We’ve written about notice periods and final paychecks before on HR Bartender. You can find those posts here, here and here. Today’s reader question puts the two of them together in an interesting twist.
An employee gave notice on a weekday advising us that their last day would be four (4) workdays later. In the same email, the employee stated they would not return to the office on their scheduled on-site office date, nor any other day through their last day. We have an arrangement that the employee is to work from the office two set days per week and work from home the other three days. The employee stated they will not come in on their regularly scheduled on-site day because they are scheduling interviews for a new job.
We responded by saying the employee’s last day could in fact then be the following day since it appears they are not able to continue to fulfilling their duties while looking for a new job. The employee gave notice to quit and the company expedited their final day. Do we need to pay them through the last date they gave or their new last day? And when do we need to issue their final paycheck? Thank you.
Whether or not to have an employee work out their notice period is a common question, so I asked Krista M. Cabrera, special counsel at Foley & Lardner LLP. She works in their San Diego office and focuses on discrimination, wrongful termination, harassment and wage and hour matters. I’m delighted she agreed to share her knowledge with us. Please remember that her comments should not be construed as legal advice or as pertaining to any specific factual situations. If you have detailed questions, they should be addressed directly with your friendly neighborhood labor attorney.
From a human resources perspective, we talk about notice periods being critical time for the company to work on finding an employee’s replacement. Is there a legal reason for employees to give notice? And if not a legal reason, is there a business reason?
[Krista] From a legal perspective, in most states employment is at-will and thus the presumption is that no notice is legally required on the part of either the employee or the employer unless the employer and employee have entered into an employment agreement with a final notice provision.
In some circumstances there may be a business reason for a notice requirement. For one, as stated above, final notice periods can give the company time to locate a replacement. Notice provisions also can be helpful if the company requires time to turn around a final paycheck.
Should employers have something in their company handbooks about what is considered an acceptable notice period? Why or why not?
[Krista] I recommend against a blanket policy requiring notice because it can (and usually will) be interpreted as a contract to pay the employee through the final notice period, whether the employer wants the employee to keep working for the company or not. Usually, the employer does not want an employee who has resigned to stick around and have access to confidential information while probably performing very little work, and thus employers often end up paying the employee for the notice period while the employee does no work.
In this scenario, we don’t know what the company considers an acceptable notice period. Most of the time, we think of two-week notice. If an employee gives less than two-week notice, is there anything the company can do about it?
[Krista] No, there is nothing you can do if the employee is at-will and has no employment contract. On the other hand, if there is an employment contract that addresses a penalty if an employee does not give notice (such as reduced severance) then yes.
I know of industries and positions where the day you give your notice is also considered your last day. It’s mostly because of the competition in the market. The company typically pays out the notice period, although the employee doesn’t come into work. Does the situation change when an employee’s notice is cut short because of performance issues?
[Krista] If the company policy requires an employee who resigns to give final notice, then the company should pay through the notice period, even if there are performance issues. The exception would be where there is a contract or policy stating that notice is inapplicable if there are performance issues. Such a contract or policy would have to clearly define the type of performance issues that would cause a notice payment to be terminated.
We’ve talked about the notice period and determining final pay. When do final paychecks need to be issued?
[Krista] In California and Massachusetts (as well as a number of other states), the company must give the employee the final paycheck on the last day of employment. In California, if an employee quits without final notice, then final pay is due within 72 hours of quitting. In other states like New York and Florida to name a few, the final paycheck must be given by the next regular payroll date.
I have to admit that I love getting your questions. It’s interesting to see what issues people are dealing with and it’s challenging to find answers. Keep those questions coming! I’m having great fun answering them for you.
Image courtesy of Sharlyn Lauby1