THE LAST PAYCHECK
By John Andrew, Labor Standards Bureau
A frequently asked question in the area of wage payment concerns when wages have to be paid to employees who quit or who are terminated from employment. Montana law provides that employees who quit must receive their final paycheck on the next regular payday for the pay period in which employees are separated or 15 days from the date of separation, whichever occurs first. The law further provides that if the employee is separated for cause or laid off by the employer, the employee must be paid immediately. Immediately is defined in administrative rule as within four hours or the end of the business day, whichever occurs first.
The immediate payment provision of the law does not apply to those employers who have a written personnel policy addressing employer-initiated separations. Employers who have a written policy in place may extend the time for final wage payment to a period that conforms to that applied to employee-initiated separations---the next regular pay day for the terminal pay period, or 15 days, whichever occurs first. If you are in the unfortunate situation of letting someone go you may well find that immediate payment is your best course of action. If this is not practical or poses problems, a written policy will provide flexibility you may need.