What is the length of time can a company can withhold an employee's paycheck before being subject to penalties?
Question Details:
I am the bookkeeper of a small Iowa company. We have one part-time employee. This employee has not yet received his Nov 5, 2009 paycheck (all other employees have received their paychecks). The owner has not yet signed or given this employee his paycheck because he says we are short on funds. Payroll is done every other Thursday. Nov 19th is the next payday. What is the length of time a company can withhold an employee paycheck before being subject to penalties?
Employment and Labor Law Answers
There is no right to withhold employee paychecks at all. The employee could report you to the labor dept. for a possible wages and hours violation, and could also claim any additional expenses incurred because of you w/holding his paycheck (e.g. any bounced check or overdraft fees).
If there is a lack of funds, the owner should, if necessary borrow to pay any amounts owed the employee and then lay him off to not keep incurring the liability; or negotiate with the employee and get an agreement from him that you may w/hold or defer his payroll for a certain amount of time, or that the employee will work a certain number of days w/out pay, or otherwise come to an agreement with this employee that will work for both parties.
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