Long gone are the days where companies could expect every employee to stay with the same employer for decades. We now live in the age of “job hopping,” where employees are regularly changing jobs for various reasons, such as higher pay, better benefits, flexible hours, or a more fitting workplace culture. Some employment consultants are actually recommending a person change jobs every 2-3 years as a way to increase pay beyond what annual raises at the same company will provide. And, it is not just certain industries or pay ranges affected by this new workplace trend, rather, employees regularly changing employment is seen anywhere from minimum wage workers all the way to corporate executives.
With job hopping as the new cultural norm, employers are finding it difficult to retain employees and finding quality talent to replace departing employees. High turnover rates mean employers must expend a significant amount of time and energy ensuring the company’s workflow remains uninterrupted.
One way to prepare for high employee attrition is to create company policies and procedures related to employee departure. Being proactive about this issue saves employers time, allowing the company to remain primarily focused on business continuity and finding ways to attract and keep new talent. But more importantly, if a situation arises where an employee’s departure is due to less than ideal circumstances, having policies and procedures already in place to handle the situation prevents a company from becoming susceptible to claims that could become a costly administrative and legal nightmare.
Where to Start
When developing an employee departure policy, it is important to recognize the unique nature of a particular business. While the following is not meant to be an exhaustive list, considerations such as the number of employees a business has, how they are paid, when are they paid, what benefits they receive, where they work (in the office or remotely), and if they have company property are a good place to start.
For at-will employees, departure from the company can be at the choice of the employee or the employer, but resignation and termination are treated differently in several ways. In Colorado, knowing how, when, and how much the company is expected to pay on the employee’s last paycheck is critical and can prevent a costly fine assessment from state regulatory agencies. Depending on the circumstances, the employer may only have a 24-hour window to handle this issue in a legally complaint manner. An employer also must be prepared to comply with the law in terms of notification about unemployment insurance. Also, if a company offers benefits, there should be a plan on how to advise a departing employ about any rights to continue benefits if such rights exist, as state and federal law impose certain requirements depending on the size of the company.
In addition to being prepared to handle the tasks related to a departing employee, a company should be ready to look for new hires as soon as possible. This includes being prepared to comply with any law that requires an employer to offer a higher position to existing employees before seeking outside applications. A company should have a job description ready to post before it is necessary to post it and should know what the law requires to be included in a job posting. For example, some states now require a salary range to be posted for every position. A job posting should also avoid language that might be considered discriminatory.
Set the Tone
The most professional employers understand that how they react to employees leaving sets a tone that impacts company morale even after a departing employee is gone. Consider the common situation of an employee giving a current employer two-weeks’ notice of an intent to resign and how two different companies might handle the issue.
A company that never considered policies and procedures related to employee departure puts themselves in the difficult position of having neglect other work to figure out all legal duties required to the employee leaving, or worse, simply ignoring its legal obligations to the employee. When an employer focuses on a departing employee, it will not escape the attention of the remaining employees that the workload is the same but there are less employees to share the load. Employees may become unhappy or worried about receiving more work for no additional pay, potentially causing more harm. Additionally, if the company makes a misstep in its duties to the departing employee, the employer might be subject to possible regulatory fines or worse.
This unenviable position can be mitigated with a bit of planning. A company prepared for an employee departure can handle it based on previously established policies and procedures so that management can primarily focus on how to manage company’s workflow until a new person is hired. This will illustrate to remaining employees that the company is competent, organized, and trustworthy.
It is wise to have a written policy requiring documentation about certain facts related to an employee’s separation. Keeping track of when the company received a resignation and the employee’s last day of employment is standard. Certain circumstances might warrant documenting more thorough facts about an employee leaving, such as if the employee was fired. Employers might want departing employees to sign the written record outlining the termination in order to verify it is accurate. Additional information such as a written resignation letter, employee write ups, and witness statements may need to be kept. A good employee departure policy will outline what additional documents should be kept, how long to keep them, and where to store an employee termination files so accessibility to the information is limited.
One of the most important parts of recordkeeping is consistency. When an employee quits or is fired after only working for a few weeks, the separation might seem so insignificant that it feels pointless to take the time make a written record of it. But it is impossible to know at the time of termination if a written record might later be needed as an exhibit in an administrative hearing against the company filed by the ex-employee 250 days after leaving the company. Or if an employee is rehired 3 months after quitting, the employer will need the employment termination record to determine if it must provide the rehire with previously accrued paid sick leave as required by the Colorado Healthy Families and Workplace Act. When it comes to record keeping, consider the bigger picture and maintain consistent records.
Return of Company Property
When employment relationship is ending, an employer should also consider what company property might be in the employee’s possession. Ideally, the employer has an accounting or other record of what property was in the conditional possession of the employee. In Colorado, there may be ways for employer to be compensated for un-returned company property by withholding certain amounts from the employee’s final paycheck, but there are statutory requirements an employer must follow precisely or else the employer loses the right to withhold any funds. If a company withholds funds from a departing employee without following the statutory requirements, it makes itself vulnerable to a viable wage claim from the employee, where the employer may not only owe the money it kept from the employee, but fines and penalties for doing so.
When the Employee Relationship Gets Complicated
The circumstances of an employee’s departure are not always black and white and not every scenario can be captured in a company’s policies or procedures. Management should be aware of applicable state and federal laws that might warrant certain exceptions to previously established company rules. For example, if an employee misses 4 days of work without calling the employer, but then returns to work on the next scheduled day, does the employee still have a job? While an employer may initially believe the employee voluntarily resigned, or that termination is appropriate, what if the absence was due to a federal or state protected reason and the employee provides written proof of such? Can the employee still be fired? If not, and the employee must remain employed or be reinstated, can he be written up for this incident? What if the company already hired a replacement? Does the company now have to fire the replacement to rehire the employee that missed 4 days? Can the employee and/or the employee’s replacement file an administrative claim or a lawsuit against the company based on these circumstances? This example is meant to illustrate that the facts regarding separation from employment are not always simple. In complicated situations that cannot be addressed in a written policy or procedure, it is best that an employer contacts a qualified attorney to assist in the matter.