There are many loose ends that need to be handled when an employee leaves your organization. Whether the separation is immediate due to egregious misconduct or the employee gives ample notice, you need to be prepared to manage all the administrative tasks that come with a separation of employment.
Use this checklist to help ensure a smooth offboarding process.
Retrieve equipment, secure network access and update your employee directory
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Collect any property that belongs to the organization, such as a work-issued cellphone, computer, credit card or vehicle.
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Remove the employee’s access to the worksite by disabling key cards.
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Cut access to computer networks, databases and other online accounts. Disable the employee’s access to their work email and voicemail.
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Redirect any email or phone messages to another point of contact so no communications related to the organization’s business get lost.
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Update your organizational chart and employee directory.
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If the employee’s departure is planned, let your information technology team know in advance when to deactivate their accounts. This will ensure that everyone is on the same page as to when the employee should no longer have access.
Prepare information packets
When an employee leaves your organization, you may need to provide them with some paperwork.
COBRA notice
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a separating employee may be entitled to enroll in continued health care coverage. The mandatory COBRA notice applies to all private employers that offer group health plans and have 20 or more employees. Many states have their own so-called “mini-COBRA” laws, too.
401(k) plan balance notice
If severance is being offered, provide the employee with the applicable separation agreement and release of claims. If the employee is age 40 or older, an additional notice of rights to review and revoke a separation agreement may be required under the Older Worker Benefits Protection Act.
Noncompete or nonsolicitation agreement
If there’s any concern over the employee stealing the organization’s clients or customers, consider whether it’s feasible (and legal) under applicable state laws to ask them to sign a noncompete or nonsolicitation agreement.
Conduct an exit interview
Depending on the nature of the separation, you may opt to conduct an exit interview. An exit interview is a great way to:
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Answer any last-minute logistical questions about the employee’s last paycheck, continuation of benefits, etc.
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Find out what the employee liked or disliked about working at your organization
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Learn about perceptions of management and leadership effectiveness
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Get a better understanding of the employee’s job role and what qualities to look for in a replacement
Information gleaned from an exit interview can help you evaluate whether the organization, particular teams or management should make adjustments to better support the workforce.
But an exit interview shouldn’t be viewed as an invitation to unload grievances. Keep it as positive as possible and focus on what the departing employee thinks someone new stepping into their role needs to succeed.
Communicate effectively
Be transparent with your remaining workforce, clients and customers about the employee’s departure. There may be instances where the organization is not at liberty to disclose all of the details of an employee’s departure, but gossip is bound to happen. By being as open as possible, you can better control the narrative surrounding the employee’s departure.
Transfer knowledge
If possible, ask the departing employee to document what their successor needs to perform the role. Ask them to explain things like:
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The processes they use to carry out their daily duties
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Who they deal with (both internally and externally) on a regular basis to accomplish their job
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Which documents or materials are integral to their job functions
This is an important step, says the knowledge management software company SweetProcess. Once the employee leaves, the opportunity to tap into their knowledge goes with them.
Confirm final pay and recordkeeping requirements
Generally, state and local laws govern when and how to issue a final paycheck. Consult with a labor and employment attorney who can advise you on what your obligations are. They can also explain your options for collecting any advances paid to the departing employee and answer any questions about final paycheck deductions.
Once the final paycheck has been issued:
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Make sure the employee is no longer active in your payroll system.
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Retain payroll and tax records. Under the Fair Labor Standards Act, payroll records must be kept for at least three years. IRS recordkeeping rules require employers to retain employee tax records for at least four years.
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Hold on to the employee’s personnel file. You’ll need it to defend yourself if they file a lawsuit against the organization for wage and hour, discrimination, retaliation or another alleged violation.
Be consistent
All things come to an end, both good and bad. By taking a consistent approach to offboarding, you’ll be in a better position to protect the organization’s interests, avoid legal risks and confidently close the chapter on the employment relationship.
