Your Responsibilities When an Employee Quits

Have you seen a lot of voluntary turnover in your industry due to the economy over the last several years?

While some business leaders have to be more familiar with the steps involved in terminating an employment relationship than others, each business owner must take responsibility when an employee decides to quit their job. If you have recently been on the receiving end of an “it’s not you, it’s me” conversation with an employee that has decided to leave on their own accord, you may have some questions about your responsibilities in this breakup. The following two scenarios can help you navigate this unfamiliar territory.

Paying for a two-week notice…

If an employee gives his/her two-week notice, are you required to pay for the two-weeks? If you decide to accept the termination effective immediately or the employee is classified as nonexempt, then you are not required to pay the employee through the notice period. If the person is exempt, you are required to pay a portion of his or her salary for the last week of employment.

While it is certainly nice for an employee to give a two-week notice, that person is not obligated to give it, nor are you obligated to allow him or her to work through the notice period. However, accepting an employee’s resignation early puts the company in a bit of a gray area and in some states the employee could be eligible for unemployment benefits.

Will the company be responsible for unemployment payments?

That will depend on the state. The process for unemployment benefits varies from state to state and is done on an individual basis. In most states, employees are disqualified from benefits if he or she voluntarily quits a recent job without good cause. However, they may be eligible for benefits if unemployed through no fault of the employee’s own.

Unused vacation time…

If an employee has resigned to take a job with another company and wants their current company to pay out their unused vacation time, are they required to do this? Like many personnel conundrums, this is a matter of state law. Some states consider earned vacation time to be part of wages and any unused vacation earned by the employee must be paid out when he or she quits. Other states do not require you to pay out unused vacation unless you have a policy or an implied agreement that says you will do so. If you operate in one of these states and you do not want to pay out unused vacation, you should establish a written policy that specifically outlines the conditions under which payout would be denied, such as an employee quitting without notice.

As with everything in business professionalism is key. The best way to make sure you are doing everything according to your state is to either hire legal counsel or ensure your human resources department is up-to-date on their termination policies so you are not held accountable for incorrect out processing of a former employee.

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