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What's the Difference Between Termination and Resignation?

Posted by Dominic Kelley on June 11, 2020

“Termination” and “Resignation,” and When Does it Really Matter?

Like most practitioners, you’re probably starting to think about how to safely re-open your practice and bring your team back. However, some of your employees may not be interested in returning to their jobs. Does this mean they have resigned, or (because they are not returning) are they terminated? And, why or how does it make a difference?

To answer these questions, we must first look at the distinctions between “termination” and “furlough.” 

Which Is Which?

Let’s start with how things were left on your employees’ last day in the office. There are some very real differences between terminating and furloughing an employee. Here are some of the ways each is defined.

Termination

Most simply, a terminated employee is one whom you told was “terminated” or “laid off.”  Additionally, you completed the other appropriate procedures, including: 

  • Adhered to your practice’s stated termination policies
  • Had employee sign a final paycheck acknowledgement and a change in relationship form at time of final paycheck
  • Provided final paychecks that included compensation for time worked, sick and/or vacation time owed per your policies, plus any final paperwork per your state
  • Collected any practice property, such as keys, uniforms, or equipment

If none, or only some, of these actions were taken, it is likely your employees are considered furloughed. If you are unsure of the action you took, please contact us immediately to determine what action is needed.

Furlough

Similarly, a furloughed employee is one whom you specifically told was “furloughed,” and made clear to them that they were not “terminated.” Therefore, this employee:

  • Has not been terminated or laid off
  • Has not been given any final paperwork or a final paycheck
  • Is waiting for the office to re-open so that they may return back to work

Termination, Furlough and Resignation: Why Are They Important if the Employee Doesn’t Want to Return?

So, as you can tell from the information above, the difference between a termination and a furlough is pretty clearly cut — until the employee decides they do not want to come back to work, that is. That is when things can get a bit murky.

What if a terminated employee doesn’t want to return?

Let’s say you evaluate the needs of your soon-to-re-open practice, and decide that a terminated (“laid off”) employee has the qualifications to match those needs. So, you extend an offer letter to that employee that outlines their previous or a new or adjusted job description. (Perhaps the hours, the rate of pay, or the requirements have changed from pre-Covid times.) Then that employee declines the offer or requests a different job description than the one you have provided them. Here are some things to keep in mind:

  • You need to be clear with this employee that if they decline your offer, they are no longer an active employee of the practice, and you can fill the position with another candidate. However, reiterate to the employee that you are offering them the position first because you want them to return to the practice.
  • It’s also important to remind the employee that because they have turned down your job offer, they will most likely lose their unemployment benefits*.

*Here is what you want to avoid: Your terminated employee declines your offer, then realizes that means the end of unemployment benefits, returns (asking for their job back), only to discover that their position has already been filled by someone else and they now have no job nor unemployment benefits.

What if a furloughed employee doesn’t want to return?

Okay, so now is when things really become up to your own discretion. Let’s say that (in preparation of re-opening your office) you contact a furloughed employee with a recall letter that includes a new job description (adjusted hours, pay, protocols, or duties). Then, that employee declines the offer. You have two choices that we've outlined below.

Please keep in mind if the employee cannot return due to a protected reason, such as a disability or a reason under FFCRA, we advise that you speak with an HR Specialist to review your options and ensure you are in compliance.

1) Call It a Resignation

If your furloughed employee decides to turn down your job offer and to not return back to your practice, you may officially declare that the employee has resigned. That means:

  • You will need to have that employee complete resignation paperwork
  • The employee will most likely not be eligible for unemployment benefits
  • You are not obligated to hold the job open for them and may look for another candidate to fill that position

You might choose to make this decision if you are not willing or able to accommodate the furloughed employee's request for a different job description than what was offered.

Please keep in mind if the employee cannot return due to a protected reason, such as a disability or a reason under FFCRA, we advise that you speak with an HR Specialist to review your options and ensure you are in compliance.

2) Call It a Termination

You are also well within your rights to qualify this event as a termination. Doing so means:

  1. You must complete the proper steps of employee termination (paperwork, PTO/vacation pay, security badge collection, etc.)
  2. The employee will be eligible to collect unemployment benefits
  3. You are free to fill their position with a new candidate

You might choose to make this decision if the employee truly cannot work for you at this time (for a reason that is not protected). In this way, you are not leaving them without the financial support of unemployment benefits since they will likely still be eligible.

As you can see, while you do have a little leeway when it comes to calling a team member’s non-return a resignation or a termination, there are some key factors that should inform your decision. Most importantly, confirm what the status was of the employee at the time of practice closure. As always, be sure and complete the proper paperwork and protocol, regardless of the decisions you make in dealing with your employees. 

And remember, we’re here to help!

 

If you are a current HR for Health client and have additional questions, please reach out to our team by calling 877-779-4747. Please keep in mind that due to an influx in questions related to the COVID-19 outbreak, our response time may be slower than usual, but we will get back to you as soon as we can! 

If you are not a current HR for Health client and have additional questions, please schedule an HR consultation with us by booking time here or calling us at 877-779-4747, option 1. 


We provide services to help you handle compliance with state laws, hiring, and all your other HR needs.  If you have questions about managing your employees during the COVID-19 pandemic or any other questions, please reach out to us and SCHEDULE A CALL, or call: 877.779.4747, or email: compliance@hrforhealth.com


HR for Health is one of the nation’s leading Human Resources Management Systems (HRMS) used by small to mid-sized practices. HR for Health has provided the following complimentary articles to ensure you have a game plan when addressing complex HR matters.


 

Quick note: This is not to be taken as legal or HR advice. Since employment laws change over time and can vary by location and industry, consult a lawyer or HR expert for specific guidance. Learn about HR for Health's HR services

Topics: employment updates, covid-19, coronavirus

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