When Offering Resignation In lieu of Termination May Be Preferable

While termination is never easy for an employer, allowing “resignation in lieu of termination” can be preferable for all parties involved in some circumstances. Resignation allows employees to tell future job prospects that they left voluntarily and may insulate employers from potential legal risks.

Employers should consider some factors in determining whether allowing a voluntary resignation rather than termination is appropriate. Resignation may be a better alternative if a termination does not involve gross misconduct or a significant policy violation. For instance, termination for failure to meet productivity or performance standards may be an appropriate case for resignation as opposed to termination.

A resignation can also mitigate an employer’s legal exposure. Depending on some states’ laws, voluntary resignation may negate the employer’s responsibility for unemployment compensation benefits. In any case, employers should always treat voluntary resignations the same as terminations in terms of documentation. This step ensures consistency and reduces risk to the employer.

Additionally, when offering resignation as an option, employers should consider how to manage reference check requests concerning these individuals from potential employers in the future. Again, consistency in the employer’s response is critical to avoiding potential legal liability. Employers also should consider providing severance packages and termination agreements or releases as part of voluntary resignation procedures.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and H.R./employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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