Can my employer withhold my final paycheck?

I was hired 18 months ago and offered a $2000 sign-on bonus after 90 days of work. My employer didn’t pay the bonus for 12 months and he lost the contract I was employed on last month. As of that time, I had 45 hours of PTO accrued. Now my former employer is threatening to withhold my final paycheck, including 1 day of work and my 45 hours of PTO because he claims he paid out my bonus and because I used educational benefits within the last 6 months. My termination was involuntary and is categorized as a layoff. Is it legal for him to withhold my final day of work and my accrued PTO? His handbook states as long as you are not terminated due to misconduct, he will pay out the PTO; it makes no mention to bonuses or education benefits.

Asked on June 12, 2012 under Employment Labor Law, Virginia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

1) There are no grounds for withholding any of your pay because the employer chose to give you a bonus or educational benefits. Employees must be paid for all work done, even if the employee otherwise should owe the employer money.

2) Normally, a company would not have to pay PTO on termation--unless there was a contract or policy in place that it. From what you write, there was such  a policy and arguably, an implied contract (through the handbook) as well. In that case, unless the terms of that policy or contract specifically were that the employer could offset PTO owed by amounts paid for bonuses or educational benefits, the employer would have to follow its policy/agreement and pay you the PTO.

3) You would not have to repay the bonus and/or educational benefits unless prior to you getthing them, there was an agreement in place that on termination or under certain circumstances you would repay, and those circumstances occured.

From what you write, you may therefore have a claim for pay for that 1 day of work and possibly 45 hours of PTO, too. You may wish to bring a legal action, possibly in small claims court, where you could act as your own attorney.

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Under the laws of all states in this country, one's former employer cannot legally withhold any portion of a former employee's pay check over a dispute as to what monies are actually owed. When an employee is terminated, payment of all money owed is due immediately.

In your situation, you are to be paid what is in dispute immediately and the employer's recourse is to sue you for what he or she feels is being overpaid. If you do not get what you deem is owed, you should consult with an attorney that practices employment law and/or make a complaint with your local labor department over what is transpiring.

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