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Ask HR: How to Handle Compensation for Early Resignations

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?

Question:

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.


Jenny, HR ProOver

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.


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