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An employer’s duty to pay wages upon job termination

On Behalf of | Sep 22, 2021 | Wage & Hour Claims |

Many employees in Kentucky who are unhappy in their jobs are reluctant to quit because they worry that the employer will withhold their last pay check or make deductions that will significantly reduce the amount of net pay. Fortunately, the laws of Kentucky carefully define the employer’s duty to pay an employee’s wages upon termination of employment. These same laws restrict the kinds of deductions that an employer can use to reduce the net amount of an employee’s paycheck even if the employer is not leaving the position.

The general rule

In almost every case where the employee leaves the job, the employer must pay all wages earned by the employee by the next regular pay day or within 14 days of the separation of employment, whichever is later. This rule applies to employees who quit or resign, employees who are involuntarily terminated, discharged or laid off.

Limitation on employer deductions

Some employers do not realize that they are subject to significant restrictions on their ability to unilaterally reduce the employee’s wages. Many deductions are expressly prohibited. None of the following can be unilaterally deducted from a paycheck:

  • Fines
  • Cash shortages in a common money till or cash box used by two or more persons
  • Breakage
  • Losses due to acceptance of a bad check
  • Lost or stolen property
  • Losses caused by defective or faulty workmanship
  • Damage to property
  • Default by a customer on a credit account if the losses are not attributable to the employee’s intentional or willful disregard of the employer’s interests.

Deductions from an employee’s paycheck can be made only if authorized by local, state, or federal law or the employee has consented to withdrawals to pay insurance premiums, hospital and medical dues, or other deductions which do not constitute a rebate or deduction from the standard wage arrived at through the collective bargaining process.


An employer’s obligation to pay wages without modification or reduction can easily become a complex legal issue. Anyone with questions about the extent of the employer’s obligation or the employee’s right to be paid may wish to consult an experienced labor or employment lawyer for advice how the law applies to the situation at hand.