Paying when someone quits, lying on timecards, and having a “use it or lose it” vacation policy

It’s that time again! Every other week, we take the most popular submitted questions from our HR BaseCamp Facebook group and go more in-depth on the answer. Join the over 10,000 other office managers and business owners in the group hereto submit your questions and participate in the discussion!

One of my employees just put in their notice. They’re not leaving on bad terms, but I don’t need them to stay for the full two weeks and would rather accept their resignation early. Can I do this? And if I do, am I required to pay them the two weeks anyway?

The legal side of things: Unless this employee has a contract that says otherwise, you can go ahead and accept their resignation early. You’re not legally required to pay out the remainder of the two-week notice. Not paying can sometimes result in the employee being eligible for unemployment benefits, but there’s no way to know for sure. If the employee were to apply for benefits, it would be entirely up to the unemployment board (which can be unpredictable).

If you accept their resignation early, you still need to make sure you comply with your state’s rules regarding last paychecks. You should also pay out any unused time benefits if your time off policy states that time is paid out at separation (this is required in some states).

Now for the human approach: Paying out the two weeks may not be required, but it can make things easier. If the employee is leaving on good terms, most employers choose to payout that time as a courtesy. Again, not required, but it’s a good way to end a professional relationship.

If you decide to accept their resignation early and not payout the time, it can make an amicable departure turn sour. We’ve seen employees fight to stay after they find out they won’t be paid because they don’t want to lose out on the money. Some go as far as trying to make the business look bad online.

It can also cause a ripple effect of the rest of your team choosing to resign without notice, as they suspect they will otherwise lose their jobs as soon as they give notice.

Check out this blog for more guidance on how to accept a resignation early.

I have a “use it or lose it “ vacation policy. I grant my employees vacation benefits up front and they forfeit any unused hours at the end of the year. I got a lot of complaints at the end of last year from employees who didn’t use up all their time and think it’s unfair they lose it. One of them even said I’m legally required to pay them out unused time at the end of the year. Is this true?

The legal side of things: Your employee might be right. Some states prohibit employers from forfeiting vacation time at the end of the year or at separation, and require that you either pay the time out or allow it to rollover. This is one of the (many) reasons why you should have an HR professional create your time off policies. DIY policies, or duplicating a policy someone shared with you, can easily run afoul of local laws.

If there are no forfeit restrictions in your state, you can set the terms.

Now for the human approach: Outside of legal considerations, it might be worth taking a look at why this system isn’t working for your employees. Did they just happen to not take a lot of time off last year so this is the first time they’re complaining about losing it? Or is this a recurring complaint? Ideally, employees should be able to use the benefits they are given. If they’re finding themselves with unused time year after year, it might be a management issue.

It’s up to management’s discretion to approve or deny vacation requests, but there should be valid reasons for it. If employees’ requests are being continuously denied and that is what’s leading to so many hours left at the end of the year, you should examine why it’s not possible for them to take time off.

Finally, making sure your employees know it's OKAY to use their benefits and enjoy time off is not only beneficial for the employee, but also helps prevent the end-of-year dilemma of everyone having a full bank of unused hours.
I recently caught an employee lying on their time card. They adjusted their time card to say they got to the office earlier than they actually did. How do I approach them about this? Should I let them go right away?

The legal side of things: Yikes! Falsifying time cards is considered wage theft, and it absolutely grounds for termination. If the employee is stealing time on purpose, you need to address it right away and get ahead of things before it gets worse. However, terminations always carry some risk, so you don’t want to jump the gun and let them go right away.

Now for the human approach: The best way to approach this is to ask the employee about it directly.

The conversation should be in private, and we recommend approaching it lightly. Something as simple as “Hey, I noticed that the adjusted time on your time card doesn’t match the time that you were actually in office. Can you explain this?”

The employee’s reaction and response to this conversation will be telling. It’s possible they will get defensive, so it’s important that you come with the timecards and your reasoning for believing their time card is incorrect. The fact is, it’s entirely possible it was a mistake. Maybe it looks like they’re trying to claim they were there an hour when really they just pressed the wrong number. Maybe they adjusted their time for the wrong day. If that’s the case, a stern reminder about the importance of accuracy should do the trick.

However, if you feel like you have conclusive proof that the employee purposefully adjusted the time, then that is technically stealing from the company and is grounds for corrective action up to dismissal.

To avoid this issue, you may want to restrict employees from adjusting their own time cards. CEDR's timekeeping system allows the account owner to restrict users from making edits to their own timecards while still giving you the option to allow managers to edit employee timecards. You can learn more about our system here.

Feb 6, 2024

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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