Ask HR: How to Handle Compensation for Early ResignationsPosted on March 14, 2016
It happens to every employer: an employee decides to leave the company. Sometimes, the employee leaves on great terms and finishes out a two-week notice. Other times, unfortunately, a manager may wish for the employee to leave right away. In the case of an involuntary early departure, when does compensation for the affected employee end?
We had an employee give his two weeks’ notice, but the manager decided to let him go immediately. We paid the employee through the last day he worked, but he claims he should be paid for the two weeks he had planned to work. What are the legal requirements here?
Answer from Jenny, HR Pro:
As long as you don’t have an employment contract with the employee, a collective bargaining agreement that applies to the employee, or a handbook policy that requires a certain period of notice, you may opt to accept his resignation early.
You do not have to pay the employee for the portion of the notice period during which he performed no work. So if he was a non-exempt (overtime-eligible) employee, you simply need to pay him for all time worked. And if he was an exempt employee, you only need to pay him his regular salary through his last day worked.
A final note: terminating the employee early without providing pay through the unworked notice period is legal, but it may affect the employee’s unemployment eligibility. The company will essentially be turning a voluntary resignation into an involuntary termination. Therefore, he may become eligible for some unemployment benefits.
Over her 15 years of experience, Jenny has specialized in helping small to mid-sized businesses across a variety of industries reduce their risks and manage employee relationship issues. Jenny holds a Bachelors of Business Administration (BBA) degree in Human Resources Management from the University of Georgia and a Masters of Business Administration (MBA) degree with a concentration in Human Resources Management from Georgia State University.
This content came from a team of HR professionals at HR Support Center. Businesses like yours can pay a yearly fee for HR Support Center and receive awesome subscription perks like these:
- Legal advice
- Employee handbook help (creating a new one or updating an existing one)
- Custom HR forms, letters, tools, and other documents
- Tons of Q&A
- News on government activity that could affect you
- Training on common HR activities like hiring
- Thought leadership articles
The list goes on. HR Support Center is not only feature rich, it’s inexpensive: one entire year of HR Support Center is cheaper than one hour of a typical attorney’s time. Contact us today to sign up.
Subscribe to Our Resource Center Digest
Enter your email below to receive a weekly recap of the latest articles from Paycor’s Resource Center.
Check your inbox for an email confirming your subscription. Enjoy!