Can You Withhold an Employee’s Final Paycheck Until They Return Company IT Equipment?

It’s a common and frustrating situation: an employee leaves your company, and the laptop, monitor, or phone you issued never comes back. Naturally, you might wonder — can we hold their final paycheck until they return their IT equipment?

The short answer is: usually not.

Under federal law and most state laws, employers are required to pay all earned wages promptly, regardless of whether company equipment has been returned. In fact, withholding a final paycheck can open you up to legal penalties, wage claims, and fines, especially in states like California, Massachusetts, and New York, where wage laws are particularly strict.

So What Can You Do Instead?

Instead of risking legal trouble by delaying pay, companies should take proactive steps to secure their assets — before final paychecks are even a consideration.

• Make sure your IT equipment return policy is clearly outlined in employment contracts and offboarding procedures.

• Track assigned assets from day one, so there’s no confusion at separation.

• And most importantly, partner with a professional retrieval service like Alucid Solutions.

At Alucid Solutions, we handle the entire IT asset retrieval process — from contacting the former employee to providing prepaid shipping materials and coordinating pickups for larger items. We remove the awkwardness, reduce risk, and ensure you get your equipment back quickly, without putting pressure on your internal teams — or crossing any legal lines.

Bottom Line

Withholding final pay can put your business at legal risk — but that doesn’t mean you’re powerless. With the right processes (and the right partners), you can recover your IT assets efficiently, protect your budget, and stay on the right side of labor laws.

The insights provided herein are for informational purposes only and should not be construed as legal advice. The information is not exhaustive, and laws vary significantly by jurisdiction and specific circumstances. You should consult with a licensed attorney in your relevant jurisdiction for advice regarding your individual situation.