withholding pay

[stressd]

Alabama:
Without getting in to too many specifics, and (obviously) stipulating one might require more* to answer this effectively:

Under what conditions, if any exist, is an employer able to hold an employee's last paycheck?

*Will supply info.

[Pattymd]

Generally speaking, none. However, there might be an issue of semantics here, so can you give us some details? Don't mention the name of the company, please.

[stressd]

There is a semantics issue, so, yes:

Several weeks prior to leaving, the employee was given funds from the store for a paycheck they did not receive. It is a salaried employee and due to a mixup of some nature in HR on a corporate level, their check was not deposited into their account. I want to restate that this was not an advance, it was compensation for the previous week which was handled at store level and not corporate.

Now the employee is no longer with the company and a check is at the store for their last week worked. Can the employer hold this check since corporate has not handled the repay to the store on the earlier?

I'm guessing not a chance.

[Pattymd]

No, see, not necessarily. If the amount given in cash was the exact amount of the net pay due, then you can just have payroll redeposit or void the NET check and record that the employee was paid in cash instead. The exact method would depend on the payroll system you use and your accounting procedures.

[stressd]

Well, the first case scenario wasn't a net-pay amount, but either way, the semantic argument is there was a cash payout on a check that essentially was never covered by corporate.

Thus, the store is owed this amount to cover it's payout, yet the employee was essentially compensated for the week worked.
(ie: employee paid by store = payroll owes store reimbursement)

The amount in question, however, isn't directly related to the final work week for which the check sitting in the office applies.

So, can a company withhold paying the final check to the employee for the hours worked in their last week with said company until a settlement is made on the other amount?

[Pattymd]

No, that's not what I said.

It appears the store advanced in cash a portion of the net pay that was not timely received by the employee. Now there is a check payable to that employee for that pay period. Here's what I would do if this were my payroll dept.

1. Return the check to payroll, asking that it be recut with the salary advance deducted (provide whatever documentation they need; hopefully, it's the cash received slip from the register, acknowledged by the employee). If that results in a zero net check, so be it.

2. Have payroll cut the check for any other earnings due since that time.

3. Send the checks via certified mail, return receipt requested, to the employee's last known address with a letter explaining what is included in each check.

Does this help at all?

[stressd]

Well, the check that is presently in the office is *not* for the pay period mentioned in the advance/payout.

The check in the office is for the last week the employee worked prior to leaving the company.

The cash amount mentioned in the other scenario is for a completely other pay week over two months ago. The corporate payroll department, for whatever reason, has still never reissued that check nor covered the amount at store level.

The dilemma is that the store is out moneys that it cannot get from the employee because he isn't with the company any longer; nor, technically, is the employee responsible for reimbursment of the funds because it was payroll.

Essentially, the check being *held* isn't really related to the other event, it's simply being used as a means to an end. The store is looking to get it's payout on the other check recouped.

I re-read once more and I get your idea, but it is my opinion payroll can handle the other check seperately from what we are holding. This employee wants their last check and I am having a tough time justifying not turning it over to them, regardless of the other situation.

Thank you for your patience and time, by the way!

[cbg]

With the sole exception of an employee in South Dakota who has not returned all company equipment, I am not aware of any circumstances in which out and out withholding a paycheck is legal.

[Pattymd]

Then obviously I didn't understand what you said.