LABOR LAW
Reprinted with permission from CalChamber
My employee gave two weeks ’ notice that she is quitting , but I want to end her employment today . Will that turn her quit into a termination ? And if so , will it mean she can collect unemployment insurance even though she quit ? And do I have to pay her out for the two weeks ?
If an employee gives two weeks ’ notice that she is quitting and instead you end her employment earlier than notice period , you have turned a voluntary quit into a termination . Let ’ s look at how that will affect her unemployment insurance ( UI ) eligibility , and whether you must pay her out for the notice period she gave .
UI ELIGIBILITY
An employee who is terminated for “ misconduct ” is disqualified from receiving UI benefits . If you terminate an employee as a result of her having given notice to quit , she will not have been terminated by you for misconduct and thus would not be disqualified . In this situation , she will likely be eligible to collect benefits , which could in turn have a negative effect on your UI reserve account and cause your UI rates to go up .
If , however , you pay the employee for the full period of notice , then the Employment Development Department ( EDD ) still will consider the separation to be a voluntary quit for UI purposes . This is because by being paid out for the notice period , the employee has not suffered any loss of wages . According to EDD , for UI purposes , a voluntary quit becomes a termination only if the employee suffered a wage loss . ( Note that this discussion pertains only to UI eligibility , not whether the separation was a quit or a termination for other legal purposes , such as a wrongful termination lawsuit .)
In deciding whether to pay out the notice period even though you are terminating the employee , it is critical to first determine whether she would be eligible for UI even if EDD still considers it a voluntary quit . Remember that an employee who quits with good cause ( such as to relocate with his / her family to another state , or to take a substantially better job ) might be eligible to collect UI anyway . If that is the case , your turning the quit into a termination will make no difference in whether she will collect UI .
PAYING FOR NOTICE PERIOD
If you are an at-will employer and don ’ t require employees to give advance notice of quitting , then there is no legal obligation to pay out a notice period if you terminate the employee early . Note that the lack of a legal obligation to pay those wages does not change the UI eligibility discussed above .
However , it ’ s important to check your employee handbook or other company documents that might create a requirement for employees to give notice . It ’ s not unusual to find an employee handbook that states that employment is at will , meaning either party can end the relationship without notice , but then to find a policy in the same handbook asking that employees give two weeks notice if they are planning to quit . By requiring notice , you may be creating an obligation to allow the employee to work the two weeks or to be paid out for it . �
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