In Florida, a terminating employee must be paid their final paycheck no later than the next regularly scheduled pay date. So, if your company pays bi-weekly, an employee leaving employment (either through termination or voluntary quit) must be paid on the next pay date. So, holding a paycheck is not permissible. If you are terminating employees in another state, be sure to check the state law because some states require fired employees to get paid on the day of termination.
But, what if the employee has company property that was not returned prior to or at the time of termination? The last paycheck delivery obligation does not change if the employee has company property. An employer may cancel direct deposit and ask the employee to come into the office to get their check (which allows for a reminder and creates an ideal opportunity to bring back company property). However, if the employee does not show up by the date for payment, the employer is obligated to mail out the employee’s check. To encourage the employee to return company property, I would recommend that you offer them something in return. Perhaps offer to issue their last paycheck, or their last reimbursement check early? Come up with your own idea and be creative.
What about recovering the cost of unreturned equipment? Can you make deductions from their final paycheck? No simple answer there. Of course, your company should get all employee to acknowledge receipt of the equipment and agree to return it when asked. Identify the equipment by serial number and take a picture. Your equipment issuance form can also have language that the employee is financially responsible for returning it in good condition. However, it is not a legitimate policy to withhold any paycheck in exchange for unreturned equipment.
We recommend that companies take the following steps:
- Use property issuance agreements with employees – make clear they must return all items.
- Assign a specific value to the company property.
- State that if company property is not returned on time, your company can hold the employee financially responsible for the value of the equipment. However, before making any deductions from the last paycheck, make sure you review the different rules related to hourly and salaried employees.
- Prepare a written demand for the property (sending certified mail) to ensure that small claims court is an option.
- Filing a police report for property theft is another option.
If you are giving employees expensive company property to use, and not using a Property Issuance Agreement, contact us today at Consultstu. We can make sure you are in the strongest possible position to hold employee accountable for your property!