Employers must pay wages in cash or its equivalent, and direct deposit is continually gaining popularity as a convenient method for paying wages. The payment of wages is regulated by federal and state law. There is no federal law that sets out how often or in what form employers must pay wages to employees. State laws regulate how frequently employees must be paid. Many states have laws regarding the payment of wages upon the termination of employment, including accrued vacation, and these rules often differ depending on whether the termination is voluntary or involuntary. If there is a dispute about wages, the employer must pay the employee what it concedes is due. The employee may file a wage claim with the commissioner of Labor to collect any remaining wages he or she believes are owed.
According to federal Fair Labor Standards Act (FLSA), a workweek is a period of 168 hours during 7 consecutive 24-hour periods. A workweek may begin on any day of the week and at any hour of the day established by the employer. Generally, for purposes of computing minimum wage and overtime, each workweek stands alone, regardless of whether employees are paid on a weekly, biweekly, monthly, or semimonthly basis. Two or more workweeks cannot be averaged.
Virtually all states regulate how frequently employers must pay employees their wages. State laws also specify the length of time that may elapse between the end of the pay period and payday. Employers in some states are required to notify their employees in advance of regularly scheduled paydays. In addition, some state laws specify when to pay employees who are absent on payday and when the regular payday falls on a holiday.