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HR Insights with Ali: Resignation vs. Termination: What are Your Responsibilities?


Posted on 7/19/2017 by Ali Oromchian, Esq.
When an employer-employee relationship is no longer beneficial to one or both parties, there are a number of ways to sever that relationship. Resignation implies that the employee instigated their own departure, while termination is the employer’s way of ending the employment. There are many requirements and legal ramifications for not adhering to these requirements in both instances.

Generally speaking, it is a best case scenario to the employer if an employee voluntarily resigns.With resignations, an employer can typically avoid unemployment claims or unlawful termination claims. These issues typically arise if the employee’s departure is involuntary. This is because in a resignation, the presumption is that the employee left at their own volition. Although there are circumstances under which an employee can claim that they were “forced” to resign due to a dangerous or hostile work environment, in most cases a resignation is better for the employer. Another thing to keep in mind, if your employee was working under a contract, you may be required to provide severance pay if this employee is terminated before the expiration of that agreement. Employees will usually prefer resignation to termination as it allows them to tell future employers that they left on their own accord.

Regardless of which route is used to end a working relationship, documentation is key. If the employee resigns, you will want to require a letter of resignation outlining their last day worked, so that you can have supporting documentation in their file outlining that they chose to leave. If termination is necessary, then the reasons behind such termination should be clearly documented and supported, including violations and dates of incidents.

If you do not want or expect the employee to return to your place of work, then this fact should be made clear. For terminations for cause, this fact is often clearly understood by both parties. But you should never suggest that future employment may be possible to a terminated employee if that is not the case. Otherwise, the employee may see the termination as a layoff and seek unemployment benefits. It is also harmful to the employee if they do not seek new employment based upon a false expectation that they will be returning to work for you.

Finally, you should be aware that state law dictates when an employee is owed their final wages, and this is dependent upon whether they resigned or were terminated. In California, for example, a terminated employee is entitled to receive their check immediately upon termination, while an employee who resigns must be given their final check within 72 hours (unless the employee gave more than 72 hours notice, in which case they must be given their final check upon separation). Additionally, violations of paying the termed employee’s wages could result in waiting time fees and additional remedies. As always, following your state’s laws and documenting all activity leading up to termination or resignation can help to protect your Practice in cases of labor disputes.
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