When an employee leaves

Updated 28 August 2026·19-item checklist

The states that catch people out

California, Massachusetts, Colorado, Montana, Nevada, Minnesota, Utah all expect the final paycheck immediately or within a day when you end someone's employment. If you are in one of those and you are planning to pay them on Friday like everyone else, you are already late.

Final pay deadlines

Pick your state. If it is not listed, that is deliberate, and there is a note underneath explaining why.

Your state

State	If you let them go	If they quit	Unused vacation
California	Immediately, on the day	72 hours, or immediately if they gave 72 hours notice	Must be paid out Waiting-time penalty of a full day of wages for every day the check is late, up to 30 days. Firing for cause does not remove the vacation payout.
Massachusetts	Same day	Next regular payday	Must be paid out
Colorado	Immediately	Next regular payday	Must be paid out Use-it-or-lose-it vacation policies are prohibited, and firing for cause does not remove the payout.
Montana	Immediately or near immediately	Next regular payday	Must be paid out Use-it-or-lose-it is prohibited.
Nevada	Immediately or near immediately	Next regular payday	Follows your written policy
Minnesota	Immediately or near immediately	Next regular payday	Follows your written policy Often expressed as due within a set time of a written demand rather than a flat deadline. Check the current wording.
Utah	Within 24 hours	Next regular payday	Follows your written policy
New Hampshire	Within 72 hours	Next regular payday	Follows your written policy
Vermont	Within 72 hours	Next regular payday	Follows your written policy
Illinois	Next regular payday	Next regular payday	Must be paid out Use-it-or-lose-it is prohibited.
Nebraska	Next regular payday	Next regular payday	Must be paid out Use-it-or-lose-it is prohibited, and firing for cause does not remove the payout.
Alabama	Next regular payday	Next regular payday	Follows your written policy No state final pay statute, so the federal floor applies.
Florida	Next regular payday	Next regular payday	Follows your written policy No state final pay statute, so the federal floor applies.
Georgia	Next regular payday	Next regular payday	Follows your written policy No state final pay statute, so the federal floor applies.
Mississippi	Next regular payday	Next regular payday	Follows your written policy No state final pay statute, so the federal floor applies.

Why this is not a fifty-state table

Published lists disagree with each other, and several states express the rule as a number of days after a written demand rather than a flat deadline. Rather than fill the gaps with something that looks authoritative and is not, we list the states where the rule is well documented. If yours is missing, your state labor department is the answer, and the federal floor of the next regular payday is the most you can assume.

Unused vacation is often wages

This is the part owners get wrong most, because it feels like a benefit you are choosing to give. In roughly nineteen states accrued vacation is treated as wages already earned, which means it cannot be forfeited and has to be paid when someone leaves.

These states prohibit use-it-or-lose-it policies outright, so time someone accrued does not disappear at year end.

California, Colorado, Illinois, Louisiana, Massachusetts, Montana, Nebraska, North Dakota, Rhode Island, Wyoming.

Two things follow. Whether you owe it is decided by the state your employee works in, not where your business is registered. And in several of those states, firing someone for cause does not remove the obligation, however unfair that feels at the time.

The checklist

19 items. Ticks save in this browser only, and there is no signup.

Before their last day

Most of this gets harder the moment they walk out.

Work out the final pay deadline for your state In several states it is the same day you let someone go, and missing it carries a penalty far bigger than the wages.
Calculate accrued vacation owed In many states earned vacation is wages, and firing for cause does not remove the obligation.
Check for any advance, loan or equipment deduction you planned Most states restrict deducting from a final check, even with a signed agreement. Ask before you do it.
Collect equipment against the issued list This is what the equipment checklist was for. Do it before the last day, not after.
Get keys, fobs and access cards back
Change gate, alarm and lockbox codes they knew Every customer code they were given. This is the one people skip and regret.
Remove them from the schedule and any group chat
Revoke app logins and shared accounts Scheduling app, time clock, fuel card, anything with your money behind it.
Remove them from the commercial auto policy You are paying for a driver who has left.

Paying them correctly

The part that turns a quiet departure into a claim.

Pay all hours worked, including any overtime in the final week
Pay accrued vacation if your state or your policy requires it
Deliver the check by your state deadline, not your normal payday These are different in a lot of states, and the deadline wins.
Give a final pay stub showing the breakdown
Do not withhold pay over unreturned equipment Tempting and frequently illegal. Recover the item separately, and take advice first.

Afterwards

Things that arrive weeks later and catch people out.

Expect a state unemployment claim, and respond by the deadline Not responding can cost you the case and raise your SUTA rate for years.
Keep payroll records for the required retention period Federal rules require several years, and states often require longer.
Issue their W-2 in January like any other employee Leaving mid-year changes nothing about this.
Update your headcount before your next payroll run
Write down why they left, for yourself Three departures for the same reason is a pattern worth seeing.

The three that cost real money

Paying on your normal payday in a same-day state. The penalty is calculated on their daily wage, so it grows whether or not the amount you owe was small.
Deducting equipment from the final check. Feels fair, is frequently illegal, and converts a $300 ladder into a wage claim.
Ignoring the unemployment claim. Not responding usually loses it by default, and your SUTA rate is experience rated, so it raises your cost for years afterward. Our SUTA table shows what that rate is worth.

Not legal advice

State employment law changes and the details matter more here than almost anywhere else on this site. Use this to know which questions to ask, then confirm with your state labor department or an employment attorney before you act.

Common questions

When do I have to pay a final paycheck?

It depends on your state and on whether they quit or you let them go, and those are usually different deadlines. Several states require payment the same day you terminate someone. The federal floor, where a state has no rule of its own, is the next regular payday.

Do I have to pay out unused vacation?

In roughly nineteen states accrued vacation counts as earned wages and has to be paid. In several of those, firing someone for cause does not remove the obligation. Elsewhere it usually follows whatever your written policy says, which is a good reason to have one.

Can I hold their last check until they return the tools?

Almost never, and this is the most common way a routine departure turns into a wage claim. Most states restrict deductions from a final paycheck even where the employee signed something agreeing to it. Recover the equipment as a separate matter and take advice before deducting anything.

What is a waiting time penalty?

A penalty for paying late that is calculated on the employee’s daily wage rather than on the amount you owe. In California it runs one full day of pay for every day the final check is late, up to thirty days. Someone on $200 a day who is paid three weeks late is owed several thousand dollars in penalties on top of their wages.

The equipment list you issued Onboarding the next one