When Employment is Terminated

Whether your employee is voluntarily terminating their employment, you have a need to reduce your workforce, or you are firing for cause, there are certain expectations and legal obligations each employer must understand.

No advance notice of termination is required by either the employer or employee.  If advance resignation notice is given by the employee, you can choose to accept, reject, or modify it.  If you reject the resignation notice, you are not obligated to pay for the time not worked by the employee, since the duty to pay ends on the date the work separation becomes effective.

Frequently, employers struggle with how much detail to provide when an employee is terminated. Most often, there is no obligations to explain why you are letting an employee go. The only exception is if an employee is terminated as the result of a background check covered done under the Fair Credit Reporting Act, you must explain to the employee that the discharge is the result of the unfavorable report, give the employee a copy of the report, and furnish contact information for the firm that issued the report.

Although Texas law does not require written notice of termination or layoff, a simple, straightforward, and unambiguous written notice of work separation can help prevent employees from later claiming that they are owed additional pay beyond the work separation date.  This written notice documents the separation date and disputes any future allegation that employee did not know they had been laid off or discharged, and they allegedly continued to “work from home”, call on customers, or engage in e-mail correspondence with various parties as part of their supposed duties. 

To reduce the potential for a wage claim, employers should, as applicable,
  1. make a final wage payment within six calendar days for a layoff or discharge, or by the next regularly scheduled payday for a resignation. Unless you have a signed statement from the employee calculating any payroll deductions other than for income tax, Social Security, and Medicare, you may not make any deductions from the final paycheck. This includes deductions for things such as uniforms, unreturned company equipment, or repayment of loans made to the employee. Any deductions made must not decrease the final paycheck to less than minimum wage for the hours actually worked.
  2. if the employee had health insurance, the employer should give written notice under Texas and federal COBRA laws;
  3. in case of a mass layoff, the employer should provide a WARN notice to affected employees and the state;
  4. if the employee was subject to a wage garnishment order for child support or alimony, the employer must notify the New Hire division of the Attorney General’s office within seven days of the work separation; and
  5. for employees who are under child support orders, the employer must notify the
Attorney General’s office within seven calendar days of the effective date of work separation, and in case of certain lump-sum payments  of severance pay, bonuses, commissions, accrued leave, or similar post-termination payments, any child support or alimony amounts must be taken out of such payments.  The Texas Attorney General’s Office may be notified at

(https://portal.cs.oag.state.tx.us/wps/portal/EmployerHome)

If you are facing issues in the workplace, please schedule an appointment with one of the attorneys at Waldron & Schneider to discuss these concerns.  

The legal information in this blog entry is not intended to be a substitute for seeking personalized legal advice from an attorney licensed to practice in your jurisdiction.  Further, nothing contained in this article is intended to create an attorney-client relationship with any reader.  This article and website are made available by Waldron & Schneider for educational purposes only and to give basic information and a general understanding of the law, not to provide specific legal advice. By using this website you understand that there is no attorney client relationship between you and Waldron & Schneider. The article and website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. For more information or questions you can contact us and one of our attorneys will be in touch soon.
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