Pay in lieu of notice

sjb1023

If an employee gives the 2 week notice prior to quitting as policy requests, is the company legally obligated to pay the two weeks if they tell the employee to leave immediately?

System

Legally, no. You do not owe money for work that was not performed according to FLSA. Your state may take a different view. Additionally, you should weigh the consequences both ways. If you tell the employee he/she doesn't need to work out the two weeks, why not pay? You would have had to anyway and it could divert a lot of problems. Especially if keeping the employee on board for the last two weeks will cause other problems for you.

JM in ATL

Another thing to consider is: What you do in this situation will set the "policy" of how you handle it in the future.

We will usually let people go immediately when they turn in notice if they are in a non-management position due to the sensitivity of our product, trade secrets and other sensetive areas.

We haven't had anyone in a managerial or above position resign in 7 years, so I don't have a set way we would handle that. But more than likely very similar.

But to answer your question the FLSA doesn't require it, but check your state laws.

marc

No, you do not have to pay, but if you ask them to leave immediately, then they are considered terminated rather than resigning. That usually makes the Ex-EE qualified for unemployment benefits.

That may or may not be a big deal in your company, but it is a piece of the puzzle.

AJ SPHR

Additionally, if you tell the employee to leave immediately and don't pay out the notice, be careful that you'll be encouraging other employees to not provide 2 weeks' notice. We always pay for the 2-week notice if we decide the employee should leave immediately.

On the other hand, if an employee provides a notice period but his/her performance slacks off or they start calling off work on those days, then we would consider ending their employment with us earlier than their notice period and NOT pay out the remaining part of the notice period.