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Employee Terminations
Details
The employee termination wizard enables processing the
end of an individual's employment with a company.
Prior to completing the termination, shortcuts to check list
items, asset details, and COBRA
details, are provided.
For final pay, review the employee Master and details, as
explained in the Determining
Final Pay section of
this topic.
Check List Items
On the termination wizard, click on the Check
List Items button to view a pop-up of outstanding available hours
and unreturned assets, if any.
Results of the Termination Wizard
A terminated employee's Master record remains for post-employment
processing activities and record-keeping requirements. The employee
status changes to reflect the new employment status from termination
processing.
Completing the Termination Wizard yields
the following results.
- Adds a Termination Detail. The
termination process creates a termination detail (Human Resources) record
with the termination date from the termination wizard.
- Adds a COBRA Detail. The
termination process creates an Employee COBRA Detail as part of finalizing
the termination when Monthly COBRA costs are defined and the employee
has a COBRA-eligible benefit.
- Updates the Payroll
Tab within Employee Time Master. The termination process POPULATES
Employment Status, Termination Code,
Termination Date, and Re-Hirable
indicator.
- Updates the Employment
Tab within Employee Master.
Values entered and recorded on the termination wizard populate
fields on the Employment tab: Termination Code,
Termination Date, Employment
Status (determines current and future payroll entry and payroll
processing status), and the Re-Hirable
checkbox (determines whether the system permits the individual to be re-hired
at a later date).
- Update the Compensation
Tab within Employee Master.
Values entered and recorded on the termination wizard populate
the Pay Group field on the Compensation
tab.
- Updates any
Auto Pay Details. The Payroll
Termination Date entered populates the End
Date on the employee's current, active Employee Auto Pay Detail
records. Whether an employee's auto pays are created for a payroll depends
on whether the payroll calendar is marked as Scheduled, whether the employee's
current Employment Status is set to allow payroll processing, and the
effective and termination dates for the auto pays.
- Where the End Date for the Auto Pay is prior to
the begin date of the final pay period, then the auto pay won't be created
for the terminated employee.
- Where the End Date is after the final pay period
or is not yet recorded, auto pays can be created. Other conditions required
to allow auto pays to create are a Begin Date before or during the pay
period, having the payroll calendar marked as Scheduled, and the employee
having a current Employee Status that is defined to allow payroll processing.
- Updates any Benefit
Details.
- Benefit
Termination Date. The
Benefit Termination Date entered
during the termination populates as the Coverage Termination Date on the
Employee Benefits Detail.
- Payroll
Termination Date. The
Payroll Termination Date entered
during the termination populates as the Payroll Termination Date on the
Employee Benefits Detail.
- Updates any Deduction
Details. The Payroll Termination Date entered during
the termination populates the End Date
on the employee's current, active Deduction Detail records.
- Updates the Net
Pay Details for direct deposits.
The Payroll Termination Date
entered during the termination populates
the Termination Date on the employee's
current Net Pay Detail records.
- The Termination
Wizard doesn't populate the End Date on the Employee Tax Detail screen
with the date of the termination. Any existing end dates on tax details
are unmodified.
COBRA Compliance
From the Report Navigator, your organization
can generate a COBRA Notification and Election
Letter and should then deliver the letter according to regulatory
requirements.
Final Pay
Return to the employee Master and Detail
screens prior to the final payroll check creation and verify the information.
Complete data entry, time entry, and pay final pay as applicable.
- Auto
Pays. Where Auto Pay records were created
prior to the termination, the Auto Pay records are included in Pay Entry,
and must be removed or adjusted as part of pay entry. Where the End Date for the Auto Pay is prior to
the begin date of the final pay period, then the auto pay won't be created
for the terminated employee. However, where the End Date was not yet recorded
or is after the final pay period, auto pays are created.
- Guarantee
Net Pay. To prevent a guarantee net pay
from processing during the terminated employee's
final payroll run, de-select the Active
indicator and/or enter an End Date
with a date prior to the final payroll’s
beginning payroll date.
Note:
The Employee
Termination process doesn't populate the End
Date field in the Effective Dates section of any Guarantee
Net Pay Detail records.
- Benefits Details and Final Pay. The benefit Termination
Date populates from the Benefit
End date entered during the termination process. Refer to the COBRA Detail screen, and complete all
required records for the employee.
Note:
The Employee Termination process doesn't create pay records for outstanding
accrual balances.
Payroll personnel can access the Benefits
Details screen to see any outstanding balances of accrual benefits such
as vacation or other PTO plans. Depending on your company's
policies, payroll can use the balance of the accrual hours to determine
the terminated employee's
final pay. The Available Hours
field represents the balance of accrual hours. Accruals are calculated
before hours are paid in the payroll process, and so the hours may increase
to include the current accrual, depending upon the Termination Date on
the Benefits Detail record and the payroll period.
- Deductions
and Final Pay.
Are any deductions in arrears?
The Termination Wizard
populates the End Date on the
Deductions Detail screen. Review outstanding balances, any arrears, and
the process payroll numbers. Adjust the terminated employee's deductions
details and pay entry accordingly.
- First on the
Employee Deductions Detail screen,
verify any outstanding balances for deductions, such as repayment of a
company loan, by comparing the Deduction
Limit Amount (which is the total amount to be deducted) to the
Adjusted Limit (which is the
remaining balance as of the last payroll run).
Explanation:
The Deduction Amount field is
the amount to be deducted each payroll period. To deduct the remaining
balance, edit the Employee Deductions
Detail record, enter the Deduction
Amount to equal the remaining balance, enter an End
Date of the payroll period’s end date, and save the Deductions
Detail record.
- Second, review
the Arrears Processing fields.
Since the deduction will be limited to the Maximum
Amount of arrearage for this deduction, an adjustment to the Deduction Amount field may be needed
to withhold all of the arrears from the final payroll check. Explanation:
The Arrears Processing field will display
the current balance of arrears remaining for this deduction. The Maximum Amount to process existing
arrears field will limit the amount of arrears that can be deducted in
one Payroll period. The last field on the arrears processing line is the
year to date balance of arrears for this deduction.
- Third, verify
that the correct Process Payroll X fields in the Processing Information
section are selected as necessary.
Explanation:
If the
final payroll is one where the deduction does not normally process, selecting
another Process Payroll checkbox may be necessary. The Process
Payroll X checkboxes determine which payroll(s) of the month include
the deduction. Include the payroll containing the final pay of the terminated
employee where arrears or an outstanding balance should be processed.
For instance, if the deduction was defined to process for only the first
payroll of the month and if a terminated employee's
final pay was recorded for the second payroll of the month, the deduction
would not process as part of the final pay.
- Earnings
Detail and Final Pay. Where the employee
is owed the difference between the Earning
Limit Amount (total amount of this earning to be earned by the
employee) and the Adjusted Limit
amount (amount the employee has earned for this earning as of the last
payroll), edit the Earning Amount
field and enter the remaining amount.
Note:
The Employee
Termination process doesn't populate the End
Date field for the Employee Earnings Detail records for the terminated
employee.
- To prevent payment
of an earning, enter an End Date
prior to the beginning payroll period date of the final payroll run for
the terminated employee.
OR
- To allow payment
of an earning, verify that the End Date
for the Earnings Detail is after the ending payroll period date of the
final payroll run for the terminated employee.
- Net
Pay Detail and Final Pay.
Note:
Termination
doesn't end a Net Pay Detail.
Should the net pay distribution
be changed to a printed check?
The organization's policies may require a
final payroll check instead of a direct deposit. The date of payment may
need to be before the next regularly scheduled pay run. If the organization
allows the terminated employee to choose how the final pay is disbursed,
the Employee Net Pay Details may need to be edited.
To stop a particular net pay disbursement
from processing, edit that Employee Net Pay Detail, and enter an End Date prior to the pay period. Where
the net pay amount or percentage is less than 100% of the total net payroll
amount, more than one record may need to be edited.
Time Entry for a Terminated Employee’s Final
Pay
To help keep employees who are ineligible for pay from being
paid:
-
Wizards that create
Auto Pays skip auto pays for any Employee Status that is set to suspend
payroll processing.
- Online detailed
pay entry blocks access to adding, editing, or deleting records for employees
with statuses that suspend payroll processing.
It is possible to adjust the employee's status on the Employee
Master to allow the payment of a final check, and then to adjust it to
a different status after the final payroll.
During the final payroll processing for the terminated employee,
a time entry record should be entered and verified to pay the employee
according to your organization's policies. For organizations that pay
accumulated paid time off hours at termination, add a pay entry record
to pay the available hours, and include the additional accrual for the
current period, if appropriate.
When a final pay check is required on the employee's last
day, create a manual check for the terminated employee's final pay.