The departure of an employee can be emotional for you and your team. No matter how great your company culture or retention, you will inevitably have employees that choose to leave your organization. When you are faced with an employee’s resignation, it’s important to tie up any loose ends and make sure all the administrative and payroll tasks are completed before the employee’s last day with your company.
Here are eight things you should do when an employee leaves your company, including HR and payroll tasks, and other miscellaneous but important steps to make sure the process goes smoothly.
1. Ask For a Formal Resignation Letter
There are several documents that should be kept in the employee’s personnel file, including a resignation letter, or a notice letter. Although there are no laws that require this, it’s best practice to have documentation regarding when and why your employee left. If you do decide to require this at your company, make sure it’s included in your employee handbook.
The letter should include the intended date of departure, along with the submission date and employee’s signature. The employee can also include in their letter why they’re leaving if they choose to disclose that information.
2. Establish Final Pay
Consideration around your employee’s final paycheck should include wages due, payment for unused paid time off (if offered in your company policy), any reimbursements owed to the employee for travel or other company-covered expenses, whether the check will be mailed or issued via direct deposit (some states require immediate payout), and what your state requires regarding timeline of issuance. For more detailed information on what your state requires in an employee’s final paycheck, check your state laws and guidelines to make sure you’re compliant.
3. Update Employee Information
You’ll need to have updated employee information on file so that you can send the employee’s final check, tax documentation, and COBRA information to them. Have the employee update any information like address, phone number, and their emergency contact information, and request that they contact you after their employment is over if they move so they’ll still receive all critical documentation from your agency.
4. Remove Access to Systems
The departing employee should be removed from all internal systems, especially those that have sensitive company or client information. Make that after their last day of employment, they no longer have access to your customer relationship management system, accounting systems, or any other systems that host confidential information.
You may want to give your former employees access to your HR or payroll systems until they receive their final W-2 so that they can access tax documents when necessary.
5. Request Company Property Return
If your employee has anything that needs to be returned, such as a company computer or keys to the office, retrieve them before their last day. Make a checklist of all items that you should collect from your employees in the case of resignation or termination so that you can easily read down the list and make sure you have everything in your possession before they officially leave.
6. Discuss Benefits
Communicate to your employee what day the employer provided benefits will end (this depends on your plan and provider). Depending on the size of your company, you may be legally required to offer group health insurance coverage under The Consolidated Omnibus Budget Reconciliation Act (COBRA). To learn more about COBRA, visit the Department of Labor’s website or speak to a COBRA representative.
7. Hold an Exit Interview
Your employee’s decision to leave your company is a great opportunity to seek feedback. The process can include a formal or informal conversation, whichever you’re more comfortable with, and can be quite eye opening, as it gives you a better understanding of why your employee is departing, and allows them the opportunity to speak on any issues they experienced at your company. Make sure you answer any last questions they may have to set them up for a smooth transition into their next role.
8. Inform Your Staff
Telling your other staff members about an employee’s exit is important because they will more than likely be affected by it. Your message can be short and to the point, including who is leaving, when they’ll depart, and who they can reach out to with questions. Don’t include anything personal that the employee may not want you to disclose with others, but make sure your team is aware of any shift in responsibilities or titles that may result.
While it’s never easy to say goodbye to valuable employees, ending on a positive note and ensuring that they are set up for success moving forward is important to both you and your former employees. Running through this checklist when an employee submits their resignation can help you stay on track and remain professional throughout the offboarding process.
Hireology and its integrations can help with your payroll processes up until your employee’s last day. If you’d like a demo of what our software can do for you and your organization, you can schedule a consultation here.