This article addresses specific compliance issues around terminating employees in Massachusetts. If you'd like to know how to terminate an employee within Justworks, please visit Terminating Employees.
Laws in Massachusetts require that employees be paid their owed wages at the time of termination if termination is involuntary. If an employee resigns, then the final pay can be paid out with regular payroll via direct deposit or otherwise.
This means that if an employer chooses to let an employee go, the employer is responsible for paying the employee all due wages at the time of termination by paper check. The employer cannot mail or direct deposit the employee's final pay without the employee's express written consent.
The implications of this law are that if the employer is currently employing someone in Massachusetts and the relationship is terminated by the employer, the employer will either have to collect written consent allowing them to pay by direct deposit (and therefore within the normal Justworks flow), or the employer will have to cut a paper check on the spot and add the wages to Justworks later for tax purposes.
Employers are also required to pay out any accrued unused vacation. All vested vacation must be paid to the employee as wages at the final rate.
Additionally, the following forms are required to be presented to all exiting employees regardless of the reason for leaving:
The unemployment insurance pamphlet MUST be provided to all separating employees: (http://www2.massgeneral.org/jobs/uighnotice.pdf)
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.