Exit interviews are a very useful tool and can provide valuable information to an employer to help avoid future claims and improve employee retention. They are also the perfect time to provide a departing employee with their final paycheck in compliance with state timelines.
The structure of exit interviews will differ depending on whether the separation results from a voluntary (i.e., the employee resigns) or involuntary (i.e., the employee is fired or laid off) termination. When an employee resigns voluntarily, an exit interview is an opportunity to obtain feedback from the departing employee on things the employer is doing well and things that can be improved upon. Additionally, an exit interview is a good time to confirm the reason the employee is leaving and assess whether the employee is harboring any grievances against the employer regarding unfair or illegal treatment. Taking time to meet with the employee and discuss these things during the exit interview can help avoid possible future claims from the departing employee.
In the case of an involuntary termination, an exit interview is not only an opportunity to tell the employee that their employment is ending, but also to provide them with a clear and concise explanation of the reason(s) why. These reasons should also be clearly documented in the employee’s personnel file, along with any information or other documentation supporting the decision to terminate the person’s employment (e.g., conversations with the employee regarding performance concerns, performance improvement plans, etc.).
It is important that the reasons given at the time of termination match the reasons the employer would provide if they were defending a wrongful termination or other employment-related claim. This does not mean that the employer needs to provide every detail and consideration that went into the decision to terminate the employee. Instead, it is a good idea to keep the meeting brief and to the point, while still clearly and accurately communicating the basis for the separation.
There can be strict timelines regarding final paychecks. In some states, employers are required to pay an employee that is involuntarily terminated by the end of the next business day. The final paycheck generally cannot be mailed unless the employee requests it. Most of the time this means an employer should have the employee’s final paycheck ready prior to the termination meeting.
The requirements are often different when an employee voluntarily terminates employment, depending on how much notice is given. Failure to pay an employee their final paycheck on time can result in the employer owing the employee penalty wages. However, if an employee provides written notice to the employer that they are still owed wages, employers may be able to limit the amount of penalty wages owed.
Missy Oakley is an attorney with Barran Liebman LLP. She represents employers in a variety of employment matters. Becky Zuschlag is a law clerk with Barran Liebman LLP. She partners with attorneys in employment, labor relations and benefits practices.