Employers can't withhold an employee's pay
Published 07/06/99

Can an employer who is owed money or property from a departing employee withhold his pay? The answer is no. While the easiest way to collect those monies owed or obtain leverage for the return of property is to withhold pay due the employee, this is illegal in New Hampshire. An employer must unconditionally pay all wages conceded due by the employer.

Under New Hampshire statutory law, an employer must provide an employee his wages in full within 72 hours of an involuntary discharge; in the case of an employee resignation, the employer must pay the employee’s wages no later than the next regular pay period. If the employee gives at least one pay period notice of his intention to resign, the employer must pay all wages earned by the employee within 72 hours of the employee's resignation. It is important to note that the law defines the term "wages" broadly as generally compensation for the benefit of the employee and agreed to by the employer, for labor or services rendered by the employee. Specific examples within the statute include hourly wages, commissions, health and welfare, and pension fund contributions required pursuant to an agreement and payments based upon task or piece work.

In the situation where an employee wrongfully retains the employer's property, the employer may bring a civil action, called a replevin action, seeking a court order forcing the return of the property. Alternatively, under appropriate circumstances it may be prudent for the employer to get law enforcement involved, but the employer should not withhold wages as leverage to get the property back. If actual theft is involved and a police report has been filed by the employer against the employee, the New Hampshire Department of Labor (DOL) may support the employer's withholding of unpaid wages until the matter is resolved in Court. In such a circumstance, it may be prudent to consult with legal counsel to determine if the employee's actions constitute theft and to obtain advice on the most appropriate action to take.

Liquidated damages for up to twice the amount of the wage claim and attorney's fees can be rendered against the employer if it has wrongfully withheld wages. Therefore, employers should take this matter seriously and not attempt to use wages that are otherwise due to offset the employer's claims against the employee, or as leverage to obtain a certain result with respect to the employee, regardless of the inappropriateness of the employee's conduct.

J. Daniel Marr is a director and shareholder at Hamblett & Kerrigan, PA whose legal practice includes counseling businesses and business persons on a variety of legal issues and advocating on their behalf. Attorney Marr is also an adjunct professor at Daniel Webster College where he teaches business law. You can reach Attorney Marr by e-mail at: dmarr@hamker.com

This information is general information and may not reflect the most current legal developments, verdicts or settlements. The information provided should not be relied upon as an indication of the actual state of the law or of future developments. The information contained on the Hamblett & Kerrigan website is for informational purposes only and does not constitute legal advice. If the information referenced may be of legal importance to you, you should consult with an attorney to provide you with legal guidance and opinion as the the effect of the current law upon your situation.