When one of your employees puts in their two weeks notice, they may think that the heads-up time they’re giving you is doing you a favor. While the extra time to prepare for their departure can certainly help, you can run into some big time HR and Payroll headaches – especially if you aren’t aware of some of the rules/regulations regarding resignations and two week notices. We’ll tackle some of the most common rumors and misconceptions on this week’s blog!
Common Two Weeks Notice Misconceptions
There are tons of misconceptions, rumors, and just generally bad advice out there regarding two weeks notice. First and foremost the – it is NOT required. Your employee can leave with no notice if they wish. However, generally employees will avoid doing that in order to make sure they leave on good terms and have a future reference. How about some of the other misconceptions?
Do You Have to Pay Them After Their Two Weeks Notice?
Yes, of course you do! As an employer, you must pay employees each hour they work – and it doesn’t matter if they’re resigning at the end of their shift or retiring in 30 years. When an employee resigns with two weeks notice, that means they are planning on working for that entire time period – and you must absolutely still pay them for their time.
Can You Let Them Go Early?
In most states, employment is “at will”. That means employers can terminate employees at any time (with good, and professional cause.) Unless the employee’s contract says otherwise, you can terminate them on the spot if you wish. However – no matter the timing, you will still be required to pay them for of the work they performed. Here are few additional caveats:
- If you fire an employee, their termination will become involuntary. They will then qualify for unemployment insurance benefits that they would not have received otherwise.
- If your company policy is to allow two weeks notices and you still terminate them early, the former employee may litigate for the extra two weeks of pay.
- Your current staff will likely not appreciate that you rushed to terminate a resigning co-worker that had already given their two-weeks notice. Additionally, they probably won’t see much point in giving you their notice if/when that time comes.
Should You Pay Out PTO to the Resigning Employee?
If a legal statute, company policy or the employee’s contract (or really any agreement between you and the employee) says that you should pay out PTO, you must do so. However – be sure to analyze your state’s rules and regulations. In Virginia, there is no law requiring companies pay out unused vacation time.
In some states, employers are required to pay out unused vacation to departing employees, regardless of the type of departure it was. Other states ask only that companies adhere to their company policy. In these states, it’s common practice to require that departing employees give their two weeks notice as a requirement to receive their unused vacation pay. If said employee does not provide their two weeks notice, they are not entitled to receive a PTO payout. Please note that PTO and sick leave can be different – but most state’s employment laws do not require employers to pay out unused sick days. However – if you provide one, uniform allotment of PTO time (i.e., a day off counts all the same regardless of the reason) you’ll likely be required to pay out for those days.
When Are the Resigning Employee’s Final Wages Due?
Final wages for a resigning employee must be paid by whenever your state-mandated deadline is. When an employee puts in their two weeks, their final wages are usually due by their next normally scheduled payday. As always, employment and payroll laws vary from state to state – so always check in on your specific state’s regulations. If your state has no information on the matter, you’re not off the hook. You must still pay the employee their wages within a reasonable time frame — usually defined as by the next scheduled payday.
What are the Two Weeks Notice Rules for Exempt Employees?
Employees that are, through their job designation or employment contract, exempt from overtime under the FLSA must still receive their full pay for any week in which they do any work. The only exception is when there is a legally permissible deduction. For example, if an employee did not work the entire week in their first or last week of employment, their pay can be docked accordingly.
Here’s the bottom line – handle employee resignations fairly and professionally, and pay the employees their wages in full regardless of the manner of their exit.
Be sure that you get up to speed on all the laws and regulations before the first 2 weeks notice comes across your desk and you’ll be sure to have a smooth transition.
We Are Here to Help!
Whether you need advice on how to handle an employee’s two weeks notice, help processing their final paycheck, or assistance with hiring or onboarding their replacement… Capital Payroll Partners can help. We’re local to the state of Virginia, but we serve clients throughout the United States. If you’re ready to get HR and Payroll headaches off of your plate, get in touch by filling out the form below, requesting a free price quote online, or giving us a ring.
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