2 Weeks Notice – Handling the Final Paycheck

Picture the scene – your employee surprises you one day and notifies you that they are resigning and giving you 2 weeks notice. What are your options and what is the “best practice” to handle the employee’s departure in a way that protects your business and meets compliance so you don’t end up in front of the Labor Board. Let’s cut through the complexity of this common situation and lay out some plans for different scenarios.

When employees give notice, it might be a good thing or a bad thing, depending on their performance status. One think for sure, making the transition a smooth one in either case is in your best interests.

What Does Your Handbook Say?

Do your handbook require that employees provide a two-week notice? If so, this could be construed as an employment contract, so be sure to know what your policy says. Its wise not to create limitations in your handbook for a two week notice unless the position is so critical that you need time to replace the employee leaving. If it is a specific position requirement, you can make that part of the Job Offer, just know it works both ways.

Commissions?

What about commissions for salespeople? If your compensation policy requires payment from the client before commissions are paid or other conditions are met, you can continue this same process and postpone paying out commissions until the conditions are met. However, make sure your compensation policy details this clearly and that the employee has signed the compensation agreement.

Final Paycheck

As for their final paycheck, you must pay an employee within 72 hours of a voluntary resignation (quit), and at the time of termination for an involuntary termination (fired). In the case when an employee gives notice that is more than 72 hours, you must pay them all wages due by their final day of work. This includes wages, earned vacation, and any other types of pay you have previously committed to.

Exempt Salary Employees

There is a caveat in the wage and hour law that makes it difficult to make any deductions from a salary-exempt employee’s full weekly pay, if they work at any time during that week. However, one of the few ways you can pay for partial weeks is when a salary-exempt employee starts or ends their employment mid-week. You can pay for actual days worked, for incomplete weeks worked.

Terminating Before Two Weeks Period Ends

What happens if they give two weeks notice and you would like them to leave before that period is over? (Sometimes this is a good idea if the position is sensitive, or if the employee is not performing well). As long as your policy does not limit you, you may terminate the employee at any time before the notice period is over, you would just need to pay the employee through their last day worked and have their final check ready. You are not required to pay the full notice period, but you may be subject to unemployment charges for the gap period between their notice date the date you terminate them.

No matter what you do, terminating an employee is never easy and carries a minefield of liability for you as employer. Be sure to contact Infinium HR BEFORE you make the decision to terminate an employee so we can help you develop a bulletproof strategy.