5 Payroll Tasks To Do When An Employee Leaves

While it was once commonplace for an employee to stay with one company their entire career before retiring, over the years it's become the new norm for a person to change job positions semi-regularly. According to a 2019 Bureau of Labor Statistics survey, the average number of jobs a person has in a lifetime is 12. Alongside this, many workers only spend about five years or less in every job. No matter what type of work environment you try to create within your company, with these numbers you're going to see resignations come your way. While there may be some job specific tasks that you need to add to your checklist, here are some payroll tasks that will need to be completed when an employee is leaving, no matter what type of industry you may work in.

5 Payroll Tasks To Do When an Employee Resigns

1. Obtain a resignation letter: Not only will this help solidify the employee's departure date and explain why they're leaving, it also can help protect the company from potential lawsuits.
2. Request a current mailing address: Though the employee may no longer be with the company, you'll still need to send them COBRA notices and their W2 Form when tax season rolls around.
3. Discuss benefits: Employees leaving will be sure to have a lot of questions surrounding their benefit plans. This will give you a chance to explain when their health benefits end, what potential government policies might apply to them, and what options they have surrounding their retirement funds.
4. Remove access to payroll or HR system: Depending on how robust of a system you use, you'll want to remove the employee on their last day. You might want to still allow partial access to let them check pay stubs and W2 forms, but you'll want to make sure they're restricted to non-company sensitive information.
5. Determine final pay: Alongside the amount they will need to be paid, you'll also have to establish when they'll receive their final paycheck. This timeline can vary depending on state laws, so check with your state Department of Labor in order to set up an appropriate policy.

Just like hiring new employees, it's important that you create and follow a process for employees that are leaving. This helps make sure that not only are you following all state and national laws, but that you're also creating a positive experience for both you and your employee as they prepare to leave the company. Still have questions or need help updating your company's payroll? Contact the experts at Future Systems!