Employee Gives Two Weeks Notice: Do We Have to Pay?

Q An employee recently put in her two weeks’ notice, but her manager went ahead and removed her from the schedule. Are we obligated to pay her for the time she was scheduled to work in those two weeks?

quitUnknown ObjectA In general, you are not required to pay an employee for time not worked. That includes time during the employee’s two weeks’ notice period. However, there are several situations or conditions that should be considered.

Many employers have policies in their handbooks stating employees are to provide two weeks’ notice of resignation. The notice period is to give the employer sufficient time to find a replacement. Employees are sometimes under the impression that two weeks’ notice is required by law. Neither federal nor South Carolina law requires that two weeks’ notice be given, but both the employer and the employee may be contractually bound by a written policy implemented by the employer. Accordingly, it is important to review your policy and make sure it fits your company’s needs.

If your policy states that employees are required to provide two weeks’ notice prior to leaving the company and that they will be paid during that time, then the company should follow the policy and pay employees, even if it removes them from the schedule or tells them that they do not have to work the notice period. On the other hand, if your policy states that the company is not required to pay employees during the entire notice period, then the company will be required to pay for only hours actually worked. The common practice is for a policy to state something to the effect that two weeks’ notice is “preferred” or “requested” and be silent on the matter of pay. In those situations, the company is not legally obligated to pay for time not worked during the two-week period. However, any time actually spent working must be paid.

You also need to consider situations involving exempt employees. While one of the legally recognized exceptions for deductions from salary or exempt workers’ pay is for working a partial week during their final workweek, the exception is meant to apply when it is their decision to work only part of the final workweek. If they intend and are willing to work the entire workweek and the employer permits them to work only part of the week, then the employer is responsible for their salary for the whole workweek. By not paying an exempt employee for the entire workweek, the employer may run afoul of the Fair Labor Standards Act (FLSA).

Another consideration is unemployment benefits. If you require two weeks’ notice and then remove an employee from the schedule or tell her that she is not going to be allowed to work, you may be turning her resignation into a termination. Of course, there may be extenuating circumstances when that is appropriate, but be careful because such an action may result in the employee being entitled to unemployment benefits.

Lastly, requiring two weeks’ notice and not allowing an employee to work the notice period or not compensating her for the time may give the company a bad reputation. That may discourage employees from providing notice in the future, thereby defeating the intent of the policy. Absent extenuating circumstances, the better practice may be to treat employees fairly. That will develop a loyal and dedicated workforce, which will ultimately help in hiring and retention.

In summary, it is advisable to develop a termination policy that fits your company’s needs. The policy should state what you expect from departing employees. Points to include are notice, accrued paid time off, return of equipment, and similar matters that may need to be addressed upon separation of employment. Remember that letting employees know what is expected of them also signals what is expected of you as an employer. So do what is right, and it will pay for itself in the long run.

Reggie Gay, an attorney with McNair Law Firm, P.A. and editor South Carolina Employment Law Letter, may be contacted at rgay@mcnair.net.

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