Whether you’re an employer or an employee, you’ll want to be aware of your state’s laws about when paychecks must be delivered and how payment can be legally made. It is especially important that you know the rules for final paychecks, because failure to comply with applicable laws may result in an employer being ordered to pay the former employee not only all wages owed, but penalties and reimbursement of his or her attorney fees.
This alert discusses the general paycheck rules for the states of Oregon and Washington, but both states have varying rules for certain types of industries, and in some cases, federal law applies, so it’s important to confirm which rules are applicable to your particular industry.
Regular Paydays
In Oregon, employers are required to establish and maintain regular paydays. Paydays may not be more than 35 days apart. Employers are free to pay their employees more often than this, but not less frequently. On payday, an employer must pay all “wages due and owing” its employees.
Washington state law requires employers to pay workers on regular established paydays at least once a month. If an employer pays wages on a monthly basis, the employer may establish a system under which wages for work performed during the last seven days of the monthly pay period are withheld and included with the wages paid on the next payday. If the pay period is less than a month, payday must generally be no later than ten calendar days after the end of the pay period.
Payment Methods
Oregon law requires an employer to pay its employees in cash or by a negotiable instrument (e.g., a check or money order) that can be cashed at a local bank or other local business without payment of a fee.
Alternatively, payment can be through direct deposit, ATM card, payroll card, or other means of electronic transfer long as the employee voluntarily agrees and so long as the employee can withdraw the entire amount without cost or has the option of choosing another means of receiving wages which does not involve any cost to the employee.
Similarly, in Washington, an employer can pay its employees using direct deposit, debit card or prepaid payroll card, as long as there is no cost to the workers. If there are associated fees, the employer must provide an alternative that allows employees to access their wages without any fees.
Final Paychecks
In Oregon, if an employee quits with less than 48 hours’ notice (not counting weekends and holidays), the paycheck is due within five business days (excluding weekends and holidays), or on the next regular payday, whichever comes first.
If an employee quits with notice of at least 48 hours, the final check is due on the final day worked, unless the last day falls on a weekend or holiday. In that case, the check is due on the next business day.
If the employer is the party terminating the relationship, or if the employer and employee mutually agree to terminate the relationship, the final paycheck is due no later than the end of the next business day.
Washington’s law is much simpler: no matter why the employee is no longer working for the employer, wages are due at the end of the established pay period.
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Please feel free to contact us if you have any questions about paychecks or other employment-law issues.
