What to Do When an Employee Leaves
Breaking up is hard to do…
Bidding farewell to an employee is never an easy task. Whether the separation is voluntary (resignation or retirement) or involuntary (discharge, layoff or disability), there are factors to consider:
State laws dictate when and how the departing employee must be paid, what benefits are to be provided, etc. It’s important that you know what’s required based on where your business operates and the circumstances of the separation.
Impact on Morale
Regardless of the reason, when an employee leaves it takes a toll on morale. If the employee was terminated, remaining staffers may wonder if their own job is in jeopardy. And if the employee left on their own accord, others may wonder if there is something better out there for them too.
Transfer of Work
How will you handle the workload that is left behind by the departing employee? Will the employee cooperatively transfer his/her responsibilities? Or will important documents “accidentally” find their way into the shredder? Assuming your other employees will pick up the slack will only intensify the impact on morale.
Here are four actions to take to protect your company’s interests, assets, and reputation:
1. Prepare the Final Paycheck
An employee who resigns or is discharged must be paid through the last day of work, plus any unused paid time off (PTO), less outstanding loans, advances or other agreements the employee may have with the company, in compliance with state laws. In New Jersey, New York, and Pennsylvania, the final paycheck must be delivered the next scheduled payday regardless if the employee quit or was fired.
2. Recover Company Assets
In Fresno, CA the hunt is on for a man who can be seen on camera stealing laptops and power tools from his former place of employment—not once, but five times! How is he able to pull off these crimes so easily? By using the company master key that he held onto after he was fired. Ironically, theft was the cause for his termination.
To avoid a similar situation at your workplace, identify and retrieve any items in the employee’s possession that should be returned (keys, access cards, company credit cards, laptop, cell phone, computer disks, flash drives, etc.)
If you utilize HCM software for tracking employee property, this task can easily be accomplished. If the employee has property at home (a laptop computer etc.) arrange for the employee to return items promptly or arrange for pick-up. Additionally, be sure to deactivate passwords and end access to voicemail, email, etc.
3. Prepare Necessary Paperwork
There are many necessary forms associated with an employee’s departure from your organization, including:
- Termination letter or Severance Agreement – states the effective date of termination and explains the final payment being made at the time of termination.
- Benefits Summary – a clear statement of accrued benefits and notices regarding post-termination benefits, such as continuation of health coverage and 401(k) plan information.
- Instructions for claiming unemployment benefits
Having a human capital management (HCM) solution with a single database streamlines the distribution of these forms. A workflow can be put into place that will allow employees to access and sign the forms digitally, and then alert the appropriate people to take the following actions needed.
4. Assess the Workplace Environment
When an employee leaves your organization it’s a good idea to take a step back and assess (1) why and (2) the impact it will have. Gather this information by conducting an exit interview with the departing employee and by surveying the employee’s supervisor and colleagues. If areas of improvement are identified, this is the time to address them. Make a formal plan as to how the departing employee’s workload will be handled, taking into consideration your remaining employee’s interests.
Losing an employee, regardless of the reason, is never pleasant. But these steps can help minimize the negative impact and even help your organization mature and grow.
Easy Offboarding with Orange
Orange, Balance Point’s cloud-based HCM solution, streamlines the offboarding process. With just a few clicks, the admin can:
- Block the direct deposit to ensure there are no payout mistakes
- Choose the last day of employment with the reason they are leaving
- Choose a stop date for benefits for that employee
- Trigger COBRA notices
- Track any assigned company assets
- Create a Termination Report
Schedule a call to discover if Orange is right for your organization.