on January
29, 2016
This is Five focuses on the termination
process. Employers should develop a termination checklist to ensure all
documents and contingencies are consistently covered during the process.
Here are five pointers employers can use to start in developing their own
checklist:
1. Final wages must be timely paid.
The employee’s wages must be paid at the time of termination. In
addition, employers are required to pay the employee all accrued but unused
vacation in this final paycheck. In addition, other items employers
should review to ensure they are timely paid:
·
Expense
reimbursement for business expenses
·
Commissions
·
Non-discretionary bonuses or
profit sharing agreements
2. Provide all required forms to employee at
separation.
To the surprise of many employers, there are many forms that employers are
required to provide to employees at the time of termination. Here is a
non-exclusive list of some of the routine forms required:
·
Notice to Employee as to Change in Relationship (required under California Unemployment Insurance Code 1089)
·
COBRA and Cal-COBRA notices
(can be obtained from health insurance provider)
·
Health Insurance Premium (HIPP) Notice (for employers with 20 or more employees, the Department of Health
Care Services requires this form)
Employers should take time to review their obligations and forms that are
required for their particular industry or situation.
3. Communications about the terminated
employee with others in the company and outside of the company.
In order to prove a libel or slander claim, the employee must prove: (1)
false communication; (2) unprivileged statement of fact (not opinion); (3) it
was made about the plaintiff; (4) published to a third party; and (5) caused
damage to the plaintiff. More information about liable for slander claims can be read here.
Employers should take appropriate measures not to discuss the circumstances
surrounding why an employee left the company with people within the company
that do not have a need to know. In addition, employers need to be very
careful in how they communicate with anyone outside of the company about the
employee’s work at the company. To avoid any potential claims, many
employers restrict what information they will provide for reference checks
(even for employees who were good and left on good terms) to the employee’s
dates of employment, and if authorized by the employee, the employee’s last
rate of pay.
4. Consider if a severance agreement would be
appropriate.
Offering an employee some severance pay may cost the company money in the
short-term, but could save a lot of time and money in the long run. If the
employer believes that there is a potential dispute with the employee, the
employer may choose to pay some severance in exchange of a release of claims by
the employee in order to avoid any potential litigation. If done
properly, an employee’s acceptance of a severance agreement would effectively
waive any and all claims against the company. If there is any potential
for a dispute about any issues that arose during employment, entering into a
severance agreement could be an effective way to avoid costly and time
consuming litigation. I’ve previously written about five common questions about
severance agreements here.
5. Have an attorney review the process.
If the termination has any type of complicated issue, of if the company is
going to over a severance agreement, an employment lawyer familiar with the law
should be consulted. It is also helpful to discuss a termination with an
employment lawyer to see if there are any other potential issues that the
employer may not have considered, and develop a strategy to deal with the
issues at the time of termination, and not during litigation.
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