Employee Termination Checklist | 4 mins read

Your Complete Guide For Employee Termination Checklists

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Hanh Truong

By Hanh Truong

Introduction to Employee Termination Checklist

An employee termination checklist is a compilation of activities the business needs to do when one of its employees is leaving the organization. It is critical that owners layout processes and tasks so that the former staff member and the company can have a smooth transition. The checklist will vary depending on state laws, industry, and employee position. Generally, it will include retrieving company materials from employees, conducting an exit interview, and notifying the human resources department. Management should assess their legal and business needs to safeguard against any future conflicts and lawsuits.

Your Checklist for Employee Termination

Employees leaving a company can be hard for both the staff member and the business. Establishing a comprehensive to-do list will make the goodbye process easier. The most common tasks in an employee termination checklist include the following.

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1. Document the Termination

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Documents pertaining to an employees' termination should include their name, position title, and date of their last day of work. Further details may entail the department they are from, why they are leaving, and the final date when the termination process is complete. Throughout the process, managers should collect necessary documents and file them to record the termination process or to show why the employee was let go. For example, they should compile any paperwork regarding performance reviews and warnings.

2. Notify Human Resources

As soon as a team member submits a letter of resignation, managers need to notify HR. The employee must write an official letter of their leaving so that HR can keep it for records.

3. Notify Staff and People Outside of the Company

The business will also need to inform payroll, security personnel, and receptionists that the employee is no longer with the company. Depending on the organization, managers may have to inform people outside of the company, such as clients, insurance providers, and anyone else who does business with the former employee.

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4. Retrieve Company Property

Oftentimes, organizations will provide their staff with uniforms, computers, laptops, and smartphones. Managers need to retrieve these materials as it is their property. The following are the most common items that companies lend to employees that need to be returned.

  • Keys
  • ID badges
  • Computer accessories (modems, printers, and software)
  • Credit Cards
  • Confidential designs or plans
  • Tools
  • Safety equipment (headgear, eyewear, or gloves)
  • Company manuals and handbooks
  • Books

5. Conduct the Exit Interview

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Before an employee officially leaves, an HR representative must conduct a confidential interview with them. This allows the staffer to share insights on the work environment, their experience with the company, and their feelings about company practices. During the interview, HR should inform them about departure practices, such as how to return company property. They should also let the staff member verify their contact and mailing address to ensure they receive their W2. All information in the exit interview will be summarized by HR before it is sent to management.

6. Talk to IT Services

IT administrators need to know when an employee is no longer with a company so they can close the staffers' online business accounts. The administrator will also go through their returned devices and computers and erase all data so a new hire can use them. If the employee has clients, managers need to arrange a different employee to take over those accounts. In this case, it is best to leave the staffers' email and phone lines active for a designated amount of time to prevent miscommunication with clients.

7. Pay Out Vacation Time and Sick Days

Terminated employees must get paid for up to 30 days of vacation time they did not use but accrued during their time of employment. This also includes any amount of sick days they have saved up, as well.

8. Send the Final Paycheck

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State laws will vary, but generally, employers will need to send out the final paycheck on the employees' last day of work, on the next payday, or a specified date. State regulations will also dictate whether or not direct deposits are acceptable.

9. Confirm Status of Benefits

If an employee was enrolled in company benefits, management should write a letter establishing the status of their benefits. This entails when their healthcare coverage expires or how to use the Consolidated Omnibus Budget Reconciliation Act (COBRA) to find other options. Managers must ensure they are complying with the regulations set out by COBRA.

Key Takeaways to Employee Termination Checklist

  • An employee termination checklist is a compilation of duties that managers of a company must complete when one of their employees leaves their job.
  • It is important to have a comprehensive checklist because it will ensure the employees' departure is seamless and compliant with state laws.
  • Any delays or missteps to the termination process can result in lawsuits or future conflicts.
  • Some of the key tasks in a termination checklist include documentation, retrieval of company property, and sending out final paychecks.

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