Discipline & Termination | 

8 Action Steps When an Employee Resigns

You just found out an employee is resigning. Whether they gave you advance notice or not, there are steps you can take to help ensure a smooth transition. Here are eight things to consider when an employee quits:

#1: Obtain a resignation letter.

Ask the employee to sign a resignation letter to document that the employee left voluntarily and the effective date. Keep the resignation letter in the employee's personnel file. If you can't obtain a resignation letter, document the reasons for the separation and keep that record in the employee's personnel file.

#2: Transfer responsibilities/knowledge.

Meet with the employee and his or her supervisor to determine the status of current projects. Create a plan to reassign the employee's duties, document critical work processes, and if time permits, train co-workers on key responsibilities.

#3: Provide required notices.

Federal and state laws may require that you provide certain information to departing employees. For example, some states require employers to provide a separation notice explaining the reason for, and date of, the separation for unemployment claims purposes. Note: To be eligible for unemployment benefits, individuals who resign must generally show that they quit for "good cause," the definition of which may differ from state to state. Under federal and/or state law, you may also be required to provide information concerning health and retirement benefits, such as health insurance continuation (commonly called COBRA under federal law). Check your federal and state requirements to ensure compliance.

#4: Comply with final pay laws.

Under federal law, final pay is due by the next regular payday, but many state laws have stricter deadlines. Additionally, depending on your state, you may be required to include accrued, unused vacation and paid time off (PTO) in the employee's final pay. Check your state law to ensure compliance and keep a record of when you provided the employee with their final pay. Note: We cover final pay requirements in greater detail in our Final Pay: When is it Due, What Does it Include, & More Tip.

#5: Obtain company property.

Before the employee's last day, have the employee return any company issued property, such as uniforms, ID badges, cell phones, laptops, and building keys. Additionally, take the necessary steps to disable building codes and access to computers and confidential data. Note: Federal and/or state laws place restrictions on an employer's ability to make payroll deductions for unreturned property. Check back next week for more information on these rules.

#6: Confirm mailing address.

Verify that you have the correct mailing address so you can send final pay (if applicable), a Form W-2, and any other correspondence to the individual. Also, ask the employee to notify you if he or she has a change in address.

#7: Notify key staff and contacts.

Prepare a list of the staff, key clients, and contacts that should be aware of the employee's impending departure. Explain who will be handling his or her work responsibilities in the future and identify a contact who can address any questions they may have. In general, avoid disclosing the reason for the employee's departure.

#8: Conduct an exit interview.

Turnover can be costly, and exit interviews are one way to find out why employees are leaving. To encourage candor, consider asking a neutral party to conduct the interview rather than a direct supervisor. Based on the feedback you receive, consider what changes you can make to the work environment. On the employee's last day, wish them well and thank them for working for your company.


Seeing a good employee leave is hard, but being prepared can help make the transition easier.


    Most Popular

    Year-End 2021 Payroll Guide