When An Employee Leaves

Sometimes an employee leaves and there’s a feeling of regret – a good colleague has left and his or her input will be missed. Sometimes an employee leaves and there’s a party in the break room immediately after. Employee terminations and resignations bring up a wide range of feelings. There are also steps you as an employer need to take to stay compliant with New York State law. 

For almost thirty years, New York has required employers to give written notice to employees who have terminated or resigned their employment. This means it applies even to employees who quit. It doesn’t matter if the employee stands up in the middle of the room and quits, or sends a text or email, the employer must give this notice. 

Often, this requirement has been ignored, but recently the Department of Labor has been enforcing New York Labor Law §195(6). What does that mean? If an employer fails to provide the required notice, the employer can be subject to fines up to $5,000 per employee. In addition to that fine, former employees may bring civil actions against employers for failure to provide the required notice. But all of this can be avoided with a single piece of paper. 

What does the law require? An employer must notify the employee: (1) that he or she has been terminated from employment, (2) the exact date of that termination, (3) the exact date of the cancellation of employee benefits connected with the termination. This notification must be in writing and must be given to the employee no later than five working days after the termination. If you offer health or accident insurance and don’t tell the employee about its termination, there are additional penalties that can take place. 

As an employer, you should create workflows to manage employee exits. Obviously, you want to eliminate risks with a departed employee. For example, you should collect keys, badges, company issued equipment such as a laptop or cellphone, turn off email access, change network passwords, and the like. If you need to remind the employee of his or her obligations to keep information confidential or not to solicit clients or employees, you should do so. And, of course, you should issue the departure letter with the required information.

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Francine E. Love
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Founder and Managing Attorney at Love Law Firm, PLLC which dedicates its practice to New York business law