Several federal laws regulate wage payments, including the Fair Labor Standards Act (FLSA), the Davis-Bacon Act and the Service Contract Act. Utah law also imposes state wage payment requirements. When federal and state laws are different, the law that is more favorable to employees will apply.
The Utah Antidiscrimination & Labor Division (UALD) enforces wage payment standards throughout the state.
Payment of Wages
Unless an exemption applies, all employers in Utah are covered by Utah wage payment laws. Exempted employers include:
- State, county and incorporated city or town governments (and their political subdivisions);
- Employers engaged in farm, dairy, agricultural, viticultural or horticultural pursuits (these employers are still subject to separation of payroll rules);
- Employers engaged in stock or poultry raising (these employers are still subject to separation of payroll rules);
- Household domestic service; and
- Employers with a valid agreement for payment with their employees.
Method of Payment
Employers must pay wages to their employees in lawful U.S. currency with cash, check, direct deposit or pay card (such as a pre-paid debit card).
An employee may refuse to receive his or her wages through direct deposit by filing a written request with the employer. However, employees may not refuse to have their wages paid through electronic deposit if:
- The employer’s tax deposits are at least $250,000 for the calendar year preceding the pay period for which the employee is being paid; and
- At least two-thirds of the employer’s employees have their wages paid through direct deposit.
Employers may pay their employees through pay card only if:
- The employee is able to withdraw the full amount of earned wages without incurring a fee in a single transaction;
- The employee can access the full amount of his or her earned wages on the applicable payday; and
- The employer provides the employee with an itemized statement of deductions from the employee’s gross wages for each pay period. The statement may be provided electronically if the employee can easily and immediately access the information and print a paper copy without cost.
Frequency of Payment
Employers must pay employee wages at least twice per month, on pre-established paydays. Regular paydays must generally be within 10 calendar days after the end of the work period. If a payday falls on a Saturday, Sunday, or legal holiday, wages must be paid on the day preceding the Saturday, Sunday, or legal holiday.
However, employers may pay employees who are hired on a yearly salary once per month, on or before the seventh day of the month following the month for which services are rendered.
Utah laws do not restrict an employer from paying wages to their employees at earlier days or at more frequent intervals. Any agreement between an employer and its employees for different wage payment arrangements must be approved by the UADL before it becomes effective.
Employers must notify every employee at the time of hiring of the day and place of payment and his or her rate of pay. In addition, employers must notify employees of any change in the day, place or rate of payment, before any changes take place. Alternatively, employers may display this information in a conspicuous place where employment posters are regularly posted.
Employers that fail to comply with notice requirements may be charged with a misdemeanor.
Last Payment of Wages
When an employer terminates an employee, Utah law requires the employer to pay all wages due to the employee within 24 hours of termination. An employer satisfies this requirement if the employer:
- Mails the wages to the employee within the 24-hour period (a postmark date on the mailing envelope is sufficient if the postmark date is no more than one day after the date of separation from employment);
- Initiates a direct deposit for the employee’s wages within 24 hours; or
- Hand delivers the wages to the terminated employee.
Employers can pay an employee’s wages by the next regularly scheduled payday if the employee resigns or ceases to work as a result of an industrial dispute.
Sales agents employed on a commission basis who have custody of accounts, money, or goods of their employers are exempt from these requirements if the net amount due to them is determined only after the employer performs an audit or verification of the sales agents’ sales, accounts, funds, or stocks.
Withholdings and Deductions
Employers may not withhold all or any portion of an employee’s wages unless the withholding or deduction is authorized by law or by the employee.
Common deductions authorized by law include taxes, union dues, FICA contributions, garnishments, and court-ordered deductions such as child support.
Common deductions authorized by employees include funds for employee participation in hospitalization and medical insurance plans, savings plans and deposits to financial institutions, stock purchases, charitable donations, retirement plans, supplemental retirement plans, loan payments, loan or wage advances, employer goods or services, and employer equipment or property. These authorizations must be made through a valid and legal agreement.
In general, employers must record each withholding with accuracy. Wage deductions and withholdings cannot reduce an employee’s gross wages below the minimum wage rate, unless authorized by law. Employers may not derive any financial gain from wage deductions.
Whenever a deduction or withholding takes place, employers must provide their employees with an itemized statement of deductions and withholdings. In addition, an employer licensed under the Utah Construction Trades Licensing Act must provide each employee with a written or electronic statement on payday containing:
- The employee’s name;
- The employee’s base rate of pay;
- The dates of the pay period for which the individual is being paid;
- The employee’s hourly wage rate (if applicable) and the number of hours the employee worked during the pay period;
- The amount of and reason for any money withheld, including state and federal income tax, Social Security tax, Medicare tax and court-ordered withholdings; and
- The total amount paid to the employee for that pay period.
Utah law requires employers to keep a true and accurate record of the number of hours worked and the wages paid for every employee paid on an hourly basis. Employers must keep these records for at least one year (three years for employers licensed under the Utah Construction Trades Licensing Act). The UALD may inspect these records at any time during business hours.
Should a dispute over wages arise between an employer and their employee, Utah wage payment laws require the employer to provide the employee with a written notice of the amount of wages that are not in dispute. Utah wage payment laws also require the employer to pay this amount, unconditionally and within the time frame presented above. An employee who accepts undisputed wages does not give up any claim he or she may have on the disputed amount.
The UALD has the authority to investigate violation claims and enforce compliance with wage payment laws. Employers implicated in a wage dispute must grant the UALD access to all payroll records in any place of business or establishment that is covered by the UMWA.
Utah wage payment laws prohibit employers from retaliating against any employee because:
- The employee filed a complaint or testified in a proceeding to enforce wage payment laws;
- The employee is going to file a complaint or testify in a proceeding to enforce wage payment laws; or
- The employer believes that the employee may file a complaint or testify in a proceeding to enforce wage payment laws.
Retaliation includes any adverse action an employer may take regarding the terms, privileges, or conditions of an employee’s employment, including discharge and demotion. The UALD may require a retaliating employer to cease and desist from any retaliatory action, compensate the employee for any wages or benefits lost or both.
Employers that violate Utah wage payment laws may be subject to criminal, civil and administrative penalties.
For more information on Utah employer laws, click either of the buttons below.Employee Leave Guide Overtime Laws Guide
Disclaimer: This guide is meant as a starting point for compliance by Helpside’s clients. As such, Helpside has not created it to apply to a client’s particular circumstances. Thus, the content should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem, clients are advised to seek specific advice. Finally, please note that relevant laws may change after publication.