Why is My Final Paycheck Delayed After Resignation?
When an employee resigns, they often expect their final paycheck to be processed promptly. However, when a company cites the employment contract, stating that the payment will be made at the end of the following month, it raises questions about the legality of this practice. Is this a legitimate action, or does it fall under wage theft? In this article, we will explore the legal framework regarding the settlement of wages after resignation and analyze the validity of contract clauses proposed by companies.
Legal Framework: Payment Within 14 Days
According to labor law, companies are obligated to pay wages, severance, and any additional compensation within 14 days of an employee’s resignation. This is a mandatory regulation under Article 36 of the Labor Standards Act. Even if there is mutual agreement between the employer and employee, the statutory deadline cannot be extended.
The Ineffectiveness of Contractual Clauses
Despite any clauses in employment contracts or resignation letters that stipulate “payment on the 25th of the following month,” such agreements hold little weight after resignation. While these terms might apply during ongoing employment, the statutory period of 14 days takes precedence once an employee has left the company.
What Constitutes a Valid Exception?
Some companies argue delays due to “settlement processes” or “accounting schedules.” However, valid exceptions must meet strict criteria, such as natural disasters, IT system failures, or medical leave of critical personnel. General administrative reasons do not qualify as valid exceptions under the law.
Employment Contract Clauses: Valid or Not?
Many companies include clauses in contracts specifying the payment schedule, including post-resignation payments. However, these clauses are generally considered invalid when it comes to settlements after resignation.
Ongoing Employment vs. Post-Resignation
During active employment, mutually agreed payment dates may be valid. However, after resignation, the employer no longer receives regular labor services, necessitating compliance with the statutory 14-day payment period.
Contract Over Law?
Even if an employment contract or resignation letter includes specific payment terms, they cannot supersede labor law. Claims like “signed contracts justify delayed payments” are legally untenable.
Understanding Resignation Agreement Clauses
Some resignation agreements include clauses where employees “agree” to delayed payments. Even if an employee supposedly consents, such clauses are often considered coerced and lack legal standing due to the employer’s dominant position.
Employee Advantage in Non-Agreement Situations
When an employee has not consented to such clauses, or has not signed the resignation document, the company cannot use these as grounds for delaying payment. Unauthorized inclusion or coercion can lead to legal disputes.
Steps to Take When Wages Are Delayed
If wages or severance remain unpaid beyond 14 days post-resignation, it constitutes wage theft. Employees can take the following steps to address this:
Filing a Complaint with the Labor Office
The most common course of action is to file a complaint with the local labor office. Upon filing, a labor inspector will investigate, and if the company is found non-compliant, corrective orders or fines may be issued.
Requesting a Confirmation of Unpaid Wages
After filing a complaint, employees can request a confirmation of unpaid wages, which can be used as evidence in civil litigation or claims for government wage subsidies.
Conclusion: Upholding Employee Rights
The company’s stance to delay payments until the end of the following month is likely a violation of labor law, regardless of what the contract states. Employees should be aware of their rights and take proactive steps to ensure that their legal entitlements are not infringed upon.