Employees leave companies to pursue better growth opportunities, find a new challenge, or seek a change in their career direction. As an employer, your job is to retain valuable employees who think in favor of the organization and contribute their best work. But, it is wishful thinking to expect your staff to not leave the organization. When an employee resigns, you need to ensure your organization doesn’t miss a beat during the termination process.
The process of employee termination is a crucial component of an HR Manager’s administrative functions. If executed correctly, it can protect the organization from potential litigation and preserve the respect and dignity of the employee.
Employee Termination Checklist
Whether the employee has chosen to end their employment or is being involuntarily terminated, this Employee Termination Checklist will help you follow best practices and maintain compliance.
1. Proper documentation
Before you begin with the termination process, you need to put documentation in the employee file. You may include all documentation, such as warnings, disciplinary actions, performance reviews, etc. to support the case for firing that employee.
2. Prepare the termination letter
If an employee expresses their intention to leave your employment, ask them to write a resignation letter that states their name, department, position, the reason for termination a well as the termination date. (Note: Companies request a minimum 1-week notice, when an employee decides to leave the organization.) Conduct an exit interview with the employee to find out about your organization’s work environment.
In case of involuntary resignation, you need to provide a letter of termination that notifies that he or she has been fired. This letter should be reviewed by a labor and employment attorney so as to prevent further headaches down the lane from a scorned ex-employee.
3. Reclaim company property
Effective on the date of termination, whether mutually or at an agreed-upon date, you need to ask the employee to relinquish all company-issued property. This includes keys, laptops, cell phones, entry swipe card, tablets, company books, and any company documents in their possession. If these items are kept at the employee’s place of residence, schedule a time for the employee to return them.
The employee should provide passwords and other information pertaining to accessing files on their computer.
Ensure that you remove the employee from your computer network. They should no longer be able to receive company emails, updates, messages from coworkers, or calls from clients. Terminated employee shouldn’t be able to access the company database, either.
4. Fill out the paperwork
Check if you are required to provide COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage to your employee. COBRA allows employees to temporarily continue their insurance plan for a certain amount of time following their termination. These include health insurance, unemployment insurance, retirement plans, outplacement, life insurance, HAS or HRA, and other plans.
Any unpaid expenses or bonuses should be included in the terminated employee’s final paycheck in accordance with applicable state and federal wage laws. Check with state laws for requirements regarding payment of accrued-but-unused vacation, person, and/or sick time, as well as when the final check must be issued.
5. Inform staff and clients
It is important that you let your staff or customers know that the employee is leaving. It’s best to not broadcast your employee’s reason of leaving. Reassure them know that business will run smoothly during the transition period and let them know who will assume the terminated employee’s responsibilities.
6. Review non-compete agreement
If the employee signed a non-compete agreement at the beginning of their employment, you need to review it with them during the exit interview. If the employee never signed such a document, most employee handbooks cover a clause or code of conduct paragraph about non-disclosure of confidential information or trade secrets. Review this from the NDA or employee handbook and remind that employee that any breach of company-related confidentiality will be addressed effectively.
7. Exit interview
An exit interview is one of the most important things to be checked off the employee termination checklist. During the exit interview, you can answer any questions or queries the employee has regarding the benefits or the final paycheck. Employers in certain states are also required to provide information regarding how they can claim unemployment benefits.
An exit interview is also when HR Manager should encourage the employee to find how they related to their company culture and coworkers, work environment, and company practices. This would allow you to make changes as you see fit.
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