Withholding Pay after Termination of Employees

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Many dentists do more than practice dentistry: they own, run, and manage a business. Unfortunately, employee termination is often a necessary part of running a successful practice. Many dentists inquire as to whether it is permissible to withhold a former employee’s pay when a former employee has not completed patient notes or when a former employee remains in possession of practice property.

Federal Department of Labor mandates that wages are due on the next regular payday for the covered pay period. The law does not allow for any exceptions related to incomplete work or equipment that is not returned.

This means that the employee could potentially file a claim with the Federal Department of Labor or Federal Wage and Hour Division alleging a violation of federal law [the Fair Labor Standards Act], which offers federal protections against the unlawful withholding of an employee’s paycheck. If an investigation commences, the employer could be subject to fines up to $10,000.00, criminal sanctions or imprisonment.

To prevent subjecting yourself and your dental practice to a complaint or federal investigation, employers should not withhold an employee’s pay and should promptly release a final paycheck on the former employee’s next regular payday unless otherwise agreed to in writing.