If you have a business in Alaska, you’ll learn the simple rules about giving an employee their final paycheck.
Getting good help can be hard if you don’t know where to source good workers. It can also be challenging due to a difficult and lengthy onboarding time. When you’re just getting to where you can hire some help, there may be a lot of false starts. So, you’ll need to know what to do when giving your employee his or her final paycheck.
According to federal law: Under federal law, employers cannot withhold an employee’s pay for any reason. The employee must be paid for hours worked.
Most laws regulating final paycheck rules are determined at the state level. Here is Alaska’s final paycheck rules:
Alaska’s Final Paycheck Rules
Alaska Statues Title 23. Chapter 5 Section 140
(b) If the employment is terminated, all wages, salaries, or other compensation for labor or services become due immediately and shall be paid within the time required by this subsection at the place where the employee is usually paid or at a location agreed upon by the employer and employee. If the employment is terminated by the employer, regardless of the cause for the termination, payment is due within three working days after the termination. If the employment is terminated by the employee, payment is due at the next regular pay day that is at least three days after the employer received notice of the employee’s termination of services.
(c) [Repealed, § 2 ch 19 SLA 1971].
(d) If an employer violates (b) of this section by failing to pay within the time required by that subsection, the employer may be required to pay the employee a penalty in the amount of the employee’s regular wage, salary, or other compensation from the time of demand to the time of payment, or for 90 working days, whichever is the lesser amount.
The Consequences of Being a Terrible Boss
Since your first worker might have an irregular or part-time schedule, you might think this isn’t a big deal. But how you treat your people is a big deal. If you treat your people badly, it will continue to be difficult to find good workers down the road. It will strain those who end up being good for you, because they will have to cover shifts for unreliable people. Reputation is king.
If you don’t pay a terminated employee within 3 days of termination, here’s what happens. You may end up needing to pay them the regular rate they would have earned up to 90 days after that time period. Save that money for people who are actually going to help you and follow the rules.
This website has an excellent link to all the labor laws by state.
I can help you avoid a lot of unnecessary expenses as your bookkeeper. To save the 80+ hours per year you would have spent doing it yourself, schedule a free bookkeeping consulting call.