An employee has submitted her resignation with 3 weeks notice and the company would like to accept it effective immediately. Are we required to pay severance? How are unemployment benefits affected isf severance is paid?


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  • If we had an employee that resigned - per our policy we require (or is that desire...) two weeks notice. If we wanted to part company as of that day we would still pay them for the two weeks and they would be paid on the regular pay periods.
  • Really depends on individual, as well as company policy. Good practice is to pay out the two weeks if you send them packing.
    I gave my notice this morning....... effective 12/31/04. They asked if I could stay an addition week if needed.
    My $0.02 worth,
    DJ The Balloonman
  • we call that "pay in lieu of notice", eg we didn't want them around for 2 weeks so we said "so long" and paid them for that time in the next pay period. they could apply for UI immediately but the benefit period would not count the 2-week notice period.

  • DYNAMITE9551: EMPLOYEES WHO RESIGN OR ARE TERMINATED FOR CAUSE, DO NOT COLLECT UI CHARGED TO OUR HISTORY. We fight everyone of them and have won all, so far. Medical Disqualification is the one area we do not fight, but attempt the commission to pay the UI which is chargeable to our history. When one resigns we normally accept and send them packing unless we are really caught off guard and surprised at the resignation. A disgruntal employee can be a real downer for all associated and can cause harm to the company if in a sensitive position.

    Pay them out and move on is my recommendation!

  • I don't know how much difference this will make for you, but if you send her packing now, your termination trumps her resignation for Unemployment purposes.

    If it is a key person, such as DJ's situation, I will try to get more time from them, if only for training their replacement and if I think I can trust them to be diligent. If it is someone I don't particularly need to have around and/or someone who will sow seeds of discontent, I thank them for their service and send them on their way, with pay through a maxiumum notice period of two weeks.
  • Your best bet is to pay them for their notice period. Otherwise you turn the resignation into a termination, you have deprived them of a few weeks of earnings. It is not worth the trouble.
  • I agree with what Craig said, and would also add you are not required to pay severance, unless it is to follow your own policies.
  • I think you're confusing the word 'severance' with the act of paying out the notice. In most, if not all, states if you do pay out the notice, typically two weeks, they do not qualify for unemployment insurance. In our state, if you do not pay out the notice, they do qualify for UI, if only briefly. A call to your local UI Claims Office will get you a generic response as to how your state law handles that and whether paying out only two weeks is considered by them to be reasonable. Also, in my state, severance pay does not affect unemployment any more than vacation pay does; however, the two weeks I might pay one who resigns with notice would be considered wages which WILL affect UI. In any event, if you send them packing now without pay, they will probably draw.
  • If you're at-will, then no. We consider "Notice" simply a courtesy extended by the employee and we have at times "absolved" the employee from working the notice, and are not obligated to pay for it.
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