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pay in lieu of notice
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pay in lieu of notice
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I recently had an employee turn in her 2-week notice. She is going to work for a competitor, so I dismissed her the same day. I am planning on paying her out the 2 weeks. My policy is to pay for benef
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pay in lieu of notice
posted at 6/19/2011 10:48 AM EDT
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Posts: 4
First: 6/19/2011 Last: 6/21/2011 |
I recently had an employee turn in her 2-week notice. She is going to work for a competitor, so I dismissed her the same day. I am planning on paying her out the 2 weeks. My policy is to pay for benefits the entire month after termination/resignation. Her 2 week notice stretches out to the first day of the next month (July). Since my policy is to pay the entire month of the last day of employment, am I obligated to pay her benefits for the entire next month? I am located in the state of California.
Thank you in advance for your response. |
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pay in lieu of notice
posted at 6/19/2011 2:18 PM EDT
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Posts: 562
First: 11/12/2009 Last: 9/14/2011 |
Yes, you are. Absent any other contract to the contrary, by accepting a 2 week notice you've now made the employment relationship a finite contract of employment. Since the employee was willing to work the 2 weeks and you chose to not have her work the time, you're on the hook for the 2 weeks of pay. |
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pay in lieu of notice
posted at 6/20/2011 10:05 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
Nork, are you stating that because it is CA state law? Just curious because I have never heard the 2 week theory of required pay-in-lieu-of-notice for any state and didn't realize that even CA required it. Do you have any cite/source for it that I could read up on?
I do know that many states will take that into consideration on UI benefits. |
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pay in lieu of notice
posted at 6/20/2011 10:45 AM EDT
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Posts: 35
First: 8/3/2004 Last: 6/20/2011 |
Since your "Policy" is to pay for the full month, if you don't do it for this one when you have always done it for others, I believe that would be discriminatory. How would you explain to a Judge that you just didn't want to pay for this one because she only worked the first day of the month?? |
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pay in lieu of notice
posted at 6/20/2011 10:48 AM EDT
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Posts: 4
First: 6/19/2011 Last: 6/21/2011 |
Thank you so much nork for your reply.
I am still wondering about the second question, though. My policy is to pay for the entire month of benefits (health, dental, etc.) the entire month after resignation. Technically, her last day of work is on July 1st(since this is the last day of her 2-week notice). Am I obligated to pay her benefits for the entire month of July since that's my current policy? Thank you in advance. |
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pay in lieu of notice
posted at 6/21/2011 6:02 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
As to the second question, it would not be against the law to change the policy on a go forward basis. There are no laws requiring that you provide employer paid health insurance at all much less to a terminated employee (beyond COBRA and state level benefits).
Now it is best NOT to pick and choose who you provide it for without very specific, standard criteria (say executive level only for instance) Otherwise that could lead to unintended discrimination or disparate impact. Honestly providing a whole month of benefits is very generous and I don't know any other company that does so. In Texas, due to our small group policy laws, we must only cover through the end of the current month (and we can't get the prepaid premium back anyway). But it is my understanding that TX is one of the few states that requires coverage to go through even the end of the current month. Hopefully you have caveated your employer policies with the right to change them at any time. And I know many employers that do not pay out any notice time, but still ask the employee to leave immediately -- mostly due to the knowledge that once an employee has decided to leave, productivity decreases and often attitudes can spread quickly. And many times the money is just not there to do so for all who leave. Is it good employer practice to pay out that time period? There are ramifications to not paying out that time -- that is the employees tend to stop giving notice if they know they will be walked out the door with no pay during the notice time. But there is also a lot to be said for asking them to leave immediately, with or without pay. While some may believe an employer owes pay for that time period, beware that there are employers that don't share that same belief. And I've never seen a successful wage claim for that time period. I'd love to see any documentation of where someone has won a claim. |
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pay in lieu of notice
posted at 6/21/2011 9:16 AM EDT
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Posts: 562
First: 11/12/2009 Last: 9/14/2011 |
Upon further review......
rrupert is almost entirely correct that no pay is required by state law for a 2 week notice period of the employee is shown the door immediately. The "almost" part comes in if the employer requires a 2 week notice period and then chooses to walk the employee out the door - in which case the employer is obligated to pay the 2 weeks. And that's just a few states (and I think California is one of them) |
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