Final Paychecks for Terminated Employees: Know Your Rights
Massachusetts Final Pay LawsWhen your employment ends, whether by termination or resignation, there are strict rules about what you must be paid and when that payment must be made. The amounts you must be paid are the same whether you are terminated or you quit- the main difference between the two scenarios is how quickly you must receive the final paycheck.
Final Pay Laws in Massachusetts: What Amounts Must Be PaidYour final paycheck must include:
Final Paycheck for a Terminated EmployeeIf you are terminated, laid off or fired in Massachusetts, you are entitled to receive your final paycheck on the same day as the termination. If you are paid even one day late, you may be able to claim a violation under the Massachusetts Wage Act, and recover double the amount of the total final paycheck.
The reason for this is that the law recognizes the very real hardship to terminated employees of being forced to wait for needed cash after losing a job. If some of the required amounts are missing from the check you receive, or if you do not receive it on the day of termination, you have the right to pursue remedies under the Wage Act to hold the employer accountable for their actions. Final Paycheck After Quitting or ResigningWhen an employee quits, the final paycheck is due in the next regularly scheduled payroll after the day of termination. For example, if you are usually paid weekly on Fridays and are terminated on Monday, your final paycheck would be due on the upcoming Friday.
The amounts you are owed do not change depending on whether you resign or are terminated, but the employer is entitled to wait until they next run payroll to issue the final check. |
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Vacation Pay on Termination or Resignation
Vacation pay is owed at termination, unused sick time is not. If your employer has a combined paid time off (PTO) bank that does not make the distinction between sick time, vacation time, and personal time, this can be a little difficult to sort out as you are reviewing your final paycheck.
It is also important to understand how vacation time is accrued under your employer's policies. Many employers have policies that state the vacation is accrued in 1/12 increments throughout the year. For example, 10 days of vacation might accrue at .83 days each month. Policies also differ with respect to whether vacation rolls over from year to year. The Massachusetts Attorney General has issued guidance that if there is no policy about vacation accrual, it is assumed that the time accrues evenly from month to month, as in the example above.
Finally, there is the special case of unlimited vacation policies. On its face, there is no accrued unused vacation because you are free to take or not take any amount of vacation throughout the year. This remains a gray area under the law, however, as some courts have decided there should be a reasonable amount of vacation time implied, and that terminated employees who took little or no vacation should still be entitled to some payment. If you leave a job that has an unlimited vacation policy and were not paid any accrued vacation on termination, it is a good idea to consult with an employment lawyer to determine whether there are any additional amounts you were owed.
If you receive your final check on time but are paid less than what you should have been paid for vacation time, you can still bring a claim under the Massachusetts Wage Act, and seek payment for three times the missing amount as well as their attorneys' fees and costs.
It is also important to understand how vacation time is accrued under your employer's policies. Many employers have policies that state the vacation is accrued in 1/12 increments throughout the year. For example, 10 days of vacation might accrue at .83 days each month. Policies also differ with respect to whether vacation rolls over from year to year. The Massachusetts Attorney General has issued guidance that if there is no policy about vacation accrual, it is assumed that the time accrues evenly from month to month, as in the example above.
Finally, there is the special case of unlimited vacation policies. On its face, there is no accrued unused vacation because you are free to take or not take any amount of vacation throughout the year. This remains a gray area under the law, however, as some courts have decided there should be a reasonable amount of vacation time implied, and that terminated employees who took little or no vacation should still be entitled to some payment. If you leave a job that has an unlimited vacation policy and were not paid any accrued vacation on termination, it is a good idea to consult with an employment lawyer to determine whether there are any additional amounts you were owed.
If you receive your final check on time but are paid less than what you should have been paid for vacation time, you can still bring a claim under the Massachusetts Wage Act, and seek payment for three times the missing amount as well as their attorneys' fees and costs.
Payment of Commissions at Termination
If you are paid in whole or in part on a commission basis, it is important to carefully review whatever final paycheck to receive to be sure you were paid everything you are entitled to under the law.
A commission is an incentive payment based on an employee's individual contribution. For example, many sales employees receive payment based on sales made, and some service provider employees may receive payments based on the number of completed services or sessions. These kinds of payments are considered wages under the Wage Act and must be paid when your employment ends.
The question many employees have is what commissions were earned before termination, and therefore owed in the final pay calculation. The standard scenario is a sales person who earns a commission when a sale is closed, but there are other variations, including policies that state that commission is not earned until product is shipped or payment made or some other contingency. Whether or not the commission plan says you must still be employed to receive payment, commissions that are considered "earned" under the law should be included in your final check.
A commission is an incentive payment based on an employee's individual contribution. For example, many sales employees receive payment based on sales made, and some service provider employees may receive payments based on the number of completed services or sessions. These kinds of payments are considered wages under the Wage Act and must be paid when your employment ends.
The question many employees have is what commissions were earned before termination, and therefore owed in the final pay calculation. The standard scenario is a sales person who earns a commission when a sale is closed, but there are other variations, including policies that state that commission is not earned until product is shipped or payment made or some other contingency. Whether or not the commission plan says you must still be employed to receive payment, commissions that are considered "earned" under the law should be included in your final check.
Protecting Your Legal Rights
Your right to be paid timely and accurately at the end of employment does not depend on how the employment ended or whether your employer thinks you were a good or bad employee. The law protects these payments because they were earned during your employment, and your right to receive them is virtually absolute. The Wage Act provides not only for triple damages if you can prove there were earned and unpaid amounts, but requires the employer to reimburse you for your costs and legal fees if you are successful. If you have any doubt about whether your final paycheck was paid timely or complete, you should consult an employment attorney to review the situation and help you assess whether you have legal claims you want to pursue.
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Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year. She has written a book on employment law: Rules of the Road, What You Need to Know About Employment Laws in Massachusetts, and helped thousands of clients on both the employee and employer side with severance and non compete review and negotiation, wage and hour, discrimination and retaliation disputes, and advice about employment law generally.
Rebecca Rogers: Rebecca is a 2006 graduate of Boston College Law School, and has worked with slnlaw since 2013. She previously worked as an intellectual property litigation attorney for Fish & Richardson in Boston, Massachusetts, and clerked for the Massachusetts Supreme Judicial Court. Rebecca has helped clients with wage and hour disputes, employment discrimination and retaliation claims, review and negotiation of severance and non compete agreements, and advice to both employees and employers about navigating complex employment situations.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna has helped clients with review and negotiation of severance and non compete agreements, wage and hour disputes, employment and discrimination claims, and advice to small business owners about employment law and other business matters.
Elijah Bresley: Eli is a 2014 graduate of Seton Hall Law school, and has worked with slnlaw since 2020. He previously worked for a boutique employment law firm outside of Boston, and then for the Labor and Employment department of a large Boston firm. He also spent a year clerking for the judges of the Superior Court in Hartford, Connecticut. Eli has helped clients on the employee and employer side with all varieties of employment law issues, including employment discrimination, retaliation, and wage and hour issues, litigation in MCAD and state and federal courts, and advising employers about employment policies and practices.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped clients with wage and hour, discrimination and retaliation disputes, review and negotiation of severance agreements, and litigation in MCAD and state and federal courts on employment related issues.
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