Discharge/Layoff Checklist
Must Do
Must Not Do
Should Do
Terminating Agricultural Employees
Sample Forms & Notices
Written Notice of Termination/Layoff.
(EDD) pamphlet DE 2320, For
Your Benefit....The California Unemployed
SDI Pamphlet DE 2515
Health Insurance Portability and Accountability
Act (HIPPA) notice
Health Insurance
Premium Payment Act (state)
Sample discharge letter
The decision has been made to discharge or layoff an employee. The HR department and the company's attorney have reviewed and approved the impending action. But how do you implement it? Here are the things you must, should, and may not do:
1. Give the employee a "Written Notice of Termination/Layoff."
2. Prepare and give the employee a final paycheck, which must include pay for all hours worked before the termination/layoff and all other money due the employee, such as non-forfeitable vacation pay (a form of wages) and deposits for loaned equipment.
3. Give the employee Employment Development Department (EDD) pamphlet DE 2320, For Your Benefit....The California Unemployed. The pamphlet can be obtained from EDD by calling 916-322-2835. (When ordering DE 2320, also order pamphlet DE 2515, State Disability Insurance, which must be given to employees upon hiring.)
4. If the employee is covered by company health insurance, prepare (or obtain from your program administrator) the COBRA (or Cal-COBRA) 60-Day Notification for Group Health Plan notice. Also, prepare the Health Insurance Portability and Accountability Act (HIPPA) notice for the employee. Give the employee a copy of the Health Insurance Premium Payment Act (state) notice.
1. Where the employee owes you money, do not deduct from the final paycheck any amount of money in excess of the amount authorized by the employee for the regular payroll. In other words, do not deduct from the final paycheck a balloon payment for the repayment of a loan.
2. Do not withhold from the final paycheck any money for non-returned equipment loaned to the employee without the employee’s prior written authorization for the deduction. (While an authorization given when the equipment was loaned might suffice legally, it would be best to get at the time of discharge another deduction authorization from the employee. Any such authorization must be truly voluntary–that is, don’t condition the employee’s receipt of the final paycheck on the employee giving such authorization.)
Employers, though, are cautioned that the legality of deducting from an employee’s final pay any amount to cover the cost of non-returned loaned equipment–even upon the employee’s written authorization–has not been explored by the courts.
While section 9(C) of the Industrial Welfare Commission orders authorizes such deductions, the state Division of Labor Standards Enforcement (DLSE) in a Feb. 22, 1993, letter, noted court decisions have clouded the issue.
One California Court of Appeal decision, Barnhill v. Saunders, while disallowing a “balloon payment” deduction from final pay to repay a loan, broadly concluded: “[A]n employer is not entitled to a setoff of debts owing it by an employee against any wages due that employee.“
The DLSE therefore warned that a court at some point might hold that section 9(C)–and employer policies based on it–might be void as against public policy. Employers should therefore proceed cautiously in this regard.
1. Prepare a letter or memo stating the reason for the action. If the employee later challenges the action, the document will help show that the reason was not a pretext. See sample discharge letter.
2. If the employee is being fired for assaulting another employee or making threats of violence against your personnel or property, then contact the local civil authorities to alert them to possible retaliation.
3. Sanitize the employee's personnel folder. Destroy unnecessary documents unrelated to the employee's performance, pay increases, or safety training.