Use This Checklist When an Employee Resigns
Seeing an employee leave can be difficult. This step-by-step employee resignation checklist helps HR teams and managers navigate the process efficiently, reduce risk and maintain a positive employee experience.
Employee resignation is a fact of life for businesses. Staff may leave to pursue new opportunities, pursue education goals or retire after decades at work. Seeing employees go, however, isn't as simple as goodbye and good luck. Organizations must complete specific tasks to ensure regulatory compliance, reduce security risks and transition existing workloads.
Use this checklist to guide your organization through a smooth employee transition.
Key terms to know
Before diving in, it's worth defining four key terms: resignation, exit, separation and offboarding.
Resignation: Resignation is voluntary. Employees declare their intent to leave the organization and typically provide a notice period.
Exit and separation: Exit and separation refer to employees leaving the organization. It may be by choice, or due to layoffs or budget cuts.
Offboarding: Offboarding is the inverse of onboarding. During this process, employees return badges and IDs along with employer-owned devices. Employees are provided with their W-2 forms and final paychecks, and businesses often conduct an exit interview to learn more about why an employee is leaving.
The employee separation checklist
Administrative tasks
Obtain a resignation letter
Ask the resigning employee to sign a resignation letter. This serves as a record that the employee left voluntarily and provides the effective date. Keep the resignation letter in the employee's personnel file. If you can't obtain a resignation letter, document the date and the reasons for the separation, and keep that record in the employee's personnel file.
Transfer responsibilities and knowledge
Meet with the employee and their supervisor to determine the status of current projects. Create a plan to reassign the employee's duties, document critical work processes and, if time permits, train coworkers on key responsibilities.
Provide benefits information
If the employee is enrolled in group health insurance sponsored by your company, separation may entitle the employee to health insurance continuation (COBRA), which triggers certain notice requirements. Work with your health insurance provider to ensure compliance. If the employee participates in a company retirement plan, provide clear information on their post-employment options, such as cashing out, rolling over to another plan or maintaining the account with the current provider.
Verify mailing address
Make sure you have the correct address for sending the departing employee's Form W-2 and other pertinent information in the future. Ask the employee to verify their current address and to notify you if they have a change in address.
ADP has HR and payroll packages that can fit a business of any size, and can grow with you. Learn more.
Compliance-related tasks
Furnish state-required forms and notices
Many states require employers to provide a separation notice that includes the reason and date of the employee’s departure. Some states require this notice to go directly to the state unemployment agency, while others provide it to the employee.
Additional requirements may include:
Written information about unemployment insurance benefits
Unemployment insurance pamphlets
Notices regarding other state-mandated benefits
Always check your state-specific requirements to ensure compliance.
Note: Employees who resign are generally eligible for unemployment benefits only if they quit for "good cause," which varies by state.
Comply with final pay laws
Under federal law, final pay is due by the next regular payday, but many state laws have stricter deadlines. For example, in California, when an employee resigns without prior notice, employers must provide final pay within 72 hours. However, if the employee provides at least 72 hours of prior notice of their intention to resign, final pay is due on the employee's last day. Additionally, depending on your state, you may be required to include accrued, unused vacation and paid time off (PTO) in the employee's final pay. Check your state law to ensure compliance and keep a record of when you provided the employee with their final pay.
Under federal law, final pay must be issued by the next regular payday. Many states have stricter deadlines, so it’s important to check local regulations. For example, in California:
If an employee resigns without prior notice, final pay is due within 72 hours.
If the employee gives at least 72 hours’ notice, final pay is due on the last day of employment.
Additional considerations:
Some states require payment of accrued, unused vacation or PTO.
Document when final pay is issued to ensure compliance.
Ensure return of company property
Before an employee’s last day, collect all company-issued items, including:
Uniforms and ID badges
Cell phones and laptops
Building keys and access cards
Use a receipt of company property or similar form to track company-issued property that has been returned. Additionally, take the necessary steps to disable building codes and access to computers, digital platforms the company uses and confidential data.
For remote workers:
Revoke cloud and network access and remove users from federated sign-on frameworks.
Facilitate the return of any employer-owned devices such as laptops and mobile phones.
While you can ask remote workers to return these items in person, it's often faster to provide shipping or pickup services.
Note: Employers are prohibited from withholding an employee's final paycheck because of unreturned property. Federal and state laws place restrictions on an employer's ability to make payroll deductions for unreturned property.
Operational tasks
Notify key staff and contacts
Prepare a list of the staff, key clients and contacts that should be aware of the employee's impending departure. Explain who will be handling their work responsibilities and identify a contact who can address any questions.
Conduct an exit interview
Turnover can be costly, and exit interviews are one way to find out why employees are leaving. For example, ADP research found that 15% of employees believe they need to quit their current job to advance their careers. Others may leave due to communication, pay issues or simply a desire for new challenges.
Collecting this feedback provides actionable insights for your organization. For example:
If exiting employees report having had challenges with onboarding, businesses can review and improve early training processes.
If staff cite limited advancement opportunities, organizations might reconsider internal recruitment and promotion strategies.
Avoid making promises
While it may be difficult to see a good employee go, avoid statements like, "you will always have a job with us," which could be interpreted as a promise of future employment. Business conditions can change, and skills may evolve, so maintaining flexibility in employment decisions is essential.
Instead of improvising during departures:
Follow the employee exit checklist to document the process thoroughly.
Ensure operational compliance to help reduce legal or HR risks.
Capture insights about your workplace culture to inform retention strategies.
Next steps for a smooth transition
A structured resignation process helps protect your business, safeguard data and maintain employee morale. By following this checklist, organizations can transition employees smoothly, help to ensure operational continuity and gain valuable insights into workplace culture.
ADP has HR and payroll packages that can fit a business of any size, and can grow with you. Learn more.
A previous version of this article was originally published as an "ADP HR Tip of the Week" which is a communication created for ADP's small business clients.
