Five Actions to Take When an Employee Departs

14 Apr

It is never easy when an employee leaves regardless who decided upon the departure. There are things to consider and issues to address in order to have a smooth transition and abide by state and federal laws. Below are the five things to take under consideration.


1. Ensure Prompt Payment – It is always best practice to pay a departing employee, as soon as possible after their departure, for any salary, commission, holiday or vacation pay or other benefits they may have accrued. In addition, if an employee makes a written demand for payment, an employer has only 24 hours to pay the employee before penalties and other consequences may result (including the right to attorneys’ fees if a suit is brought).


2. Provide COBRA Information – COBRA is a federal law that gives employees the right to continue coverage in a group health plan following their termination or departure. COBRA only applies to employers with 20 or more employees, including self-insured employers. Employers and plan administrators are required by federal and state law to provide written notice of the right to continue coverage, along with the cost of the coverage and how to apply for the coverage within 44 days under federal law and 10 days under state law.


3. Property Recovery – Ideally, an employee should take all personal property with them upon departure. If there are other personal items of the employee remaining, they should be returned immediately and the employee should sign a written receipt of the items returned. The employer also has the right to retain their property including assets and information the employee had on the business.


4. Reminder of Obligations – The best time to remind an employee of obligations the employee has to the employer is at the time of termination. Obligations include such things as non-disclosure or non-compete agreements that were signed by the employee during or over the course of the employment. Presenting them with a copy and having them sign a receipt can protect you against future claims that they were “unaware” of such agreements.


5. Severance in Exchange for Finality – When an employee leaves, consult with an attorney to determine whether offering the employee a severance package in exchange for a release of all claims would be beneficial. This is especially important if the termination was contentious.


Chris Renz and Bill Sjoholm, shareholders, contributed to the contents of this article. Chris concentrates his practice in the areas of general civil litigation, real estate litigation, employment litigation, construction litigation, and criminal law. Bill concentrates his practice in the areas of employment law, commercial law, plaintiffs’ personal injury, and general civil litigation. Chris and Bill can be contacted at or, respectively.


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