Pay former workers promptly; don’t wait for them to ask

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in Human Resources

Audra Wales called in sick to the Wendy's restaurant where she worked on Jan. 11 and then showed up later that day to pick up her regular paycheck. During a dispute with the manager, she said, "This will be my last week." She intended to work during that week, but the manager took her off the schedule immediately.

When Wales stopped in Jan. 14 to ask for her final paycheck, the assistant manager said it wasn't ready. She asked him to call her when the check came in. The check arrived at the restaurant Jan. 24, but Wales didn't get it until Feb. 8 when she went to pick up her W-2 form.

Wales successfully sued the company, citing an Oregon law that says that when an employee voluntarily quits without 48 hours' notice, unpaid wages are due within five business days or the next regular payday, whichever comes first. The court said the burden is on the employer to pay within the time limit, not on the employee to ask.

It got worse for Wendy's. Because the court said the company's failure to pay was willful, it had to pay a big penalty plus attorney fees. Penalty wages in Oregon are calculated at the worker's hourly rate for eight hours a day until she is paid or until she sues, up to a maximum of 30 days. (Wales v. Walt Stallcup Enterprises, No. 97-01829CV CA; A102680, Ore. Ct. of App., 2000)

Advice: Get acquainted with your state's law regarding how quickly wages must be paid to departing employees. Many states have different laws for voluntary resignation and involuntary termination. Because many states impose administrative penalties or attorney fee awards, a small amount of money can become a big headache.

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