What To Do When Your Paycheck Is Late

Employers are legally required to pay employees promptly. And while paycheck delays could stem from honest mistakes, that doesn’t give companies a legal pass. This article covers the basics of how to handle a delayed paycheck with professionalism and confidence. For legal help, reach out to a wage and hour lawyer.

Reasons for Paycheck Delays

There could be many reasons for paycheck delays, and not all of them are nefarious. However, employers are legally responsible for paying employees for work performed promptly. Honest mistakes and uncontrollable errors are not an excuse for an employer to delay payment.

Here are some common reasons for paycheck delays:

Software Glitch

A glitch or failure in the payroll system software could cause processing delays. It could be as simple as a software update failing to initiate.

Miscommunication between HR, payroll departments, or supervisors can also result in inaccurate timekeeping or missed pay periods. New hires or changes in direct deposit information may not be updated correctly, delaying payment. These are all honest mistakes or oversights that can be readily corrected.

Banking Error

Banking or processing errors could involve updated routing numbers or closed accounts. Payments processed before holidays or weekends may face additional delays due to banking schedules.

Third-party payroll processors may encounter technical problems or cutoffs, especially during high-volume periods like quarter-end.

Change in Employment Status

Sometimes, paycheck payment delays can result from a change in employment status. Employees who have recently resigned, been terminated, or are on leave may experience a delay in final payment if HR or payroll has not been promptly updated.

However, in many states, the law requires final paychecks to be issued on the last day of work or shortly after, depending on the circumstances. Employers sometimes incorrectly assume they have more time to issue final wages than the law allows.

Struggling Business

There are also situations where a delayed paycheck can be a signal of larger problems. Some employers delay payroll due to financial difficulties, budget shortfalls, or delayed funding, particularly in small or struggling businesses.

While the company’s financial health may affect operations, it is never a valid legal excuse for withholding wages already earned.

Incorrect Employment Status

There are employers who attempt to misclassify employees in order to save money. Workers who are improperly classified as independent contractors may not receive regular paychecks or legal pay protections such as minimum wage or timely payment.

Misclassified workers may also lack access to formal payroll systems, leading to inconsistent or delayed payments.

Immediate Steps to Take

If you do not receive your paycheck on the scheduled payday, it’s crucial to take action immediately. Taking the correct initial steps helps you resolve the issue quicker. It also creates a clear and documented record of your attempts to recover unpaid wages. If the issues result in legal action, this documentation will become supporting evidence.

• Review. Review your offer letter, employment contract, employee handbook, or collective bargaining agreement. These documents should cover pay schedules, dates, and methods.
• Communicate. Start by communicating with your supervisor, payroll department, or human resources as soon as the delay is noticed. Use professional, non-confrontational language and express concern about the issue. Communicate in writing (email preferred) to maintain a paper trail. Be clear, factual, and direct in your request.
• Document. Record all of the details about the missed paychecks, including any payments made toward the amount owed. Include the hours, bonuses, commissions, and reimbursements included in the missed paycheck.
• Follow Up. If no resolution is offered within a reasonable time, send a follow-up message referencing your previous inquiry. Don’t be afraid to escalate the issue. Remind the company (if needed) that employers are legally required to pay wages on time under both state and federal law.

Legal Rights Regarding Late Paychecks

The Fair Labor Standards Act (FLSA) is the primary federal law governing wage and hour protections in the United States. The U.S. Department of Labor (DOL) enforces the FLSA.

While the FLSA does not mandate a specific payroll schedule, it requires that employees be paid promptly and regularly for all hours worked. Employers must pay minimum wage and any applicable overtime pay on the regular payday for the pay period in which the wages were earned.

Employers cannot delay payment indefinitely, even for reasons such as administrative errors or financial hardship. Delays can be interpreted as wage theft, and affected employees may be eligible to recover liquidated damages, which equal the amount of unpaid wages.

If an employer is found in violation of the FLSA, it could face several penalties. It would need to make full payment of wages for all owed pay to all employees. This could also include liquidated damages. In some cases, it could also be required to pay civil penalties or submit to a federal investigation or audit.

State Laws

State wage laws often provide greater protections than federal law, with more specific requirements and stricter penalties. Many states require employers to issue final paychecks immediately or within a fixed period (such as 72 hours or by the next payday).

Failure to issue a final paycheck within the statutory timeframe may trigger penalties, regardless of the reason for the delay. Other common state labor laws include rules for pay stub format and content. There may also be additional penalties for intentional or repeated violations.

Employers may also face additional penalties for violating state laws. Depending on the jurisdiction, an employer could face:

• Interest on unpaid wages
• Waiting time penalties
• Liquidated damages
• Statutory penalties
• Civil or criminal liability
• Attorney’s fees and court costs

Remedies for Recovering Unpaid Wages

Employees have several avenues for recovering their unpaid wages:

• Internal remedies. This typically requires escalating the issue to a supervisor, HR, or payroll administrator. This step shows you made a good faith effort to resolve the issue, which is often beneficial if legal action becomes necessary.
• Filing a complaint. You can file a complaint with your state labor department or the DOL Wage and Hour Division (WHD). You may be able to file a formal complaint online or by mail, often without needing an employment attorney. Once a complaint is submitted, the agency will investigate the employer and compel the employer to pay the employee’s wages if appropriate.
• File a private lawsuit. You can sue for unpaid wages, penalties, and legal fees. If administrative remedies fail or if the amount owed is substantial, it may be appropriate to file a civil lawsuit. A lawsuit may be filed in state or federal court, depending on the law violated. There is also the option of filing in small claims court.
• Class action lawsuit. When wage violations affect multiple employees in the same company, a class action may be appropriate. The benefit of a class action lawsuit is the strength that comes with a large group of individuals, shared legal resources, and increased pressure on the employer to settle or reform their practices. If successful, class members may receive compensation for back pay, penalties, and legal fees.

Seeking Legal Assistance

You rely on your paycheck showing up on time. Addressing a missed payday starts with clear communication and thorough documentation. If that doesn’t lead to a timely resolution, escalating the issue through a formal complaint or legal claim may be necessary. A qualified employment attorney can offer legal advice tailored to your situation and help you navigate the process with confidence.

Use the Super Lawyers directory to find an experienced wage and hour lawyer.