When an employee begins a new job, both employer and new worker look forward to a successful business relationship, but sometimes things don’t work out. The reasons are endless: sometimes employees overstate their qualifications, behave inappropriately or simply cannot or will not do the job. Other times, your employee is excellent, but business conditions necessitate a layoff. Either way, at some point you will need to terminate an employee and having a checklist of issues to resolve can help simplify the difficult task of letting someone go. Be sure to take care of all the following matters that apply:
- Collect all company property: cell phone, keys, parking pass, company car, credit cards, home computer, telephone calling cards, laptops and any other company-owned items
- Address all computer network and voice mail issues
- Retrieve or delete any company information located on employee’s home computer
- Terminate employee's access to the company computer network and voice mail from any location
- Change all passwords prior to the notification meeting
- Set up an automatic email alert on the terminated employee’s email and change the former employee’s voice mail greeting
- Cover compensation issues
- Determine what wages are owed and when, keeping in mind that laws vary by state
- Ascertain what deductions are necessary for unpaid loans, wage over-payments, lost or stolen company property and whether these deductions are allowed by law
- Determine the status of vacation time
- Review the company policy for unused time
- Ascertain how much vacation has been earned and how much has been taken
- Address the requirements of the state in which the employee resides and the state in which the company is located, if different
- Verify policies on continued health insurance coverage and other extended benefits
- Determine last date of coverage for health, life and disability insurance
- Contact insurance carriers to notify of termination and discontinue any premium payments
- Offer the employee continued health care coverage at their expense through COBRA, and make sure the necessary paperwork has been completed
- Provide information in regards to retirement plan rollover
- Verify any flex or dependent care reimbursement funds and distribution of funds
- Address whether any money is owed to the employee or if the employee owes the company money
- Determine if the employee had any loans with the company, and if so, how will it be repaid
- Verify all outstanding expenses and determine if the employee needs to be reimbursed, and if so, determine when the funds will be reimbursed and how the employee will be notified of the reimbursement
- Cover these additional matters to ensure a smooth transition
- Remove the employee biography information from the company website
- Notify the former employee’s contacts of the name of someone who will assist them
- Discontinue the former worker’s authorization for credit cards or bank accounts
- Determine if company locks and key codes need to be changed
Terminating an employee is never an easy process for the employer or the employee. The above checklist can be used as a guideline when the business relationship ends. If you have any questions about terminating an employee, please contact your payroll professional or Jenny Roszak at 920-803-3160 or 800-236-2248.
Jenny Roszak, CPP, is an Associate Accountant and the payroll services coordinator for our Sheboygan office, where she specializes in providing accounting and payroll services to our small business clients. She has more than 10 years of experience working with a variety of clients and software applications.