Recent amendments to Arizona’s Wage Payment statute, A.R.S. 23-350, et seq., have extended the time frame in which employers must pay an employee upon separation of employment. Make special note of these timeframes: employees who are fired, discharged, terminated or permanently laid off are to be paid all wages within seven (7) business days of the discharge or by the next regular payday, whichever comes first. A.R.S. 23-353.
When an employee voluntarily leaves or quits, the employer must pay all wages due by the next regular payday. The employee can request the wages be paid by mail. Id.
An employer must pay an employee all undisputed wages due, but may withhold the disputed amount, including the amount of any counterclaim or claim of debt, reimbursement, recoupment or setoff, related to the workplace. These cases often result in claims and lawsuits. Therefore, it is imperative to understand what is a proper withholding and what is a properly disputed amount. An employer may not withhold or deduct any wages from an employee’s paycheck unless:
Required or empowered to do so by state or federal law;
The employee has consented in writing; or
There is a reasonable good faith dispute as to the amount of wages due, including the amount of any counterclaim or claim of debt, reimbursement, recoupment or setoff asserted by the employer against the employee.
A failure to pay undisputed wages within the above timeframes may subject the employer to trebling under A.R.S. 23-355. In addition, the court may award attorneys’ fees to the successful party in an action arising out of contract. A.R.S. 23-341.01. Even in the absence of a written employment contract, an implied employment agreement may be found. See Sanborn vs. Brooker & Wake Property Management, 178 Ariz. 425, 874 P.2d 982 (App. 1994). State and federal law must be followed, however, because an employer may not make deductions if it would cause an employee to earn less than federal minimum wage, including deductions for uniforms, tools or other items necessary for employment. Ensuring timely payment of all wages due upon cessation of employment, electronically or otherwise, under the new amendments, will go a long ways to preventing claims. As always, knowledge is power. Consult an experienced employment lawyer for any questions or concerns regarding payment of wages.