The greatest economic turmoil that swept through America in 2008 made survival tougher for many top-notch companies. A majority of company in America is still going through tough times and when there is cash crunch within any company, the company tries to cut costs by delaying payment to employees or not paying at all for months.

Unfortunately, most companies have no idea that paying employees in one of the top legal obligations.
The others being:

  • Providing workers with an itemised pay statement
  • Complying with national minimum wage law
  • Making statutory payments, eg maternity, ordinary paternity, additional paternity, adoption, sick and guarantee pay
  • Only making lawful deductions from wages

Laws Governing Wages - Federal and State

As per federal and state laws, an employer should pay the employees on regular basis and at regular intervals. That said, an employer cannot pay the employees monthly one month and weekly the next.

Some states also require employers to pay terminated employees within a certain amount of time. Check with your state's department of labor for regulations in your state.

Employee wage complaints

If an employee has unpaid wages, overtime wages, or vacation pay, he/she can contact the state employment agency and file a complaint. Once your complaint is accepted, the agency investigates the entire thing and if found guilty, the employer either faces a lawsuit or loses its license. Consequences include not only the payment of wages due, but also fines and penalties.

What employers should do about wage complaints

An employer can protect itself by maintaining a good time record, taking wage disputes seriously, and attempt to resolve any dispute at the slightest hint. If there is a dispute about an employer’s pay - whatever it might be - the employer should immediately pay the portion due.

Common risks associated with paying employees

A few things you might not know about paying employees:

  1. An employer cannot withhold a certain portion of an employee’s wages without his/her consent, except for withholdings required by law (FICA taxes, for example)
  2. An employer cannot withhold a certain portion of an employee’s wages as punishment. Even if an employee violates company policy and leaves on bad terms, they are still owed their full paycheck.
  3. An employee’s last paycheck is usually due on or before the next regular payday; even if overtime is unapproved; it still usually must be paid.

Deliberately cheating on an employee can cost heavily. So it’s advised to make the employee wages sheets clean as best as possible.

Do you know? Obama’s new overtime rules: Are you eligible?

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