Employee Offboarding: How to Manage Voluntary and Involuntary Exits

Employee departures happen in every business. Some people resign for new opportunities. Others retire. Some are terminated for performance or misconduct. Others are laid off due to business conditions.

How you handle exits determines whether you face legal claims, operational disruption, or damage to your employer brand. Poor offboarding creates compliance exposure (missed final pay deadlines, botched benefits continuation, incomplete recordkeeping), security risks (unrevoked system access, unreturned equipment), and knowledge loss that cripples operations after someone leaves.

This guide covers the complete offboarding process for both voluntary and involuntary terminations. It explains compliance requirements, documentation protocols, knowledge transfer procedures, and post-exit administration. The goal is consistent, compliant, and humane offboarding that protects the business and treats departing employees with appropriate professionalism.

This information is provided for educational purposes and does not constitute legal, tax, or professional advice. Requirements vary by state, industry, and company size. Consult qualified professionals for specific legal or regulatory requirements.

Why Offboarding Matters

Offboarding failures create three types of problems:

• Legal and compliance risk. State and federal laws govern final paychecks, benefits continuation, unemployment insurance, and discrimination protections. Violations result in penalties, back pay, and lawsuits that cost far more than proper compliance.
• Security and operational exposure. Employees who retain system access, company devices, or proprietary information after separation create data breach risks, IP theft potential, and regulatory violations (especially in healthcare, finance, or industries with strict data protection requirements).
• Reputational damage. How you treat exiting employees shapes your employer brand. Sloppy or hostile exits generate negative Glassdoor reviews, damage recruiting pipelines, and discourage boomerang hires (experienced former employees who might return).

Proper offboarding reduces all three risks while preserving institutional knowledge and maintaining professional relationships.

Voluntary vs. Involuntary Exits: Key Differences

The offboarding process varies significantly based on exit type:

Voluntary Exits

Voluntary separations include:

• Resignations
• Retirements
• End of fixed-term contracts (if employee doesn’t renew)
• Mutual separations (employee and employer agree to part ways)

Key characteristics:

• Employee typically provides notice (2 weeks standard, though not legally required)
• Exit date is usually negotiable
• Employee relationship is typically cooperative
• Knowledge transfer is more feasible
• Lower legal risk (no wrongful termination claims)
• Unemployment benefits typically not available (employee quit)

Involuntary Exits

Involuntary separations include:

• Terminations for cause (performance, misconduct, policy violations)
• Layoffs (workforce reductions, position eliminations)
• Terminations during probationary periods
• Job abandonment (employee stops showing up)

Key characteristics:

• Employer controls timing
• Exit is often immediate or within days
• Employee relationship may be adversarial
• Knowledge transfer is difficult or impossible
• Higher legal risk (wrongful termination, discrimination claims)
• Unemployment benefits typically available

The distinction matters because compliance requirements, timeline control, and risk management strategies differ substantially between voluntary and involuntary exits.

Universal Offboarding Requirements (All Exit Types)

Certain offboarding steps apply regardless of whether the exit is voluntary or involuntary:

Final Pay Requirements

Every state has laws governing when final paychecks must be paid. Deadlines vary by state and sometimes by whether the exit was voluntary or involuntary.

Examples of state requirements:

State	Voluntary Exit	Involuntary Exit
California	Within 72 hours (or immediately if employee gives 72+ hours notice)	Immediately on termination date
New York	Next regular payday	Next regular payday
Illinois	Next regular payday	Immediately if possible, otherwise next business day
Texas	Next regular payday	Within 6 days
Colorado	Immediately if payroll on-site, otherwise next payday	Immediately

Compliance Note: State final pay laws vary widely. Some require immediate payment for involuntary terminations, while others allow payment on the next regular payday. Violations result in waiting time penalties in states like California (continuation of wages for each day of delay, up to 30 days).

Final pay must include:

• All wages earned through the last day worked
• Accrued but unused vacation or PTO (if state law or company policy requires payout)
• Any earned bonuses or commissions
• Reimbursable expenses

Check your state’s rules on PTO payout. Some states require payout of all accrued vacation. Others allow “use it or lose it” policies. Never assume you can forfeit accrued PTO without checking state law.

COBRA Benefits Continuation

The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers with 20+ employees to offer continued health insurance coverage to employees who lose coverage due to termination (voluntary or involuntary, except for gross misconduct).

COBRA timeline:

• Within 30 days of termination: Employer notifies health plan administrator of qualifying event
• Within 14 days of receiving employer notice: Plan administrator sends COBRA election notice to employee
• 60 days from receipt of election notice: Employee decides whether to elect COBRA
• 45 days from election date: Employee pays first premium

Compliance Note: COBRA violations result in excise taxes of $100 per day per affected individual, plus potential ERISA penalties and employee lawsuits. The Department of Labor provides model COBRA notices that satisfy legal requirements.

Employees pay 102% of the full premium cost (employer + employee share + 2% admin fee). COBRA coverage lasts up to 18 months for termination-related qualifying events.

State continuation laws: Many states have “mini-COBRA” laws that apply to smaller employers (under 20 employees) or extend continuation periods beyond federal requirements. California’s Cal-COBRA extends coverage beyond 18 months. Check your state’s requirements.

Unemployment Insurance

Separating employees may file for unemployment benefits. Your response to unemployment claims affects your unemployment insurance tax rate.

Voluntary separations: Employees who resign voluntarily generally don’t qualify for unemployment unless they quit for “good cause” (unsafe working conditions, constructive discharge, significant pay reduction, following a spouse’s job relocation in some states).

Involuntary separations: Employees terminated through layoffs typically qualify for unemployment. Employees terminated for misconduct may be disqualified depending on the severity and state law.

When you receive an unemployment claim:

• Respond within the deadline (typically 10 days)
• Provide factual information about the separation
• Include documentation (termination letter, performance warnings, policy violations)
• Don’t ignore claims—non-response often results in automatic approval

Contesting frivolous claims protects your unemployment tax rate. However, contesting legitimate layoff claims wastes time and damages goodwill.

Documentation and Recordkeeping

Maintain separation documentation for legal compliance and potential disputes:

Required records:

• Termination date and reason
• Final pay calculation and payment date
• COBRA notice delivery proof
• Signed acknowledgment of company property return
• Exit interview notes (if conducted)
• Unemployment claim responses

Retention periods:

• EEOC recordkeeping: 1 year minimum for all terminations
• FLSA records: 3 years for payroll records
• COBRA records: 6 years
• State requirements: Often longer than federal (California requires 4 years for wage records)

Store termination files separately from active personnel files. Restrict access to HR and legal only.

Voluntary Exit Process

Voluntary separations allow for structured transitions when handled properly.

Step 1: Receive and Document Resignation

When an employee resigns:

Obtain written resignation. Request an email or letter stating:

• Intent to resign
• Last day of work
• Reason for leaving (optional but helpful)

If the employee resigns verbally, send a written confirmation:

“This confirms your resignation effective [date]. Your last day of work will be [date]. Please let me know if you have questions about final pay, benefits, or the transition process.”

Determine notice period. Two weeks is customary but not legally required. You can:

• Accept the proposed notice period
• Negotiate a longer transition (for knowledge transfer)
• Make termination immediate if employee poses risk (and pay through notice period to avoid unemployment claim)

Decide whether to accept the notice period. Sometimes immediate separation is appropriate:

• Employee is going to a direct competitor
• Employee has access to sensitive data or intellectual property
• Employee’s behavior during notice period could harm morale or operations
• Employee violated policy during resignation (e.g., mass resignation email to entire company)

If you make termination immediate, clarify whether the employee is being paid through the originally proposed notice period. Cutting pay creates unemployment eligibility.

Step 2: Conduct Exit Interview (Optional)

Exit interviews gather feedback about why employees leave and what the organization could improve.

Good questions:

• What prompted your decision to leave?
• What did you like most about working here?
• What would you change about your role, manager, or the company?
• Were there opportunities for growth or development you felt were missing?
• Would you recommend this company to others? Why or why not?

Avoid:

• Asking employees to reconsider (desperate, damages credibility)
• Defensive responses to criticism
• Making promises you can’t keep based on feedback

Exit interviews work best when conducted by HR or a neutral party, not the direct manager. Make clear that feedback is confidential and won’t affect references or rehire eligibility.

Document themes from exit interviews to identify retention risks (bad managers, compensation issues, lack of development opportunities). Individual feedback is anecdotal, but patterns across multiple exits reveal systemic problems.

Step 3: Plan Knowledge Transfer

Voluntary separations usually include notice periods that allow knowledge transfer. Use this time strategically:

Identify critical knowledge:

• Active projects and their status
• Client relationships and account history
• Undocumented processes or tribal knowledge
• System access, passwords, or technical configurations
• Upcoming deadlines or deliverables

Assign transfer tasks:

• Documentation of recurring processes
• Training sessions with colleagues who will assume responsibilities
• Introduction of clients to new points of contact
• Handoff meetings for active projects

Set specific deadlines for transfer tasks. Don’t assume the employee will self-organize the transition—provide a structured plan.

Step 4: Manage System Access and Property Return

System access: Disable on the last day of work, not before. Employees working through their notice period need access to perform their jobs. Cutting access early signals distrust and invites retaliation.

Company property checklist:

• Laptop, tablet, phone, or other devices
• Keys, access cards, or badges
• Company credit cards
• Confidential documents or proprietary files
• Uniforms, tools, or specialized equipment

Provide a checklist and require signed acknowledgment that all property has been returned. If the employee fails to return property, state law governs whether you can deduct the value from final pay (most states prohibit this or require written authorization).

Step 5: Process Final Pay and Benefits

Final paycheck calculation:

• Wages through last day worked
• Accrued PTO payout (if required by state law or company policy)
• Outstanding bonuses or commissions earned
• Expense reimbursements

Benefits termination:

• Health insurance ends on last day of the month (typically)
• Send COBRA notice within required timeframe
• Process 401(k) distributions or rollovers per plan terms
• Cancel life insurance, disability, FSA/HSA (provide guidance on FSA grace periods or runout periods)

Equity and stock options: If the employee has stock options or equity grants, provide documentation on:

• Vested vs. unvested shares
• Exercise windows for vested options (typically 90 days post-termination)
• Tax implications of exercise decisions

Issue final pay according to your state’s requirements for voluntary separations.

Step 6: Provide Reference and Rehire Guidance

Clarify your reference policy:

• Will you provide references? If so, who should be contacted?
• What information will you confirm (dates of employment, title, eligibility for rehire)?
• Will managers provide personal references separate from official company policy?

Many companies limit references to dates of employment and title to reduce legal risk. Some allow managers to provide personal references in their individual capacity with appropriate disclaimers.

Rehire eligibility: Document whether the employee is eligible for rehire. “Not eligible for rehire” should be reserved for serious policy violations, performance failures, or unprofessional resignations (job abandonment, no notice, hostile behavior).

Most voluntary separations should be marked “eligible for rehire.” This preserves the relationship and allows boomerang hiring if circumstances change.

Involuntary Exit Process: Terminations for Cause

Terminations for performance or misconduct require careful documentation and risk management.

Step 1: Confirm Termination is Justified and Documented

Before terminating for cause, verify:

Documentation exists. Performance issues should include:

• Written performance reviews documenting deficiencies
• Performance improvement plans (PIPs) with specific expectations
• Warnings or corrective action notices
• Evidence that employee was given opportunity to improve

Misconduct terminations should include:

• Incident reports or investigation findings
• Policy violations cited
• Witness statements if applicable
• Prior warnings for similar conduct (if progressive discipline applies)

Compliance Note: At-will employment allows termination without cause in most states, but documenting legitimate business reasons defends against wrongful termination claims. Poor documentation makes even justified terminations look pretextual.

Termination is consistent with past practice. Have you terminated others for similar conduct? If not, why is this case different? Inconsistent enforcement creates discrimination claims.

No protected activity is involved. Recent protected activity creates retaliation risk:

• FMLA leave or requests
• Workers’ compensation claims
• Discrimination or harassment complaints
• Wage and hour complaints
• Union organizing activity
• Whistleblowing

If the employee engaged in protected activity within the past 6–12 months, consult legal counsel before proceeding. The termination may be justified, but timing creates inference of retaliation.

No protected class concerns. Analyze whether similarly situated employees outside the employee’s protected class (age, race, gender, disability, etc.) have been treated differently. If yes, termination may appear discriminatory.

Step 2: Plan the Termination Meeting

Termination meetings should be:

• Private: Never terminate in front of coworkers
• Brief: 10–15 minutes maximum
• Factual: State the decision clearly without over-explaining
• Respectful: Acknowledge the difficulty without apologizing for a justified decision

Who should attend:

• Employee’s direct manager or decision-maker
• HR representative (as witness and to handle logistics)
• Never the employee’s peers or subordinates

What to prepare:

• Termination letter stating reason and effective date
• Final paycheck (if state law requires immediate payment)
• COBRA notice or benefits summary
• Company property return checklist
• Severance agreement (if offering severance)
• Logistics plan (email access, building access, personal item retrieval)

Sample termination script:

“We’ve decided to end your employment effective today. This decision is based on [specific reason: performance issues we’ve discussed, violation of company policy, etc.]. Your last day is today. Here’s information about your final paycheck, benefits continuation, and return of company property. [HR rep name] will walk you through the details. Do you have questions?”

What not to say:

• “This is really hard for me” (centers your feelings)
• Lengthy justifications or debate about the decision
• “We might reconsider if…” (decision should be final)
• Personal criticisms or emotional statements

Keep the meeting short. Longer meetings invite argument and increase legal risk.

Step 3: Execute Immediate Separation

Most terminations for cause should be effective immediately, and these immediate steps should be taken.

System access: Disable email, software, network access, and building access during or immediately after the termination meeting. This prevents:

• Data theft or destruction
• Hostile emails to coworkers or clients
• Sabotage of systems or files

Personal belongings: Allow the employee to collect personal items under supervision, or offer to pack and ship items if the situation is hostile. Don’t hold personal property hostage, but don’t allow unsupervised access to files or systems.

Company property return: Use the checklist to ensure all items are returned before the employee leaves. If property isn’t returned immediately, follow up in writing with a deadline and consequences for non-return.

Step 4: Communicate Internally

After the termination, take these steps to wrap up logistics.

Direct team notification: The employee’s manager should inform the immediate team:

• “[Name] is no longer with the company effective [date].”
• “[Name/role] will handle [critical responsibilities] going forward.”
• “Please direct questions about [projects/clients] to [person].”

Here’s what you should avoid:

• Detailed explanations of why the employee was terminated
• Negative comments about the employee’s performance or conduct
• Inviting speculation or gossip

Client communication (if applicable): If the employee had client-facing responsibilities, notify clients promptly:

• “[Name] is no longer with [Company]. [New contact] will be your point of contact going forward.”
• Provide reassurance about continuity of service
• Offer an introduction call if appropriate

Don’t volunteer that the employee was terminated. If asked, provide a neutral response: “They’re no longer with the company. We’re here to ensure you continue receiving excellent service.”

Step 5: Process Final Pay and Unemployment

Final pay: Include all wages earned through the termination date, plus any required PTO payout. Pay according to your state’s involuntary termination deadline (often immediate or next business day).

Unemployment claim: Expect the employee to file for unemployment. When you receive the claim:

• Respond with factual information about the termination reason
• Include documentation (performance warnings, policy violations, termination letter)
• Cite specific policy or performance deficiencies

Employees terminated for “misconduct” may be disqualified from unemployment, but the standard is high. Poor performance usually doesn’t disqualify. Willful misconduct, policy violations, or insubordination may disqualify depending on state law.

Involuntary Exit Process: Layoffs and Position Eliminations

Layoffs involve different considerations than terminations for cause.

Step 1: Confirm Business Justification

Layoffs should result from legitimate business needs:

• Revenue decline or financial losses
• Restructuring or strategic pivot
• Position redundancy after merger or acquisition
• Technology changes that eliminate roles

Document the business justification. This record defends against claims that layoffs were pretextual (covering for discrimination or retaliation).

Step 2: Select Affected Employees Using Objective Criteria

Selection criteria must be job-related, consistently applied, and neutral. See [LINK TBD: How to Plan for Layoffs] for detailed guidance on selection criteria and legal compliance.

Check for disparate impact: Analyze whether the layoff disproportionately affects protected groups (age, race, gender, disability). If yes, adjust criteria or be prepared to justify business necessity.

Check for WARN Act applicability: If laying off 50+ employees, WARN Act may require 60 days’ notice. See WARN Acts Requirements Guide for threshold analysis.

Step 3: Determine Severance

Severance is not legally required for layoffs (except in specific states or if promised in contracts), but most employers offer severance in exchange for a release of claims.

Typical severance formulas:

• One week of pay per year of service
• Two weeks of pay per year of service
• Flat amount for all affected employees

In exchange for severance, ask employees to sign a release waiving claims against the company. Releases must meet legal requirements, especially for employees age 40+ (Older Workers Benefit Protection Act requires 21 days to consider, 45 days for group layoffs, and 7 days to revoke).

Step 4: Conduct Layoff Meetings

Layoff meetings should be empathetic but clear:

Sample script:

“I need to let you know that your position is being eliminated due to [business reason]. Your last day will be [date]. This is not a reflection of your performance—it’s a business decision based on [financial conditions, restructuring, etc.]. You’ll receive [severance details] and information about benefits continuation. [HR rep] will go over the details with you.”

What to provide:

• Termination letter explaining position elimination
• Severance agreement and release
• COBRA notice
• Final pay information (often paid through a transition period if severance is offered)
• Outplacement services information (if provided)

Be prepared for emotional reactions. Layoffs are traumatic. Allow space for the employee to process, but keep the meeting focused on logistics.

Step 5: Manage Post-Layoff Operations

After layoffs, exercise care to tend to the remaining employees.

• Communicate with remaining employees: Explain what happened, why, and what’s stable going forward. Ambiguity increases anxiety and turnover.
• Redistribute work: Don’t assume remaining employees can absorb 150% workload indefinitely. Reprioritize, eliminate non-essential tasks, or adjust timelines.
• Monitor for retaliation: Remaining employees may face increased workload, cancelled projects, or hostile treatment. Monitor for retaliation claims from both laid-off and retained employees.

Special Situations: Job Abandonment and Mutual Separations

Job Abandonment

Job abandonment occurs when an employee stops showing up without notice or communication.

Process:

1. Attempt contact via phone, email, and emergency contact
2. Document all contact attempts
3. Send written notice to last known address: “You have been absent without communication since [date]. If we don’t hear from you by [date], we will assume you have voluntarily resigned.”
4. If no response, process as voluntary resignation

Job abandonment is treated as voluntary resignation, making the employee ineligible for unemployment in most states (though they may still file and claim they were terminated).

Mutual Separation Agreements

Sometimes employers and employees agree to part ways:

• Performance issues exist but don’t warrant termination
• Employee is unhappy but hasn’t resigned
• Employer wants to avoid wrongful termination risk

Mutual separations typically involve:

• Negotiated end date
• Severance in exchange for release of claims
• Agreed-upon reason for separation (for reference purposes)
• Neutral reference language

Treat mutual separations as voluntary for final pay timing, but provide severance and releases as you would for involuntary separations.

Common Offboarding Mistakes

Mistake 1: Missing Final Pay Deadlines

State laws impose strict deadlines for final paychecks. Missing them results in waiting time penalties that can exceed the final paycheck amount.

Red flag: Assuming you can pay final wages on the next regular payday regardless of state law.

Mistake 2: Forgetting COBRA Notices

COBRA notices must go out within strict timeframes. Missed deadlines create excise tax exposure and employee lawsuits.

Red flag: Assuming health insurance just “ends” without formal notice requirements.

Mistake 3: Failing to Disable System Access

Terminated employees with continued system access can delete files, steal data, or send hostile communications.

Red flag: Disabling email but forgetting cloud apps, VPN access, or physical building access.

Mistake 4: Inconsistent Exit Processes

Treating some exits formally (documentation, exit interviews, structured transitions) and others informally creates legal risk and operational gaps.

Red flag: High performers get structured offboarding while low performers just disappear.

Mistake 5: Emotional Termination Meetings

Managers who get defensive, angry, or emotional during termination meetings increase legal risk and damage the company’s reputation.

Red flag: Termination meetings that turn into debates or arguments.

Mistake 6: Retaliating Against Exiting Employees

Withholding final pay, refusing references, or making negative statements about employees who resign creates legal exposure.

Red flag: “You’re quitting? Fine, you’re done today and you’re not getting paid for your notice period.”

Scaling Considerations: How Offboarding Changes as You Grow

5–25 employees: Offboarding is typically informal. Focus on state final pay compliance, COBRA (if you have 20+ employees), and property return. Exits are visible to everyone—manage communication carefully.

25–50 employees: Formalize the offboarding process with checklists and documentation. Exit interviews become valuable as you have enough data to identify patterns. COBRA compliance becomes mandatory at 20 employees.

50–100 employees: Implement structured offboarding workflows in your HRIS. Track exit reasons and trends. Ensure managers are trained on termination procedures. Compliance risk increases—document everything.

100+ employees: Centralize offboarding through HR. Use technology to automate workflows (system access revocation, benefits termination, exit interview scheduling). Analyze exit data for retention insights. Legal review becomes essential for involuntary terminations, especially layoffs.

Offboarding Checklist

All Separations

• Document separation reason and effective date
• Calculate final pay including wages, PTO payout, bonuses, expenses
• Process final paycheck per state deadline
• Send COBRA notice within 30 days (if 20+ employees)
• Terminate benefits (health, life, disability, 401k contributions)
• Disable system access (email, software, network, building)
• Collect company property (devices, keys, cards, documents)
• Update payroll and benefits systems
• Respond to unemployment claims (if filed)
• Update organizational charts and contact lists
• Retain separation documentation per legal requirements

Voluntary Separations Only

• Obtain written resignation or send written confirmation
• Determine last day and notice period
• Schedule exit interview (optional)
• Plan knowledge transfer and documentation
• Coordinate client transitions (if applicable)
• Document rehire eligibility
• Clarify reference policy

Involuntary Separations Only

• Review documentation supporting termination decision
• Check for protected activity or disparate impact concerns
• Prepare termination letter and script
• Schedule termination meeting with HR witness
• Prepare severance agreement (if offering severance)
• Plan immediate system access termination
• Coordinate personal property collection
• Draft internal communication for team/clients
• Prepare unemployment claim response documentation

When to Get Expert Help with Offboarding

Most small and midsize businesses handle offboarding inconsistently—some exits get proper documentation and process, others are handled ad hoc based on who’s leaving and how busy HR is that week. This inconsistency creates compliance gaps, operational disruption, and unnecessary legal exposure.

Signs you need structured offboarding processes:

• Different managers handle exits differently (some formal, some casual)
• You’ve missed final pay deadlines or COBRA notice requirements
• Former employees retain system access or company property after separation
• No standard documentation for why people leave or whether they’re rehire-eligible
• Knowledge transfer happens only when someone remembers to ask for it
• Exit interviews are sporadic or nonexistent
• You’re unsure what compliance requirements apply to different exit types

What structured offboarding solves:

Building a proper offboarding system means creating documented workflows, checklists, and accountability for every separation—voluntary or involuntary. It ensures compliance requirements get handled consistently, company property gets returned, system access gets revoked, and you capture exit data that helps you understand turnover patterns.

HR Launcher Lab offers employee offboarding system design services that create customized offboarding workflows, documentation templates, and manager training materials for your business. We help you build the structure to handle exits consistently—from resignation through final pay, benefits termination, and documentation—without requiring you to figure out compliance requirements or process design from scratch.

For companies tired of scrambling through each exit or dealing with compliance failures after someone leaves, a designed offboarding system creates predictability and reduces risk at a fraction of what compliance violations cost.

Note: This service handles process design and operational workflows but does not include legal advice. Consult employment counsel for specific compliance questions or termination decisions involving legal risk.

Conclusion

Employee offboarding is not an administrative formality—it’s a compliance-critical process that determines whether departures create legal exposure, operational disruption, or reputational damage.

The difference between good and bad offboarding is preparation. Companies with documented processes, clear checklists, and trained managers execute exits consistently and legally. Companies that treat each exit as a one-off crisis make mistakes that show up as lawsuits, penalties, or security breaches months later.

Whether the exit is voluntary or involuntary, the core requirements are the same: comply with final pay laws, provide required benefits notices, secure company assets, and document the separation properly. The execution details change based on circumstances, but the framework remains consistent.

If you’re building offboarding processes for the first time or improving inconsistent practices, start with compliance basics (final pay, COBRA, property return), then add structure for knowledge transfer, exit interviews, and internal communications. For guidance on managing involuntary separations specifically, see How to Plan for Layoffs.

Frequently Asked Questions

Do I have to pay out accrued vacation time when an employee leaves?

It depends on your state. Some states (California, Massachusetts, Montana, Nebraska, North Dakota) require payout of all accrued vacation at termination. Other states enforce your written policy—if your policy says unused vacation is forfeited, that’s generally enforceable (though some states prohibit “use it or lose it” for accrued vacation). Check your state’s law and review your employee handbook policy. Never assume you can forfeit accrued vacation without state law research.

How long do I have to provide COBRA notices after someone leaves?

Employers must notify the health plan administrator within 30 days of the qualifying event (termination). The plan administrator must then send the COBRA election notice to the employee within 14 days. Missing these deadlines creates excise tax exposure ($100+ per day per affected individual) and potential ERISA violations. Most employers send COBRA notices immediately upon separation to avoid timing issues.

Can I make an employee’s last day effective immediately when they resign?

Yes, but if you terminate them before their proposed end date without paying through their notice period, you may make them eligible for unemployment benefits. If an employee resigns effective two weeks from today and you say “today is your last day,” you’ve converted a voluntary resignation into an involuntary termination unless you pay them for the two-week notice period. If you accept their resignation and pay through the notice period, unemployment eligibility is less clear and varies by state.

What should I say in a reference for a terminated employee?

Many companies limit references to confirming dates of employment, job title, and rehire eligibility to minimize legal risk. Providing detailed performance information—especially negative information—creates defamation exposure if the information is inaccurate or misleading. If you do provide substantive references, stick to documented facts and avoid subjective opinions. Some states prohibit blacklisting (providing negative references intended to prevent someone from getting hired).

Do I need to conduct exit interviews?

Exit interviews are not legally required, but they’re valuable for identifying retention issues, management problems, or workplace concerns you wouldn’t otherwise discover. Make them optional—mandatory exit interviews feel punitive and don’t yield honest feedback. Conduct them with HR or a neutral party rather than the direct manager for better candor. Document themes across multiple exits rather than fixating on individual complaints.

Can I deduct the cost of unreturned company property from an employee’s final paycheck?

Most states prohibit deductions from final pay without written authorization or court order, even for unreturned property. Some states (like California) never allow deductions for unreturned property regardless of authorization. Your options are typically limited to: (1) requesting return, (2) billing the employee separately, or (3) pursuing small claims court for significant items. Check your state’s wage deduction laws before withholding final pay for any reason.

How do I handle someone who just stops showing up to work?

Document all attempts to contact the employee (phone, email, emergency contact). Send written notice to their last known address stating that continued absence without communication will be treated as voluntary resignation. Set a deadline (typically 3–5 business days). If they don’t respond, process as voluntary resignation. Some states require specific job abandonment notice procedures—check your state’s requirements. Job abandonment is generally treated as voluntary resignation, making the employee ineligible for unemployment benefits.