Employee Termination Guide
A clean termination is a sequence, not a conversation: final pay by state deadline, benefits continuation notices on time, property recovered, records kept. Most legal exposure comes from getting the sequence out of order, not from the decision itself.
Final pay timing
States differ sharply. Some require final wages on the last day worked; others allow the next regular payday. Commissions and accrued vacation have their own rules in several states. Terminating someone in a state whose timing rule you missed converts a routine separation into a penalty matter - check the state pages before the meeting, not after.
Benefits and notices
| Item | Typical requirement |
|---|---|
| COBRA election notice | Employers 20+ employees; within 44 days of the event |
| State continuation | Smaller employers in many states; deadlines vary |
| Final expense reimbursement | Per policy; document what was approved |
| Unemployment response | Factual, timely reply to the claim notice |
Documentation that holds up
Keep the performance record contemporaneous - reviews, warnings, acknowledgements dated when events happened. A file assembled after the decision reads exactly like what it is. Retain personnel files per state retention periods even after separation.
Under co-employment, the PEO processes the paperwork while the decision stays yours - see co-employment responsibilities, and handle the data side per exit data rights.
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Frequently asked
Must we pay unused PTO at termination?
Depends on state law and policy language. Some states treat accrued vacation as earned wages; others let policy forfeit it.
Who sends the COBRA notice if we use a PEO?
Usually the PEO administers it, but confirm responsibility and deadlines in writing - missed notices carry statutory penalties.
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