What's Required When You Terminate Employees in California?
As an employment attorney, I write this post as I'm dealing with many clients trying to handle their terminations in a legally compliant manner (not to mention as kindly and consciously as possible - which prevents lawsuits and bad karma). What most employers terminating employees in California miss are the numerous required notices and action steps they must take at or before the time of termination in order to comply with the law.
There are many forms, and I've laid them out below with links to the needed forms.
1) Give all the required forms at employee termination.These include info about unemployment or disability insurance, enrolling with Cal-COBRA, and a change in the employment relationship form. Also give the employee any forms regarding relevant retirement benefits, disability, or other programs that she's eligible for, currently enrolled in, or needs to enroll in. Specifically:
a) For employers with 20 or more employees, provide a Consolidated Omnibus Budget Reconciliation Act (COBRA) notice and election form to employees who are participating in the employer’s group health plan and to any of the terminating employee’s dependents on the plan.
b) Provide a Health Insurance Portability and Accountability Act (HIPAA) certificate of group health plan coverage to all terminated employees who are participating in the group health plan at the time of termination.
c) The Department of Health Care Services requires employers with 20 or more employees to provide the Health Insurance Premium Payment (HIPP) notice, DHCS 9061, to certain employees covered under the program.
d) If termination is due to a layoff or position elimination covered under the WARN Act, notices need to be sent out 60 days prior to termination.
California Employment Requirements
e) The California Employment Development Department (EDD) requires employers to provide their unemployment benefits pamphlet, For Your Benefit, DE 2320, to all discharged or laid off employees no later than the effective date of the discharge or layoff.
f) California Unemployment Insurance Code 1089 requires employers to give a written Notice to Employee as to Change in Relationship form to all discharged or laid off employees immediately upon termination.
g) Employers must notify any covered, terminated employees of their Cal-COBRA continuation rights. Cal-COBRA must be offered to both terminated employees of small employers (2-19 employees) and terminated employees covered under federal COBRA when their 18 months of federal COBRA coverage expires.
h) California Labor Code Section 2808(b) requires employers to provide to employees, upon termination, notification of all continuation, disability extension, and conversion coverage options under any employer-sponsored coverage for which the employee may remain eligible after employment terminates.
2) Don't forget to have the employee's entire paycheck ready to go at the moment that you terminate. This should include unused vacation, which is considered wages in California. (If the employee quits, you have 72 hours to give her a final paycheck.) It's not an excuse if the employee storms out - deliver it to her at a home address if need be, or deposit it into a bank account. Failure to pay the employee her final paycheck at the time of termination will result in hefty fines many times the amount owed.
And finally, all these forms can be confusing. If you do not have a firm understanding, this is where the Maier Law Group is here to help. Contact us for any questions you may have.