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When you terminate employment or an employee quits voluntarily, here is what you must provide to the exiting employee:

Final paycheck (including all accrued but unpaid wages)

  • include all accrued but unused vacation time or paid time off if required by state law or by policy
  • include unpaid but earned bonuses
  • deadline—state law will dictate whether payment must be on termination date, next payday, or other date (e.g., within three days of termination)
  • check state law  on whether direct deposit authorization is ok for final paycheck
  • beware of special deductions or offsets from final pay, or claw-backs of previous pay—get legal review
  • earned commissions – payout per commission plan schedule in most cases

COBRA Notice of Qualifying Event and Election Form

  • send by ordinary U.S. Mail to home address (official method of service)
  • best practice:  provide courtesy copy to employee by email or express mail
  • many insurance carriers handle these notices

Health Insurance Premium Program (“HIPP”) Notice for Medi-Cal participants (California employers)

Notices relating to applicable benefit plans and continuation (including disability extension, and conversion coverage options under any employer-sponsored coverage — life insurance, 401(k), Long-term and Short-term disability, or Health Care Spending Account)

 

For terminations by the Company (not resignations), these additional documents must be provided:

Notice to Employee of Status Change (California)

Notice of exact date of termination and exact date of benefits termination (New York) within 5 days of termination

California Employment Development Division (“EDD”) unemployment benefits booklet “For Your Benefit” (download from EDD home page at ca.gov)

 

For any termination (involuntary or quit), it is best practice—but not required—to give the employee the following:

Any confidentiality or non-compete agreement that was signed by the exiting employee (to remind them of post-termination obligations)

An exit interview checklist reconfirming employee obligations to the Company

 

Common Questions and Answers

Question:        Do I have to give an employee the reasons for termination?

Answer:          As a general rule, this is not required by law.  However, in many cases it is best practice to identify the general reasons for termination, even for an at-will employee where no reason is required.  Get a few minutes of legal advice before providing these reasons.  You will be held to what you say, and will not readily be able to add or subtract later.  Legal risk can differ depending on what you say and how you say it.

Question:        Do I have to give the state unemployment agency the reasons for termination?

Answer:          When your former employee applies for unemployment benefits, you will probably be notified of the claim and the employee’s version (!) of the reasons for termination.   It is usually required (and often best practice) to respond.  Often, you will only need to state whether the termination or resignation was voluntary or involuntary; but sometimes a more complete statement of reasons and related facts may be needed. Generally it is advisable to provide more details if the employee lists a false reason, or accuses you of violating the law (e.g., discrimination).  Get a few minutes of legal advice before responding.  You will be held to what you say, and it can minimize or aggravate legal risk.

NOTE:  Additional documents could be required in certain states, under certain separation circumstances (such as individual misconduct or group terminations) or for certain employees.

Your attorneys can assist with reviewing these documents and tailoring them for your specific needs.  Your attorneys can also provide guidance and assistance in certain special situations, such as where you are considering a separation agreement, a release of claims, a misconduct termination, or a reduction in force (terminating a group of employees).