hours. Instead, the employer must pay them no later than the next payday. Employees who have been suspended as the result of an industrial dispute must also receive their earned wages prior to the suspension by the next payday. 

Frequently Asked Questions About the Utah Final Paycheck Law

Utah businesses must comply with the Utah final paycheck law. Referencing Title 34 of the Utah Code is a good place to start to ensure that your business meets the requirements set forth by the state. However, consulting a labor law attorney can give you additional guidance in the case of unusual or complex situations.

The following might address some of the basic questions you have.

What Happens If You Miss the 24-Hour Window in Utah?

The 24-hour window described in Utah’s final paycheck law does not state that the employee must have their paycheck in hand within 24 hours of leaving the company. Although you can pay the employee in person within 24 hours, you also have the option of direct depositing their last paycheck or postmarking a mailed check to the employee within 24 hours. 

However, paying an employee outside of these boundaries does not comply with the law. If the final paycheck isn’t handed to the employee, postmarked, or direct deposited within 24 hours of the employee leaving the company, the employer must continue to pay the employee until they receive their final paycheck.

Say, for example, an employee clocks out on their final day on June 1st at 5 PM. Your company does not pay them their final paycheck until June 8th. The company would still be responsible for paying the employee their usual pay rate for those days they didn’t work but still had not received their final paycheck.

However, a payment delay with a final paycheck cannot exceed 60 days. After this time, the employee can seek payment for their final paycheck and any additional money the company owes by filing a civil lawsuit. You can read this rule in its entirety in chapter 28.5.1.c of Title 34.

What If There’s a Dispute on the Final Paycheck?

An employer and an employee may disagree with how the final paycheck should be handled. This typically happens when there is a discrepancy over how the employee left the company. If the employee believes they were terminated, the employer must pay within 24 hours. However, if the employer believes the employee quit, they may not pay the employee until the following payday.

When an employee does not believe they’ve received their final paycheck according to Utah law, they can send a notice to the company to request it after the 24-hour window. If the employee quits, they can send a written request after the next payroll cycle for which they should have been paid. 

Utah employees have 60 days to file a civil action to receive their final paycheck and any other money that may have been owed to them from the employer while waiting for their paycheck. If you’re in this situation, you might consider speaking with a local employment attorney. You can search for an employment lawyer in your state using the National Employment Lawyers Association database

Is It Legal to Withhold a Paycheck in Utah?

Employers may only withhold a portion of a Utah employee’s paycheck if they are required to by state or federal law. Applicable reasons are the same reasons that an employer may garnish any paycheck, including owing taxes or paying court-ordered child support.

Otherwise, an employer usually must follow the guidelines of the Utah final paycheck law when dealing with an employee’s final paycheck. An employer cannot, by law, withhold paychecks for any reason other than a state or federal garnishment order.

Additionally, Utah State Courts state that the maximum amount of garnishment for child support is 50%, while other creditors can take no more than 25% of an employee’s paycheck. Therefore, an employer would still be required to pay the employee the rest of their final paycheck according to the final paycheck law in Utah.

What Do I Do If the Employee Doesn’t Claim Their Last Paycheck?

Sometimes, companies make a good-faith effort to pay employees their last paycheck according to Utah state law. However, an employee might fail to pick up their check or the last known address of the employee is no longer accurate. 

When this happens, an employer can’t simply keep the unclaimed paycheck. Instead, the employer must follow Utah’s laws for reporting unclaimed money to the state. Employers can do this using the Utah Unclaimed Property portal. Employees can also use this portal to locate their unclaimed paycheck.

To avoid having to take these extra steps when an employee leaves a company, employers should keep up-to-date records of their employees to have their most current contact information. 

How Is PTO Handled in Utah for Terminated Employees?

Although an employee’s last paycheck doesn’t fall within paid time off (PTO) guidelines, employers might also be curious about how unused PTO is handled after an employee leaves the company. 

Utah does not require employers to pay employees for time off for any reason, including vacation, sick time, or family leave. However, Utah companies can choose to enact company-wide PTO despite not having guidance in the form of Utah PTO laws.

When a company does offer PTO, it must adhere to company policy. A PTO policy should outline the company’s responsibility and employee expectations regarding reimbursing an employee for their accrued PTO. This includes how much the company reimburses and how quickly after resignation or termination the company must pay the employee.

If an employer fails to follow its policy regarding unused PTO, an employee can file a claim with the Utah Labor Commission according to Rule R610-3.

To avoid potential legal action, employers should consider paying employees their unused PTO along with their final paycheck. At the very least, reimburse an employee any owed benefits before the maximum time allowed in your PTO policy.

Make Sure Your Company Follows Utah PTO Laws and Final Paycheck Laws

I’ve covered a lot here, but it’s all crucial information to know if you employ workers in a Utah business.

To sum up, Utah companies must pay final paychecks to workers within 24 hours of being terminated. For employees leaving the company due to an industrial dispute or resignation, the final paycheck must be received by the next payroll pay date. Final paychecks may be given in person, mailed by check, or direct deposited. 

As for PTO, employers should consider aligning their PTO policies with Utah’s final paycheck law. This will encourage employers to pay out unused PTO at the same time as the final paycheck, squaring up their reimbursement responsibilities. 
Investing in payroll software could help your company keep everything organized regarding payroll and benefits, which may make it easier to pay employees their final paychecks and benefits upon their separation from the company. Additionally, occasionally consulting with a Utah labor lawyer can give you some peace of mind about your company’s compliance.

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