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Is Employer Obligated to Pay for Two Weeks after Notice if Employer Requests Employee Leave Now?

Q: Our organization generally requests that employees give two-weeks’ notice of resignation. If an employee resigns with two-weeks’ notice and we tell the employee to leave prior to the end of the two-week period, are we obligated to pay the employee for the full two weeks?

A: You may not be required to pay for the two-weeks notice period, but should consider doing so for employee morale reasons. Most employers request or require that employees give advance written notice of their intention to resign so that an orderly transition may be made. The amount of advance notification usually depends on the importance of the position. However, requiring employees to give notice of their resignations may, in some states, create an implied contract obligating the employer to give an equal amount of notice before terminating an employee. For this reason, the Editors suggest requesting, but not requiring, notice from terminating employees. In the scenario described above, since notice is only requested, a contract requiring the payment for the two-weeks notice period probably has not been created.

Most employers pay for the notice period, however, even if they do not have a contract requiring the payment. Employers may choose to do this when they want an employee to stop working immediately because the employee is in a sensitive position, such as one having access to highly confidential information or essential production equipment, and the employer is concerned about reduced loyalty. If the employer simply tells the employee to leave after giving notice, it may turn a voluntary termination into an involuntary termination, making the employee eligible for state unemployment compensation for that period of time. More importantly, the employer may send a negative message to the rest of its workforce, i.e., if you give notice as requested, you may be terminated immediately. As a result, the employer will not receive notice of terminations in the future. Accordingly, the Editors suggest compensating the employee for the notice period in order to ensure that there is no question about eligibility for unemployment benefits and to encourage other employees to give notice in the future. For further information on termination issues, see Chapter 211, Termination of Employment.

The Editors’ responses in the HR AnswerlineSM and this newsletter are not intended as legal advice. Subscribers are encouraged to seek appropriate legal and other professional advice.

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