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Stephanie Ramsey

By: Stephanie Ramsey

HR Reality Check: HR Case Study #6


Scenario: ABC Funeral Home, owned by Jim and Jane Smith, is a funeral home considered to be the market leader in a Midwestern town with a population of approximately 300,000. Part of its approach to maintaining market share is its high quality of family services fostered primarily through its experienced and qualified staff. ABC Funeral Home pays its employees well and offers competitive benefits.

They live in a state that recognizes at-will employment. Finding quality employees is  challenging for everyone in the area. Recently, one of ABC Funeral Home’s senior funeral directors gave notice indicating that he would be joining another firm in the area. His resignation indicated that he would stay with the firm another 30 days.

Jim accepted his resignation, but he was concerned about his senior employee stealing confidential and proprietary information, so he told the employee to leave that day. Jim immediately had him return all employer-owned equipment and pack his personal items before leaving the facility. The employee was offended by Jim’s decision but left quietly.

ABC Funeral Home mailed a check to the funeral director to include those days worked in the most recent payroll period prior to his notice as well as all unused accrued vacation days within the time required by the state. However, the next week the terminated funeral director contacted the funeral home wanting to know why his final paycheck did not include payment for the full 30 days that he had been willing to work as part of his resignation.

Does ABC Funeral Home owe the funeral director money?

What are the rules? There are no federal rules that apply to this situation. However, each state does have different rules as far as paying terminated employees. For example, in Oklahoma the employer must pay the employee’s wages in full, less offsets, at the next regularly designated payday for the pay period in which work was performed.

In Nevada, when an employer discharges an employee, the wages and compensation earned and unpaid at the time of discharge become due and payable immediately. However, when an employee resigns or quits, the wages and compensation earned and unpaid at the time of resignation or quitting must be paid no later than the day on which the employee would have regularly been paid the wages or compensation, or seven days after the employee resigns or quits, whichever is earlier.

In this particular situation, the employee gave notice he was leaving but then was discharged immediately. So in this case the employee was a terminated/

discharged employee in terms of determining how his final pay is calculated. It is important to note that no state requires you to pay an employee for time that is not actually worked outside of benefits that the employer decides to offer employees such as vacation/sick leave/personal leave and other such benefits.

Did the employer make any mistakes?  Not necessarily. However, the employer (Jim) could have avoided the employee’s phone call to the funeral home the next week by telling him the day he was asked to leave what his final paycheck would include.

Resolution of the issue: Jim immediately consulted his attorney who was familiar with employment law in his state to determine if there was an issue that needed to be addressed. That conversation put Jim’s mind at ease that he did not owe the terminated employee any additional monies. A letter was sent to the terminated employee that explained what was included in the final paycheck as well as an explanation as to why he was not due any outstanding amounts.

Preventive measures: An employee handbook is beneficial in this situation. An employee handbook can reinforce that employment is at-will with ABC Funeral Home. There are other valuable policies that can be included as well. For example, a termination policy could be included that provides employees a brief guideline into the termination process and what to expect. A vacation policy could outline whether or not unused accrued vacation days are paid upon termination. An employee handbook is a simple tool that gives employers a foundation on which to stand when addressing complicated situations. •

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