Serving your notice period can be a bittersweet experience. You might be excited about your new role, but friction with your existing employer is always a possibility. Ideally, you can decide to leave a company at any time as long as you follow the terms of the contract, however, many employers often feel snubbed by an employee choosing to move on. One way to display this displeasure during resignation is when the salary is withheld after the resignation period is announced. As petty as it sounds, the choice impacts the resigning employee, often making other colleagues second-guess their decision to make a change. Let’s look at what you can do when your salary is withheld during your notice period.
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What Is a Notice Period?
The notice period refers to the minimum duration of advanced information that an employee needs to provide an employer before quitting the company. While there are no legally predetermined notice periods, many employers have a duration mentioned in the contract, usually ranging between 2 weeks to 1 month. A 3-month notice period is increasingly common today.
The person quitting remains an employee of the company until they serve out the notice period, and as such, their resignation salary cannot be withheld during or after the resignation period. Employers are required to continue paying their fair wages until the notice period ends. If the employer wants to cut the notice period short, they might be required to still for the notice period that would be served, in case the contract includes a “pay in lieu” condition that requires them to do so.
What Are Legal Protections When Salary Is Withheld after Resignation?
The U.S. does not have any specific federal requirements that require the employer to pay the last salary immediately. While some states have their own mandates on payment immediately after termination, the “last paycheck” rule can be a useful aid. Employers should provide an employee with their salary by the regular payday that was in use for the employee. This means if an employee was previously paid on the last day of the month, his last paycheck should arrive similarly. Employees who have served their notice period and find their salaries withheld past the regular payday can contact the Department of Labor’s Wage and Hour Division or the state labor department.
Fair Labor Standards Act (FLSA)
The FLSA has guidelines for employment terms and legally enforceable rules for all employees. There are no specific rules about the notice period or aids to directly combat resignation salary being withheld after resignation, however, it does require all employees to be paid their due whether for overtime work or otherwise. This law can be used in claims when salary is withheld.
State Labor Laws
Looking into state labor laws might provide more concrete tools that can be relied on if resignation salary is withheld after resignation. For example, Texas has a payday law that clearly states that if an employee quits, they must be paid in full at the next regular payday while terminated employees should receive and withheld wages within six days. Here, if an employee gives notice about quitting, the employer does not have to let them work till the notice date. The employer can accept the notice immediately and is not required to pay for the period.
In California, an employee who quits is owed his final paycheck within 72 hours of providing notice. If the notice given is earlier than 72 hours before the final shift, then they can receive their pay on their last day. California labor laws also mention “waiting time penalties”, where employers have to pay a full day of wages for each day that the salary is late, providing additional safeguards if the salary is withheld. Reviewing state labor laws can inform you of what laws can protect you.
Special Cases
There are special cases where employers might withhold salary in partial or full until the matter is resolved. If there is a breach of contract, legal debate, or internal disciplinary action against the employee, salary might be withheld until the course of action is discussed. Employers might also have some handover responsibilities that the employee is required to fulfill before he quits the company. Any delay from the employee during his notice period might cause the resignation salary to be withheld after the resignation.
Damage to company property might allow employers to deduct damages from the salary and withhold a part of it as payment for harm caused, however, if the salary falls below minimum wage, the company could get in trouble. While not overtly defined, notice period regulations and salary transfers, employers are not allowed to refuse pay or withhold it entirely for extended periods.
What to Do When Salary Is Withheld during the Notice Period?
It is always recommended to discuss with the employer first before taking legal action against an employer when salary is withheld after resignation or during the notice period. It might be a case of human error or there might be certain internal ongoing discussions regarding the decision. Ask and understand and if no solution can be arrived at, legal recourse might be necessary.
Make a Formal Resignation When You Choose to Leave
Start the interaction off with clarity. While resigning, be clear about your notice period and last date so there can be no ambiguity regarding salary at a later stage. Clear communication allows the company to plan its response as well and maintains a record of your conversation.
Maintain written documents
It is always ideal to have these sensitive discussions over email rather than to ensure there is written evidence of your inquiry before legal action. You can also request the company to give you a date for when you can expect your relieving letter and salary so you have a timeline in mind for yourself.
Educate Yourself Regarding State Laws
Be aware of what support your government can provide for you. Review state laws and gain clarity on their details before approaching an employer with your notice period. This will also help you better negotiate your terms.
Complete Your Contractual Obligations
Review your contract to see what the company guarantees and also what might be required from you. Fill in any necessary data sheets, transfer all sensitive documents, and discuss with your manager to resolve any other responsibilities during your notice period. If resignation salary is withheld after resignation, there will be clarity on your side of the contractual obligations.
Seek Legal Advice
Reach out to employment attorneys if your resignation salary is withheld for extended periods with no response from managers or those in charge. They will be better placed to guide you on your options and also provide you with the government safeguards that can support your case.
Whether on notice period or past the resignation date you provided the employer, all resignation salary owed to you for your work at a business needs to be fairly compensated. Seeking legal action can be a daunting task, so consider all your avenues and try to find an agreement with your employer. If there are no concrete solutions to receive the salary withheld, explore how your state can support you. Resignation salary should not be withheld after the resignation.