Perform an employee termination when an employee no longer works for your organization. There can be many reasons for termination, including termination due to a layoff, a voluntary resignation, or a retirement. Whatever the reason is for termination, you must change the employee’s file to reflect the termination.
Points to Consider Before Terminating an Employee
- If you useTime Off, the system automatically closes all attendance plans in which the employee is currently enrolled. Additionally, when the system closes a plan,Time Off accrues all available time for each attendance plan.
- If you terminate an employee who is on an FMLA leave, you should first return the employee from leave of absence before you perform the termination. When you return the employee from leave of absence, you can charge the FMLA leave time to the employee’s vacation and illness plans.
To Terminate an Employee
Tip: Before you begin the termination task, gather all the necessary information to enter for the employee. Some information relates to which benefits your employer offers the employee after termination, the employee’s eligibility for rehire, whether you need to create an on demand check, and the reason for the termination.
- Select Employees > Tasks > Terminate Employee.
- Find the employee you want to terminate. The steps page opens and lists the steps for terminating an employee.
- Select the steps you want to complete. Complete each step now or schedule steps for yourself or another user to do later. Note that Exit Interview is a required step.
- Click to start moving through the steps.
Steps for terminating an employee
Exit Interview
Use the Exit Interview page to enter data pertaining to the employee's termination from the company including the termination date, type and reason, the employee's eligibility for rehire, and COBRA benefits, if any. If you select for COBRA benefits, you terminate the employee without insurance benefits.
Sage HRMS updates employee benefits and then prompts you to enter expiration dates for Non-COBRA benefits and COBRA benefits. This page is identical to the Termination page.
- If you also use Time Off, all attendance plans the employee is enrolled in are automatically suspended.
- If you are also using Sage HRMS, the system updates employee benefits and asks you to enter expiration dates for Non-COBRA and COBRA benefits. Accept the defaults or enter new dates
- Does your organization need to pay the employee you are terminating? If you change an employee's status to Terminated, a message dialog box will open asking if you want to terminate the employee from payroll processing.
- If you click , the Payroll Status field on the Current Pay tab of the Current Pay page is automatically set to Terminated, excluding the employee from payroll processing.
- If you click , the employee will be included in the next payroll. It is important to note that the coverage end dates for the employee's benefit/savings plans are changed to the termination date, and in turn, the end date for the payroll deductions associated with the plans is also updated. The end date must be on or after the check date in order for the deduction to be included in the payroll. It is important to review the employee's coverage end dates during the termination task and then update as necessary.
Note: If you change the COBRA Benefits expiration date, make sure it is a date after the end of the termination month. If it is a date that occurs before the end of the termination month, the employee will not be included when you run COBRA notification letters for employees whose coverage expires at the end of the termination month. This is because the COBRA benefit would already have expired before the termination month ended.
Review Benefits
Remember that the end dates for the employee's benefit deductions are changed to the termination date. If you want the employee to be included in the next payroll, the end date must be on or after the check date in order for the deduction to be included in the payroll. It is important to review the employee's coverage end dates during the termination task and then update as necessary.
The Review Benefits step enables you to review the savings plans and insurance plans in which the employee participates before you terminate the employee. The Savings Benefits page is the first page in the Review Benefits step.
When you finish working with the employee's savings plans, click to access the Insurance Benefits page. This page lists all the insurance plans in which the employee participates.
When you finish reviewing and updating the employee's insurance plans, click to move to the next step.