Paying a Salaried Employee at Resignation

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As your employees turnover for various reasons, you'll find that you may have occasions where employees you pay a salary to have decided to resign or quit. When a salaried employee quits, there are usually questions about the correct way to terminate their employment, and how to pay them.

There are no federal laws for providing notice for terminating employees. Some states have termination laws you'll need to be aware of. You may want to develop procedures and policies that guide your managers on termination methods procedures.

Follow Employee Termination Law

There are no federal laws that regulate when you have to pay the last paycheck for a salaried employee that resigns. However, some states have laws for paying within a certain time so you may want to check with your state department of labor to be sure you are following the law.

Develop a Procedure for Salaried Employees

Giving notice when quitting or resigning is a tradition that gives an employer time to work for finding a replacement. However, it is likely that you would prefer to have some notice when an employee is going to be leaving.

You can create a policy for this if necessary, and if you want to make it binding you could put it in your employee contracts. Make sure you specify whether the employee will be paid during this notice period if they are not required to come into work.

You have the choice to pay them only for work completed or pay them for the next two weeks.

If you have a two weeks notice requirement in your employee contracts, you should honor that contract and pay them for the last two weeks of work. There may be times when you need to get an employee away from the workplace immediately upon resignation.

Post Notification

How you handle the employee's last days with your company can depend on a few issues. You may not want employees lingering around the workplace after they have decided to quit, or you may want them to tie up any loose ends and create a portfolio of procedures and contacts relevant to their work.

You may have an employee whom you can trust to work as if they weren't quitting for their final two weeks, in which case you can decide to let them continue coming into work.

An employee may be disgruntled when they are giving their notice. Keeping them around allows them to influence other employees. Some businesses have adopted the practice of letting an employee go the day they give a notice. This may be beneficial if you need an employee to leave quickly.

In both of these cases, if your contract with the employees states that they must provide you with two weeks notice, you become obligated to pay them for the final two weeks whether you ask them to work or not.

If you don't have a notice clause in your contracts, the only requirement is that you follow your state's guidelines for termination and pay. A salaried employee's pay can be prorated for the days they worked in the pay period before and including their final day.