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Key Considerations When Employees Resign

    Client Alerts
  • June 14, 2021

On June 8, 2021, the U.S. Bureau of Labor Statistics released data showing a record 9.3 million current job openings, and that a record number of employees are voluntarily resigning from their jobs. In the face of this historically liquid labor market, many employers are currently facing the implications of employee resignations. The following is a list of the key issues that prudent employers should consider whenever an employee resigns:

  • Two-week notice – Many employers request that their employees provide at least two weeks’ notice of their resignation in order to aid in transition of their responsibilities. However, in cases where an employee may have access to sensitive information or customer relationships, employers might consider immediately accepting an employee’s resignation and paying them in lieu of a two week notice.
  • Remove access to company files and property
  • Request return of company property, documents, and information – Tell employees to not delete information or factory reset their company electronic devices to preserve evidence of misuse of confidential information or trade secrets.
  • Remind employees of restrictive covenants – If the employee signed a non-disclosure, non-competition, or non-solicitation agreement, it is good practice to remind the employee of the obligations of such agreements and to provide a copy thereof.
  • Final paycheck – Ensure that the employee is paid all amounts earned through their last day on the next regular pay date, unless state law (such as California) requires quicker payment. In most states, employers must also pay accrued vacation, sick leave, or other paid time off unless they have adopted a policy which expressly states that such amounts are forfeited upon separation from employment. Also, consider whether bonuses or commissions have been “earned” under applicable law and company policy.
  • Benefits – Inform provider and employee of end date of group benefit plans such as health, dental, and/or vision benefits.
  • COBRA election notices – Provide notice of qualifying event within 30 days and election notice 14 days later.
  • Unemployment benefits – Generally, employees are ineligible for unemployment benefits if they voluntarily resign.

Severance – Consider whether to offer the employee a severance payment in exchange for signing a release of claims. If the employee is over 40 years of age, the release must comply with age discrimination laws in order to be enforceable.