How HR Should Handle Pay When an Employee Resigns
Let's consider the following scenario. The employee's resignation was welcome and you didn't believe keeping him or her around for two more weeks would benefit your company or the other employees. In fact, it may hurt employee morale. So, you've determined that their services should end that same day. You walk the employee out the door and wished them well in all their future endeavors.
Your big question is: does that mean the company should pay for the additional two weeks time that was given as notice? Should I (the employer) pay the employee as if he or she had been allowed to continue when the company accepted the resignation?
You Need to Consider Setting a Precedent
Generally speaking, most employers would want to pay for the employee's two weeks just as if he or she had worked for the next two weeks.
That's because you don't want to set a precedent or find yourself in a situation in which you treat employees differently. Assuming that you might want a good, valued employee to work the two weeks after their resignation, or to recognize their past contributions by paying for their time, you want to leave your options open.
Paying some, and not other employees, following a resignation, no matter why they resigned, could very easily be interpreted as discrimination, which is an HR professional's worst nightmare.
Consider the Workplace Environment and All Employees
If other employees know that you may not allow them to work out their two weeks' notice or receive pay for the notice time, you encourage employees to not give two weeks' notice at resignation.
You will end up creating an environmental norm in which people just quit if they need to be paid for their last two weeks on the job. You simply have to operate on the premise that most (if not all) employees want their final paycheck at resignation.
Most likely you'll be grateful that a non-productive employee whom you wanted to fire anyway, is leaving. The best course of action is to take the high road with a thank you gift of two week's pay for the time, energy, paperwork, and so forth, that you were saved with their resignation.
Two weeks' pay is a nominal figure in comparison to what your organization may have experienced if you had gone the traditional routes of a performance improvement plan (PIP) or progressive disciplinary action.
Take the Legal High Road
There is very little likelihood that this employee would be in any position to sue you for any reason for his or her resignation. If they did, if you fork up the two weeks following their resignation, you look like the good guy who did the right thing—always a good position to be in should you end up standing in a court of law. And, while your objective in wanting to remove the employee from your company is accomplished and all should be well, do check with your employment law attorney before you take action to understand all the parameters of what happens When Employees Resign.