Terminating an employee

Use the Assign Leave of Absence task when an employee will no longer work for your employer. The reasons for termination include a layoff, voluntary resignation, or retirement.

Points to consider before terminating an employee

  • If you also use Time Off, all attendance plans the employee is enrolled in are automatically suspended and 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.

Tip: Before you begin the termination task, gather all the necessary information to enter for the employee, such as the termination date, reason, benefits the employer offers the employee after termination (COBRA), the employee’s eligibility for rehire, and whether an on demand check is needed.

To terminate an employee:

  1. Select Employees > Tasks > Terminate Employee.
  2. From the table of employees, select the employee who is to be terminated, and then click OK.

  3. On the Steps for Terminate Employee Task page, select the Complete check boxes for the steps you want to complete now. Select the Schedule check boxes for the steps to schedule for yourself or another user to do later.

    Note: The Exit Interview is a required step so the Complete check box is automatically selected.

  4. Click OK to start moving through the steps you selected to complete now.

Exit Interview step

Use the two tabs on the Exit Interview page to enter data pertaining to the employee's termination from the company, including the termination date, type, reason, eligibility for rehire, COBRA benefits, and forwarding address.

  1. Enter information on the Termination Data and Forwarding Address tabs.
  2. Click Continue or OK.

  3. If you also use Sage HRMS Payroll, the employer may need to pay the employee being terminated. A message box appears asking if you want to terminate the employee from payroll processing.

    • If you click Yes, the Payroll Status on the Current Pay tab of the Current Pay page is automatically set to Terminated, excluding the employee from payroll processing.
    • If you click No, the employee will be included in the next payroll.

  4. In the Expiration Date window, enter the date to terminate non-COBRA benefits and click OK.

    Note: The coverage end dates for the employee's benefit savings plans are changed to the termination date—and the end date for payroll deductions associated with the plans are also updated. The end date must be on or after the check date in order for the deduction to be included in the payroll.

Tabs on the Exit Interview page

Items on the tab

 

Item

Description

Termination Date

Enter the date the employee is to be terminated. Initially, this is today's date.

Employee Type

Displays the type of employee (such as part-time, full-time, temporary, or seasonal) but you can change the type.

Termination Type

Select the type of termination: Involuntary, Uncontrollable, or Voluntary.

Termination Reason

Select the reason for the termination from the list.

Tip: If the reason is not in the list, add a new reason code. Select Add New Code, enter the new code and its description, and click OK.

COBRA Code

Select whether the employee is entitled to COBRA benefits or the COBRA status:

Rehire

Select Yes if the employee is eligible to be rehired.

Notes

Enter any comments about the employee's termination.

Use this tab to enter the address where employee correspondence should be sent.

Note: If you make changes to the forwarding address, the Alternative Address is also updated in Sage HRMS.

Items on the tab

 

Item

Description

Street 1

Enter the employee’s street address to send employee correspondence.

Street 2

Enter the second line of the address, if needed.

City

Enter the employee’s home city.

State or Province

Select the employee’s State or Province.

ZIP /Postal Code

Enter the employee’s ZIP or postal code.

County

Enter the employee’s home county.

Country

Enter the employee’s home country.

Review Benefits step

The Review Benefits step enables you to review the benefit savings plans and insurance plans in which the employee participates and update the dates if necessary.

  1. Review the employee's savings plans on the Savings Benefits page, which contains a table of savings benefit plans for which the employee has enrolled. The expiration date of the plans should show the date you entered during the Exit Interview step.
  2. Click Continue to save your changes and continue.
  3. Review the plans on the employee's Insurance Benefits page, which contains a table of insurance benefit plans for which the employee has enrolled. The expiration date for non-COBRA benefits should show the date you entered during the Exit Interview step. If the employee is eligible for COBRA benefits, you may need to change the expiration date for those benefit plans.
  4. Click Continue to save your changes and finish.
  • If you want the employee to be included in the next payroll, the expiration date must be on or after the check date in order for the deduction to be included in the payroll.
  • If you change the COBRA Benefits expiration date, make sure it is a date after the end of the termination month. If the date 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 (because the COBRA benefits already expired before the termination month ended).