Terminations can be one of the hardest parts of an employer’s job. Sometimes good employees resign and sometimes we need to let someone go. No matter what the circumstances are, certain documents must be given to the departing employees. There are also rules around the timing and ways to give employees the final check.
A “Notice of Change in Relationship” is required at separation. This is a document that includes the employee’s name, SSN, effective date, and separation reason. For involuntary terminations, you need to give the employee a “For Your Benefit” brochure about unemployment, available from the EDD website. All employees should be given a HIPP notice from the Department of Healthcare Services about health insurance premiums. If you offer health insurance, be sure the employee gets COBRA benefits continuation information (your benefits broker can help with this). It is also a good idea to ask the employee to sign an acknowledgement that they received the final check including proper payment.
At the time of termination, pay out any wages including unused, accrued vacation or PTO. You don’t have to pay out unused paid sick leave, unless your policy provides this benefit. Checks must be paid at the employee’s normal work-location at the time of separation. If the employee requests the final check by mail, it is critical to get the request in writing and include a mailing address. Never mail a final check without getting a written request first or you could be charged significant waiting time penalties. If you are unable to locate an employee who has separated, please document the attempts you took to reach the employee to provide the final wages. If necessary, the Department of Labor Standards Enforcement has a process in place to hold the final wages on your behalf.
For employees who resign, if they quit with 72-hours’ notice or more, you must have the final check ready on their last day of work. If an employee quits with less than 72-hours’ notice, pay the final check within 72 hours after notice is given.
We know that terminations can be tricky and that your questions will go beyond these basics. We can give you guidance and other recommended documents depending on each specific situation. Every termination is unique, so call us to talk it through to help make a difficult situation a little bit easier.