Managing Employee Exits

IEL Jan 2023 Blog Image

It is always challenging to part ways with an employee. Whether it is a choice you have come to as an employer or a decision made by an employee to leave their position, there are steps you should take to minimize your risks and protect your company.

When handling an employee termination, there are some recommendations you should follow. First, treat all employees consistently and have a documented procedure on how your company manages terminations. As best possible, allow employees to have an opportunity to improve through a well-documented performance improvement plan. Before finalizing a termination, run through a checklist that includes the following:

  • A developed termination plan that includes the terminated employee’s worksite location, at least two employer representatives, and notification to security, if needed.
  • Consultation with legal counsel to be aware of potential legal issues and avoid possible retaliation claims.
  • Identified items you need to collect from the employee, such as keys and office equipment.
  • Prepared information that will be provided to the employee, including severance details, outplacement services, and/or any assistance available.
  • Notification to your Information Technology department/contractor when to remove the employee’s access to company email, shared networks, and server.
  • Plans to share the news with the rest of your team.

Even if you have given an employee warning and initiated disciplinary actions, an employee may still be caught off guard by the news of their termination. That is why it is best to keep communications short and straightforward, based strictly on what has been documented.

What You Need to Know About Unemployment Insurance

A joint federal and state program, unemployment insurance provides short-term benefits to those who do not currently have a job while searching for new employment. It is determined by the state how long and much an unemployed worker receives.

Your company and other businesses fund unemployment programs through FUTA (Federal Unemployment Tax Act) and SUTA (State Unemployment Tax Act) tax payments. Depending on the number of your company’s terminations, a high number could trigger an increase in your SUTA tax rate. Typically, your SUTA tax rate is based on your number of employees, the amount paid in wages, and the amount of unemployment insurance benefits collected by former employees.

However, not all jobless workers are eligible for unemployment benefits, as there are different rules surrounding who can claim benefits. This is based on the reason why an employee was terminated. Most qualified individuals must be out of work because of reasons beyond their control, such as downsizing or layoffs, and meet any other requirements delegated by their state. Some forms of misconduct do disqualify a terminated employee from collecting unemployment compensation benefits, which include:

  • Theft of company property
  • Substantial damage to company property
  • Falsifying company records
  • Harassment, assault, or physical violence in the workplace
  • Violating company policy, like a drug and alcohol policy
  • Excessive unexcused absences or tardiness

Employees that resign by choice generally do not receive unemployment benefits unless they can prove just cause, such as unsafe working conditions or harassment.

When a former employee files for a claim, your company will receive notice from the state. As the employer, you have the right to challenge any unemployment claims you believe to be false or invalid. This is why it is imperative to have concise and accurate documentation from the employee’s time of employment to their termination to help back up your dispute of the claim and to avoid a potential lawsuit.

PEOs Can Help Minimize Your Risk

A Professional Employer Organization (PEO) like Integrity Employee Leasing offers objectivity and consistency to your HR department. We will help ensure that your leadership and staff are following proper HR procedures from hiring to training through the employee’s exit. Additionally, our certified and responsive HR specialists will keep clear and correct documentation throughout each individual’s employment term with your company.

Integrity Employee Leasing is here to help ensure that your company is compliant and in line with all state and federal laws and regulations. We can also help train your managers and employees to reduce the risk of harassment, confirm that you have the appropriate HR policies and procedures in place, and advise on HR best practices to mitigate the likelihood of unemployment claims and lawsuits.

Having Integrity’s professional HR department as an extension of your business can not only help you navigate through unemployment claims but can also help you improve your staff’s overall employment experience. Resulting in lowering your turnover in general.

Discover How Integrity Can Help Your Business

Whether it is helping you create a comprehensive termination plan or assisting you with unemployment claims from former employees, Integrity’s Human Resource department is ready to support you with your business needs. Find out how Integrity Employee Leasing can help protect and grow your business. Call us at (941) 625-0623 for a free consultation.

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