The end of employment isn’t always the end of your involvement with an employee. If you make any of a number of common mistakes when an employee leaves, or is asked to leave, it could result in liability for your company and, in some instances, liability for you. Final pay, or paying out whatever the now-former employee is owed (while not paying more than is due) can be a minefield.
Below are some of the most common questions about ending employment and answers that will help you protect yourself and your business. Bear in mind that employment law exists at both state and federal levels. Each state has its own statutes and regulations governing at least some, if not all, of the issues in the questions below. It is critical that you understand your state’s requirements. Also note that while employment law is not contract law — not unless there’s an employment agreement — there is this similarity: you can’t arbitrarily change the rules on an employee.
For final pay purposes, does it matter if employment ended voluntarily or involuntarily?
Maybe. In some states, a company’s final pay obligations might differ depending on whether you are reluctantly bidding adieu to a good employee, or gleefully showing a bad one the door. For example, in Connecticut an employer is required to pay a fired employee his or her final paycheck no later than the next business day. (more…)