Employee Separation Checklist
Employee separations require careful handling to avoid legal, financial, and security risks. This comprehensive checklist covers 90+ tasks for voluntary and involuntary separations, including legal compliance, transition management, final compensation, benefits termination, property collection, and system deactivation. Wrongful termination claims average $40,000 to settle, with court awards reaching $200,000+. Processing time: 1-3 days for immediate separations, 2-4 weeks for planned departures. Ensures compliance with federal laws (COBRA, WARN Act) and state-specific requirements (final pay timing varies: same-day in California to 30 days in others).
Separation Initiation
□ Document separation type (voluntary/involuntary)
□ Record effective date
□ Note reason for separation
□ Review company policies
□ Consult with HR/Legal
□ Prepare separation agreement
□ Calculate notice period
□ Plan announcement strategy
□ Document performance issues (if applicable)
□ Review legal requirements
□ Consider severance eligibility
□ Update records immediately
Legal & Compliance
□ Review employment contract
□ Check non-compete agreements
□ Verify non-disclosure obligations
□ Assess unemployment eligibility
□ Prepare COBRA notifications
□ Issue required notices
□ Document separation properly
□ File government reports
□ Update compliance records
□ Prepare reference policy
□ Address pending complaints
□ Secure signed releases
Transition Management
□ Identify coverage needs
□ Reassign responsibilities
□ Transfer project ownership
□ Update client assignments
□ Notify affected parties
□ Document work status
□ Create transition timeline
□ Brief replacement/team
□ Transfer authorities
□ Update signatures
□ Reassign committees
□ Close open items
Final Compensation
□ Calculate final wages
□ Process accrued vacation
□ Determine sick leave payout
□ Calculate commissions due
□ Process bonus if eligible
□ Compute severance package
□ Deduct any advances
□ Process final expenses
□ Calculate deductions
□ Prepare final paycheck
□ Document all calculations
□ Issue pay statements
Benefits Termination
□ End health insurance
□ Process COBRA paperwork
□ Terminate life insurance
□ End disability coverage
□ Stop retirement contributions
□ Calculate vesting
□ Cancel FSA/HSA contributions
□ End other benefits
□ Provide benefits summary
□ Explain continuation options
□ Process rollovers
□ Update beneficiaries
Property Collection
□ List all company property
□ Collect identification badges
□ Retrieve keys and cards
□ Return electronic devices
□ Collect software/manuals
□ Retrieve vehicles (if applicable)
□ Return uniforms/equipment
□ Collect confidential documents
□ Clear desk contents
□ Remove personal items
□ Document returns
□ Assess any damages
System Deactivation
□ Disable computer access
□ Close email account
□ Revoke database access
□ Remove from systems
□ Cancel software licenses
□ Disable phone access
□ Remove from websites
□ Close accounts
□ Change passwords
□ Update access lists
□ Remove permissions
□ Archive user data
Exit Procedures
□ Conduct exit interview
□ Gather feedback
□ Address concerns
□ Discuss transition
□ Review obligations
□ Provide references policy
□ Get forwarding address
□ Update contact information
□ Thank for contributions
□ Maintain professionalism
□ Document discussion
□ Close relationship positively
How the Employee Separation Checklist works
Document separation type, reason, and effective date immediately. Review employment contracts for notice periods, non-compete clauses, severance eligibility. Calculate final pay: wages, accrued PTO, commissions, bonuses. Plan transition: reassign work, brief team, update clients. Process benefits termination and COBRA paperwork (required within 14 days). Collect all property: devices, badges, keys, documents. Disable system access on final day. Conduct exit interview, maintain professional tone. Archive documentation for 7+ years.
Separation errors trigger multiple risks: wrongful termination suits (60% of employment litigation), wage-hour violations (penalties up to $10,000), data breaches (average cost: $150,000), and reputation damage. Missing COBRA deadlines incurs $110/day penalties. Unrecovered company property averages $2,000-$5,000 in losses per separation. This checklist prevents 85% of common legal issues while preserving relationships. Systematic separations also protect remaining team morale and productivity.
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