Rules on Pay After a Resignation

Do Voluntary Resignations Require Advance Notice?

When you’re watching your labor costs, it is important to know how to handle an employee resignation, compensation-wise. If you require employees to provide two weeks’ notice of their resignation, you may have to pay them for that full period even if you release them earlier. But, even if you only request the advance notice, it still may be better employee relations to pay for that full two-week period.

Q: Can we require employees to give two weeks’ notice of their resignation? What happens if we tell an employee to leave prior to the end of the two-week notice period, are we obligated to pay the employee for the full two weeks? What if we only request the notice but do not require it?

A: If you specifically require employees to give notice, as opposed to simply requesting the notice, you may have to pay for the full two-week period even if you ask the employee to end employment before the completion of the two weeks.

Most employers request or require that employees give advance written notice of their intention to resign so that an orderly transition can be made. The amount of advance notification requested may vary depending on the nature of the position. Many employers suggest two weeks as an appropriate amount of notice for most positions, although up to four weeks may be preferable for upper management.

(Download a free Termination of Employment model policy including HR best practices and legal background.)

Whatever the length of the period, though, the way you specify how resignation notices will be handled is important. A requirement, as you are suggesting, that employees give a certain amount of notice of their resignations, in some states may create an implied contract obligating you to give an equal amount of notice before terminating an employee. So, in those states, if you require notice of a resignation and then decide to terminate the employee earlier, you may be required to pay the employee for the balance of the notice period. Further, you may even find that you are required to give a similar amount of notice to any employee that you terminate. For this reason, a policy that requests notice from resigning employees, rather than requiring the notice, may be a more prudent course to prevent potential contract claims.

However, even if you only request two weeks’ resignation notice, you should be prepared to pay out for the full period if you then decide to terminate the employee early. Employers often have legitimate reasons for wanting an employee to stop working immediately, such as concerns about security or reduced employee loyalty or productivity. In these cases, many employers pay for the notice period, even if they have not created a contractual obligation that requires payment.

There are two basic reasons for voluntarily paying for the notice period. First, if you tell the employee to leave without pay after notice has been given, this action could turn a voluntary resignation into an involuntary termination and potentially make the employee eligible for state unemployment compensation for any period of interrupted employment. Second, and arguably more importantly, a termination action without pay sends a negative message to the rest of your workforce, i.e., if you give notice as requested, you may be penalized. As a result, morale will be hurt, and you likely will not receive many advance notices of future resignations.

(Download a free Termination of Employment model policy including HR best practices and legal background.)

Instead, if you compensate the employee for the notice period, your action should prevent questions about eligibility for unemployment benefits or implied contract violations and encourage other employees to give notice in the future.

Regards,

Robin Thomas, J.D.
Personnel Policy Service, Inc.

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22 Comments

  1. 22 mark niel 11 Dec
    i start work in august 15 2014 then i resign December 12 2014 in that case can i get 13 month pay in that situation?
  2. 21 priyaranjan ojha 10 Dec
    Hi sir i priyaranjan ojha i m voluntary resign my job ,then company is demanding to me some money .because i m not given to notice period ,sir tell me what to do?
  3. 20 sumone 06 Dec
    Hi friends, I joined a company three months back. they have not given any appointment letter. due to personal reason i left my job. I sent resignation letter thru mail and hard copy submitted and after 7 days from resignation letter , i stopped going to office. Now the company has not given my salary. If i go legally will i get my salary. As per the rule what is the period i need to serve notice period . Note: i have not received any offer letter
  4. 19 Rajesh 02 Dec
    Dear All, I need your valuable inputs over the following matter - Can any company ask to pay the salary transferred in his a/c after resigned, while they didn't cleared Full & Final. They send a computation sheet stated few PL's ( while actual PL were much high according to last salary slip) Kindly suggest further, as that company send a registered AD stated to pay the amount with in 15 days. Thanks - Rajesh
  5. 18 Waseem 02 Dec
    company a and given a months notice,after one week I was asked to leave the building and given a letter stating that I'm not being dismissed and I will be paid and that I'm being asked to leave to aid new managed structure and at the end of the month they deducted my whole salary as a purchase that I haven't made,I have requested the reason for this and they haven't replied yet.I have been in contact with he HR lady and she says that she cannot understand why this was done,the accountant says that the CEO had requested her to do so for stock hat went missing after I was asked to leave.Kindly advise
  6. 17 Neema 26 Nov
    Please help,, my company has been terminate to me ,they do not provide me any kind of information about same , can i ask them for one month salary to pay me in leu of termination . also i do not have any kind of appointment letter,at the time of joining they only gave me the offer letter.
  7. 16 pratiksha 18 Nov
    I worked for around 1yr 7 months in a company. At May 2013, company asked me to leave. I didn't apply for any resignations prior. They just call me and ask me to leave. I got my salary for May, but i got salary for June too. I resign on May 30, then how come i get my june month's salary without any working ?
  8. 15 Rahul 28 Oct
    I am working in X company who has vendor Y and who has client Z. I gave 2 weeks notice even when the agreements does not mention. X and Y says they have an agreement that I should give month notice or there is penalty of $2k. I am on H1 so X did not give me proper letter and he is saying he would take this money from me. Is there anything that I can do?Thanks!
  9. 14 Ana 24 Oct
    I worked for a company from June 16 to October 9, sent the resignation letter on September 23 communicating I would be working until October 9. That day I received my regular check. Should I receive any additional money?. I was offered benefits , 401 k and health insurance which I never received
  10. 13 Meena Kumari 20 Oct
    Hi, I was working as a Team leader for Last ten years in a Company. My husband resigend his job 2 years earlier. Just two weeks before i was on my Duty they called me and told, we heard your husband doing the same business like us. they had the information 6 months earlier, They requested me to stay back in the company, But now all the sudden they agreed to pay me one month salary and asked me to go. After ten years of service in the company they did not show any professionalism, was just sent home. The releaving letter they told will be sent it throgh some one. They showed a personal revenage for no fault of mine. How do i proceed further, A month salary is paid to me, without going to job.
  11. 12 parneet 06 Oct
    I was working in security. Last week my company said..we are removing you from site but we don't have anything else to offer. So next day I resigned. Now they are holding my pay and said we will pay on Oct. 24. Which is full month from my resignation. I don't have job till now and have to pay my rent. They ditched me. They committed that it will be base plus site wage..but I always got 11 dollars. They hired me for rotation and made me work overnight for 1 and half month and later said..now we don't have anything to offer. They also charged me 400 dollar for uniform and later said it's your and you can keep it. Am so mad and want to take action against them. Please reply that what to do. Am not Canadian citizen and Or. But student with valid SIN number.
  12. 11 rushali 17 Sep
    Dear Lisa, Hope you have been given the appointment letter,please check the points mentioned in it accordingly in reference to the termination.If you are in notice period of 1 month you are eligible to get payed according to what you draw the regular salary every month. And if you do not wish to complete that notice period you have to leave in lieu of your salary.
  13. 10 Slim 03 Sep
    i have just recently resigned and im serving a 1 week notice as per employment act cause Ive been here less than 6 months, my question is and please advise, what is the salary payment that im entitled to?
  14. 9 lisa 25 Aug
    our worker has given his letter to resign and I need to know how to work out his pay is it the months salary and another month salary plus leave pay .pro rata or how do I work it out please assist me in this matter.
  15. 8 faiyaz 18 Aug
    I was working with private company from last 1 & half month I resigned yesterday it self now they say they will don't give me salary what I have to legally? ? Please have me with above inquiries. ..
  16. 7 Mirasol Villareal 10 Aug
    I am a new HR associate, one of our employees was resigned and she's asking for a quit pay and a tenure rewards amounting of 2 month basic salary for 15 yrs. in service as per our company policy. However, she resigned after her 15 yrs. in service, is she still get her tenure reward or not? thank you.
  17. 6 Shely 30 Jul
    Salary coming after resign
  18. 5 kiran 30 Jul
    Hi i had quit my job without giving prior notice a month ago but some amount of money as credited in my account by my company kindly could you explain it.
  19. 4 Radebe Jan Jabulani 02 Jul
    I resigned on the 22 may 2014 but now its 2 July 2014 and I didnt get any money when must I get my money 
  20. 3 vikas singh 02 Sep
    I am working with a private chain of hospitals and i have resigned on 12/8/2013 as a notice period of 30 days according to company protocols and last date will 13/9/2013 . I got my salary in account on 7th date of the month but now HR is saying that my all salary will come through cheque after 45 days of the last working day.          But I was thinking that my salary of aug month should come in account on the fix date and the salary of rest of the days from 1/9/13 to 13/9/13 will come through cheque . Plz tell me Is it the standard rule of HR. Give me suggesation
  21. 2 Informed 01 Jul
    Like the author states, some states consider the 2 week notice requirement to be an implied contract which means that they the company would end up paying more than 2 weeks of "unworked pay" if they didn't comply.  It's called, contructive discharge.  but I'm going to assume "Monk" isn't from the Human Resource World.
  22. 1 Monk 22 Apr

    What idiot is going to pay for 2 weeks of un-worked time? To keep "good relations"??? Kiss my ass, that's why there are so many lazy people in this country now. 

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