Separation of Employment Policy

Purpose

To give managers a consistent framework for handling employee separations — terminations, resignations, retirements, and job eliminations — so that appropriate action is taken and documented, the organization is protected, and applicable laws and policies are followed.

Definitions

• Separation / Termination — any end of employment, whether voluntary or involuntary.
• Last Day Worked (LDW) — the employee's last day of actual work (or paid vacation).
• Termination Date — the last day of pay, which may differ from the LDW (for example, if severance or salary continuation extends pay).
• Resignation — a voluntary separation initiated by the employee.
• Retirement — separation of an employee eligible for retirement benefits.
• Discharge — an involuntary separation initiated by the employer for cause.
• Suspension — a temporary cessation of active employment, with or without pay.

Policy

When executing a separation or job elimination, management must:

• Review for disparate impact. Before finalizing involuntary terminations or job eliminations — especially in a group or reorganization — review them with HR / EEO to avoid a disparate impact on any protected group.
• Check WARN Act notice obligations. Before any plant closing, mass layoff, or large reorganization, HR / Legal must determine whether the federal WARN Act or a state "mini-WARN" law applies. Federal WARN generally requires employers with 100+ employees to give 60 days' advance written notice before a plant closing affecting 50+ employees at a site, or a mass layoff affecting 50–499 employees if that is at least 33% of the site's active workforce (or 500+ employees regardless of percentage). Several states have stricter mini-WARN laws with lower thresholds and longer notice periods (for example, New York requires 90 days' notice from employers with 50+ full-time employees, and California's Cal-WARN covers employers with 75+ employees and has no percentage-of-workforce threshold). Confirm applicability with counsel before finalizing any reduction in force.
• Review benefits and pension entitlement with HR / Benefits, including any vesting or eligibility an employee is close to reaching, before a position is eliminated.
• Consider outplacement with HR, and when it should begin.
• Comply with leave and disability law. Separations connected to an extended absence, illness, or injury must comply with the FMLA, the ADA (including leave as a reasonable accommodation), workers' compensation, and applicable state law. Do not treat a protected leave as a basis for separation — confirm the approach with HR or counsel first.

Roles and responsibilities

• Immediate supervisor — conducts the separation and records all actions on the separation / offboarding checklist.
• Human Resources — advises the manager on the appropriate steps and oversees the process.
• Legal, Benefits, and Finance/Payroll — handle specific elements (release agreements, benefit termination/conversion, final pay) as needed.

Procedures

1. Document every step using the Employee Separation & Offboarding Checklist, including return of company property; termination or conversion of benefit coverage (and repayment of any tuition reimbursement received within the look-back period); and the handling of confidential, proprietary, or financial information.
2. Prepare for the separation meeting — confirm the reason and supporting documentation, the final-pay calculation, benefits and COBRA information, and any release agreement, in coordination with HR.
3. Conduct the meeting professionally and privately; deliver final pay in accordance with state-law timing (which varies and may require payment on the last day).
4. Complete offboarding — deactivate access, recover property, and file the documentation.

Legal and risk notes (best practice)

• Employment is generally at will, but document a legitimate, non-discriminatory, well-supported reason for any involuntary separation.
• Never separate an employee for protected activity (a complaint, protected leave, or participation in an investigation). High-risk terminations should be reviewed with HR or counsel.
• Provide required notices (e.g., COBRA, state separation notices) and meet state-specific final-pay and accrued-vacation-payout rules.
• Consider a separation/release agreement for higher-risk separations, drafted by counsel.
• If a release will waive age-discrimination claims (ADEA) for an employee 40 or older, it must satisfy the Older Workers Benefit Protection Act (OWBPA). Among other requirements, the release must be written in plain language, specifically reference ADEA rights, advise the employee in writing to consult an attorney, be supported by consideration beyond what the employee is already owed, give the employee 21 days to consider the offer (45 days for a group termination or exit-incentive program, restarting if the offer materially changes), and allow a 7-day revocation period after signing (this period cannot be waived or shortened). For a group termination or exit-incentive program, the employer must also disclose in writing the job titles and ages of everyone in the affected decisional unit, both those selected and those not selected for the program. Have counsel prepare or review any release used in a group reduction in force.