HR Management & Compliance

Skipping Notice Period? Don’t Let Door Hit You on the Way Out

Every HR manager has had the moment where you’re trying to decide whether to waive a notice period for a terminating employee. You also may have had a trickle of doubt about the repercussions waiving the notice period could create. Read on to learn more.

firing
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Here are three circumstances we frequently see:

Difficult employees. Essentially, you’ve been hoping to terminate these employees for ages because they’re poor performers and a general pain. You are ready for them to be out the door. Although you might be doing a happy dance in your head, avoid giving them any reason to think waiving the notice period is some type of retaliatory action.

Great employees. You’re sad to see them go. During the notice period, however, they pull a Jekyll and Hyde. Now you need to move them out before the notice period is done.

Never-ending notice periods. “I’ll be quitting when…,” the employee says, then naming some future event such as when “I sell my house, find a new job, or potentially locate the lost city of El Dorado.” The problem here is you need a certain date so you can do appropriate planning and hire to fill the position.

It’s fairly common to see the never-ending notice period when someone is thinking about retirement, but you must be careful to avoid giving the impression you’re treating the employee differently because of his age. Retiring employees should be treated the same as any of the other never-ending-notice-period situations.

Employer Discretion

Termination sections in many employment manuals discuss the necessity for notice, including policies limiting the payout of accrued but unused paid time off (PTO) if notice isn’t given. Be sure your policies let employees know that you, in your sole discretion, may waive the notice period.

Including “employer discretion” in your policy is useful in case you need to waive the notice. The statement gives employees fair warning that while they must give notice, it won’t always be “worked.”

Performance Changes

There are significant issues to consider when you’re managing employees who are within their notice period. For example, employee morale may fall if the departing individual slows down or doesn’t create the same quality work product in the notice period, putting pressure on coworkers. Insubordination also may become an issue.

Conflicts can arise during customer interactions if employees at the end of their jobs are less willing to put their all into customer service.

Access to Data

Legal issues often arise when departing employees have access to personally identifiable information from clients, hospitals, or other covered entities under the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health (HITECH) Act. The Office for Civil Rights (OCR), which enforces the two laws, is very concerned about terminated employees’ access to protected data and records during their notice periods. Multiple fines have been issued when access continues past what the OCR considers to be reasonable.

Although a longer notice period might be necessary for things such as patient transfers or cross-training for essential functions, the sooner you can get an employee out the door and cut off their access to highly confidential information, the more likely you will be in compliance with the HIPPA and HITECH Act requirements and expectations and other statutes.

Additionally, allowing employees to have continued, open-ended access to your intellectual property can create significant concerns, particularly if they’re heading to a competitor.

PTO During Notice Period

In Iowa, your termination policy can prohibit employees from using accrued PTO during any notice period. PTO needs to be preapproved and is subject to business necessity and your needs, except in some instances for Family and Medical Leave Act (FMLA) and Americans with Disabilities Act (ADA) purposes. You can decline to grant the time off during a notice period if you need employees to cross-train or perform specific functions before leaving.

Most of you have experienced employees who give notice and then basically never return, using up accrued sick leave and other PTO to your company’s detriment. If your policy states you don’t pay out PTO upon termination, you should consult with your employment attorney about how to structure and implement it. While the approach is acceptable in Iowa, it could create issues with the U.S. Department of Labor (DOL) under certain circumstances.

Job Service

If notice is waived and employees are unemployed for a substantive period, they may be able to obtain job service benefits from Iowa Workforce Development (IWD).

Job service has been somewhat erratic in decisions relating to whether employees can get unemployment benefits during a break between employers. The shorter the notice period, certainly the less likely that the benefits would apply. In some instances, however, the IWD has granted the benefits, particularly for longer or nonspecific notice periods.

Jo Ellen Whitney is an attorney with the Davis Brown Law Firm in Des Moines, Iowa. You can reach her at joellenwhitney@davisbrownlaw.com.