What's termination pay?

If employment is terminated for any reason, the employee must be paid for all compensatory time owed at the rate of pay in effect for the employee or the average rate over the employee's last 3 years of employment, whichever is higher. If the employer pays cash for accrued compensatory overtime at any other time, the overtime pay must be based on the employee s regular rate when the payment is made.

Termination checks are governed by a separate set of state rules for when employees must be paid when they separate from employment because of discharge, layoff, or resignation.

The chart below summarizes requirements that guarantee employees will receive all wages they have earned on or soon after their last day of employment.

See also