Issues for employers to consider when employees depart
Employees in the U.S. are increasingly mobile. In 2013, people are far less likely to spend their entire careers with one company than 50 years ago. Business owners often find employee turnovers disrupt their operations while they try to cover the departing employee’s workload. Focusing on the impact to their companies may distract business owners from the legal issues that may arise when an employee leaves a position. Not being aware of these issues can lead to penalties for a business. Louisiana business owners should be aware of some of the laws governing final paychecks, health benefits and retirement benefits of departing employees.
One of the most pressing employment law matters that arises when employees leave a position deals with final paychecks. Employers need to issue departing employees their final paychecks in a timely manner. Louisiana state law requires employers to give employees their final paychecks on either the employer’s next scheduled pay date or 15 days from the employee’s final day of work, whichever comes first. Employers may either mail the check to the employee or pay the employee in the manner the employer used when the employee worked at the company, such as direct deposit.
Louisiana state law specifies that payment for vacation time should be included in the final paycheck if both of the following are true:
- The employee is eligible for vacation time with pay and has accrued such time.
- The employee has not taken his or her accrued time or otherwise received compensation for the time.
Health insurance benefits
Another employment law matter with which business owners should be familiar concerns health insurance benefits. The Consolidated Omnibus Budget Reconciliation Act provides those who work at companies with 20 or more employees and participated in employer-provided health insurance programs the opportunity to continue coverage under those plans at their own expense even after they leave employment. Employers need to inform employees of their rights under COBRA in writing. Employees then have 60 days to decide whether to take advantage of continuing coverage. Employees may continue the coverage for 18 months after they leave their positions.
Employers should provide information about retirement benefits to employees when they leave their positions, including an overview of their retirement plan details and individual statements of the contents of the employees’ accounts. Employers should also explain the laws governing when employees may collect their benefits without incurring penalties and what types of benefits may be rolled over into future employers’ retirement benefits plans or individual retirement accounts.
Business owners have enough to concern themselves with while running their companies without trying to master the law, as well. It is wise for business owners to seek the assistance of a skilled business law attorney to help them make sure that they are complying with applicable laws. If you have questions about running a business, speak with an experienced business law attorney who can offer you guidance on how to proceed.