Letting an Employee Go Before The Last Day of Their Resignation


I had an employee give 4-weeks notice that she was leaving. Through online advertising and word of mouth, we found a wonderful new employee almost immediately. The new candidate was available to start work right away, so I ended up letting the original employee go a week sooner than her stated resignation date. Any legal problem with this?
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Generally speaking, it should be smooth sailing from here.

In general, unless you have a policy which asks the employee to give a specific amount of notice, or a contract requiring a specific amount of notice, you are under no legal obligation to retain the employee through the resignation date.

Often, (emphasis on “often” and not “always”) when we see this, an employer accepts a two-week notice, pays the departing employee for the remainder of their scheduled work time, and then sends them on their merry way immediately.
Hold your fire! Terminations can be risky. Click to download CEDR's free separation guide.

Still, the waters can get choppy.

But there are scenarios where this course of action can lead to less-than-merry results for your business.

First, most states will see a resignation as a disqualifying factor with respect to eligibility for unemployment. However, accepting resignation and terminating before the last day stated in that resignation without paying for the entire notice period can sometimes result in the employee’s eligibility for unemployment benefits.

Paying out for the entire notice period can mitigate this possibility in many states, but unemployment is an unpredictable system and you will want to take every step possible to document that this was a resignation rather than a termination.

If the employee resigned in writing, you simply keep a copy of that letter and have a CEDR Solution Center advisor assist you with a confirmation of resignation letter to wrap up the details of employment. If the employee resigned via text message or other electronic communication, take steps to preserve that documentation in the employee’s file. If the resignation was verbal, you may ask the employee to complete a resignation notice to document the conversation.  

You also need to consider what your policy about resignations has been in the past, and if there is anything risky about treating this particular resignation differently. For example, if this employee is in a protected class (pregnancy, disability, etc.) and you’ve never accepted a resignation early in the past, it could look like you’re treating them differently for a discriminatory reason (even if you’re not).

Finally, you need to be sure you’re getting that final paycheck right, and usually if you’re accepting a resignation early, it’s best practice to have final pay ready on their last day.

Know what your state law requires with regard to timing of the final paycheck, and ensure that your final paycheck and your confirmation of resignation letter address things like termination of benefits and payout of any unused time off. Account for all hours worked, overtime, earned bonuses, and any other outstanding issues. Getting final pay right is just as important in a resignation as in a termination, as improper final pay can lead to a wage and hour claim.

Point your sails toward glassy seas.

A resignation, including your decision to let the employee go early, can have a huge impact on the rest of your team. If you can get ahead of potential issues, it can set you and the resigning employee up for a smooth transition out.

How we treat an employee when they give notice is important to think about. Others are watching. Without diving deep into every scenario, it can be a lifesaver to have a decent employee give you enough notice so that you have time to find a “wonderful” replacement, which is what happened with you.

But you want to avoid sending the message that anyone who gives you notice will simply be fired on the spot.

In this scenario, you kept the employee for three weeks and let her go a little early once you found a replacement, and that’s just not a problem.

In fact, handling it this way sends the message that you will do your best to be nice to employees who are on their way out, but your business’ needs come first.

If I were your employee, I would feel good about working for you and giving you notice in the future given the way that this particular scenario played out.

Congrats on your new hire.
Sometimes the right thing to do is say goodbye. Click to download CEDR's free separation guide.

Mar 1, 2019

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance based on applicable local, state and/or federal U.S. employment law that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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