(Not) Breaking the Law: Ensuring Compliance During Offboarding

Over the past few weeks, we've been diving into the topic of employee departures and offboarding best practices. Check out our previous posts to see why it's important to talk about employee departures and why it's essential to come up with a strategy to handle them. If you'd like to get all this content in one place, be sure to download our Employee Departure Best Practices eBook.

There are a number of things to consider when employees leave your company. How you’ll communicate this information to their team and other coworkers. Who will take over their responsibilities. Whether you’ll be organizing a farewell happy hour, and if so, whether Joe will use the opportunity to practice his awkward stand-up routine.

But all jokes aside, one of the biggest things to keep in mind when employees leave is the question of compliance. You don’t want to find yourself in any legal sticky situations, so it’s important to be aware of what you should—and shouldn’t—be doing. Please note that employment laws vary by state, so the following suggestions are merely presented as guidelines. Be sure to check with your legal counsel to learn what applies in your specific situation!

Generally, employee departures can be broken into two main categories: voluntary and involuntary.

If an employee is leaving voluntarily, there are a few legal and tax matters to consider.

  • Does your company have an NDA or non-compete policy? If so make sure the departing employee has filled out this paperwork.

  • Ensure that the employee is paid out for all outstanding expenses and PTO days.

  • Inform the employee of their continued insurance and benefits options.

  • Ask the employee to supply their up-to-date mailing address (and tell them who to contact if their mailing address changes) to ensure they receive their W-2.

When an employee is leaving involuntarily, all of the previous points still apply, but there are a few additional considerations to be aware of.

  • Ensure that the dismissal is in line with your company policies and previous actions (e.g. you can’t dismiss one employee for an action that you only reprimanded another employee for in the past).

  • Document key issues in an audit trail to protect the company against unfair dismissal claims.

  • In especially sensitive cases, you may find it beneficial to have additional HR representatives present.

  • If you are offering a severance package, clarify the exact terms of what you are offering.

Taking the time to outline everything that needs to be done and creating a set process helps ensure that nothing falls through the cracks, cuts down on the likelihood of clerical errors, and contributes to an overall better company culture. You put a lot of time and effort into treating your employees well during the rest of their time with you, and there’s no reason that consideration should end abruptly when they leave.

Still have questions about how to best handle employee departures? Be sure to download the Employee Departure Best Practices eBook. Get your copy by clicking below!


Melissa Suzuno

Melissa Suzuno is the Content Marketing Manager at Greenhouse, where she gets to share her love of the written word and endorse the use of the Oxford comma on a daily basis. Before joining Greenhouse, Melissa built out the content marketing programs at Parklet (an onboarding and employee experience solution) and AfterCollege (a job search resource for recent grads), so she's made it a bit of a habit to help people get excited about and invested in their work. Find Melissa on Twitter and LinkedIn.

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Company Culture