Many employers have new hire packets and hiring procedures, but just as important, and often overlooked by employers, is to have a process for departing employees. It is important to ensure an employee departing the company provides all items back to the company and is provided any legally required documentation, and is a good opportunity to take steps to address potential liability. Today’s Friday’s Five provides the five items that should be on California employers’ separation checklist:
1. List of documents to be provided by employer.
As I previously wrote about, employers should have a termination packet of documents that it is required to provide to separating employees, such as:
- Notice of Change In Relationship
- COBRA and Cal-COBRA notices
- Health Insurance Premium (HIPP) notice
The Company should also consider generating its own forms requesting company property to be returned (such as laptops, parking cards, keys, etc…) from departing employees.
2. Ensure final paycheck is issued in accordance with the deadlines set by law.
The law generally requires the employer comply with the following deadlines for providing final paychecks:
- An employee who is discharged must be paid all of his or her wages, including accrued vacation, immediately at the time of termination. This does not mean that the company cuts the check and mails it to the employee, the check must be provided to the employee at the time of termination. See below for more details about when and where final checks have to be presented to employees.
- An employee who gives at least 72 hours prior notice of quitting, and quits on the day given in the notice, must be paid all earned wages, including accrued vacation, at the time of quitting.
- An employee who quits without giving 72 hours prior notice must be paid all wages, including accrued vacation, within 72 hours of quitting.
- An employee who quits without giving 72-hours’ notice can request their final wage payment be mailed to them. The date of mailing is considered the date of payment for purposes of the requirement to provide payment within 72 hours of the notice of quitting.
- Final wage payments for employees who are terminated (or laid off) must be made at the place of termination. For employees who quit without giving 72 hours’ notice and do not request their final wages be mailed to them, is at the office of the employer within the county in which the work was performed.
Not every situation would warrant conducting an exit interview. If the separation is not amicable it may make the situation worse if conducted, or it may be an opportunity to separate on a better note. It simply depends on the situation. However, employers should consider whether it is needed to not and not simply have a policy not to conduct them.
4. Evaluate whether a severance agreement would be appropriate.
Under California law, severance is not required. However, employers can offer severance to employees for numerous reasons: there is a layoff and the employer wants to provide something to the employees, the company entered into a contract with an executive to provide severance if certain conditions were met, or the separation is high risk and there is potential litigation between the parties. If an employer offers severance payment to a departing employee, they should always have the severance agreement reviewed by an employment attorney to ensure that it contains a broad release of claims. My previous article discussed in more detail issues about severance and severance agreements.
5. Have established protocol for references and disclosing why the employee left the company within the company itself.
Employers often establish that it will only confirm the title and dates of employment for former employees, and, if authorized by the former employee, the former employee’s final pay rate. Employers do this to avoid potential claims for misrepresentation, violation of privacy, and defamation. If employers provide more information about former employees, it should be done very carefully with the guidance of employment counsel. Also, employers need to be careful about disclosing the reason for an employee departure within the company, as that may violate the former employee’s privacy rights as well. Employers should remind employees and management not to disclose this information to people in the company that do not have a reason to know.