Termination Checklist for California Employers

This termination checklist is a general guide and may not cover all specific requirements for your business. It’s essential to consult with an attorney to ensure compliance with California labor laws.

Reason for Termination

• Clearly defined reason: Is the reason for termination documented and aligned with company policies?
• Policy violation: If the termination is due to a policy violation, please ensure the policy is in writing, distributed, and acknowledged by the employee.
• Decision-makers: Document who was involved in the decision-making process.
• Documentation: If the termination is “for cause,” gather and maintain all relevant documentation in the employee’s personnel file.

Final Pay and Accounting

• Final paycheck: Calculate and prepare the employee’s final paycheck, including accrued vacation time. The final check should be given to (i.e., handed to) the employee at the time of termination (unless the employee is remote or wants direct deposit).
• Commissions and bonuses: Determine any outstanding commissions, bonuses, or expense reimbursements.
• Payment method: If the employee does not want a check, document the request for direct deposit.
• Direct deposit authorization: If using direct deposit, obtain a new authorization form after termination.
• Expense reimbursement: Collect all necessary expense reimbursement forms from the employee.

Company Property and Passwords

• Property retrieval: Obtain all company property, including uniforms, keys, and equipment.
• Password reset: Reset all passwords associated with the employee’s company access.
• Password list: Document any passwords the employee had access to.

Severance Agreement Considerations

• Severance offer: Determine if offering a severance package in exchange for a release is appropriate.
• Age discrimination: If the employee is 40 or older, consider age discrimination laws and the required revocation period for severance payments.

Final Notices

• Required notices: Provide the employee with necessary notices, such as:
  • Notice to Employee as to Change in Relationship
  • For Your Benefit (Form DE 2320)
  • COBRA and Cal-COBRA notices
  • HIPP Notice to Terminating Employee (Form DHCS-9061)
• Insurance updates: Notify insurance providers of the employee’s termination.

Employee Files

• File security: Ensure the employee’s personnel file, wage, and time records are securely stored and saved.
• Retention: Follow applicable record retention laws for employment-related documents.

Additional Considerations:

• Documentation: Maintain thorough documentation throughout the termination process to protect your business.
• Legal advice: Consult with an attorney to ensure compliance with California labor laws and to address any specific concerns.
• Employee relations: Consider the impact of the termination on other employees and take steps to maintain a positive work environment.
• Internal Disclosure Policy: The employer should establish guidelines for providing information about former employees to safeguard against potential legal issues, including defamation and privacy violations.
  Examples include basic information such as the former employee’s job title and employment dates. Upon the former employee’s written authorization, the company may disclose their final pay rate.
  
  Before sharing any sensitive information, whether externally or internally, managers and staff should consult with the legal department to ensure compliance with applicable privacy laws.
  The reasons for an employee’s departure should be kept confidential unless there is a legitimate business need to disclose them.