Transcript Termination Process Refresher

Termination Process
Refresher
Revised 09/10/12
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Termination Process Refresher
• When an employee terminates from the University, we
must provide the employee with a final paycheck and
terminate the employee’s job record.
– The final paycheck must include all remaining pay due to the
employee. This will include:
 Salary/hours worked/leave taken during the last pay period of work.
 Accumulated unused leave hours (sick leave is not paid out).
 Any other payments due in conjunction with the termination.
– The employee’s job record must be terminated in PeopleSoft to
ensure that:
 The employee does not continue to receive pay following the termination
date.
 The employee receives appropriate notifications regarding Benefits.
 Employee headcount is accurately reported for the University.
Revised 09/10/12
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Termination Process Refresher
• Notification of a termination is generally provided to an
administrator in the employee’s work unit.
• The administrator is responsible for:
– Confirming the details of the termination.
– Determining the final payments due, including leave payouts.
– Requesting the final paycheck and job record termination, by
submitting a Termination Webform to Payroll.
• Payroll is responsible for:
– Verifying the calculations provided on the Termination Webform
and producing the final check.
– Terminating the employee job record.
• Additional communications/arrangements regarding the
employee’s termination are generally handled by the
employee’s manager and/or HRM.
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Termination Process: Getting Started
• When you receive notification of a termination, determine
the following prior to starting the Termination Webform:
– Employee’s last day of work
 Last day of work must be a University work day (not a holiday)
– Appropriate action/reason code for the termination
 Consult with HRM/E&MS/HRG, as appropriate
– Planned leave hours for the employee, if any, prior to the
termination
 Instruct the employee to update his/her timecard in Axess
– Partial month vacation accruals due to the employee
– Delivery method and date for the final paycheck
 Final check can be mailed or held at Tresidder for will call
 Final check can be produced prior to the employee’s last day of work
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Calculating Partial Month Accruals
• Vacation is granted once monthly, following the payroll run
for the second pay period of the month.
• Any vacation that the employee has earned, but has not yet
been granted, must be calculated and included on the final
check.
• Vacation calculations differ by employee type:
– Non-Exempt & Bargaining Unit
 Receive vacation based upon regular hours worked and leave hours taken
– Exempt
 Receive a flat amount monthly, which is prorated by work day if the
employee does not work the entire month
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Calculating Vacation: NX & BU
• Review Axess Timecard to determine the regular hours worked
and leave hours taken by the employee for the period during
which they have not yet received their vacation grant.
• Determine the employee’s accrual rate based upon the STF
Service Date in PeopleSoft.
Leave Type/Employee Type
Vacation - Bargaining Unit
Vacation - Non-Exempt
Months
of Service
0-12
13-48
49-108
109-168
169+
0-12
13-48
49-108
109-168
169+
Years of
Service
0- 1
1- 4
4- 9
9 - 14
14 0- 1
1- 4
4- 9
9 - 14
14 -
Number of
Hours
0.03847
0.0577
0.06539
0.08462
0.09231
0.03847
0.0577
0.06539
0.08462
0.09231
Maximum
Accrued Per Hours *
Work Hour 360
Work Hour 360
Work Hour 360
Work Hour 480
Work Hour 480
Work Hour 200
Work Hour 300
Work Hour 320
Work Hour 320
Work Hour 320
* Prorated by FTE and Maximum Hours change based on the current year
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Calculating Vacation: NX & BU
• Example: A non-exempt employee with 5 years of service is
terminating on May 3rd. You found the following in his timecard:
– 160 regular work hours during April
– 8 vacation hours taken during April
– 16 regular work hours during May
• Vacation calculation: 184 hours * .06539 = 12.03 hours
Leave Type/Employee Type
Vacation - Non-Exempt
Months
of Service
0-12
13-48
49-108
109-168
169+
Years of
Service
0- 1
1- 4
4- 9
9 - 14
14 -
Number of
Hours
0.03847
0.0577
0.06539
0.08462
0.09231
Maximum
Accrued Per Hours *
Work Hour 200
Work Hour 300
Work Hour 320
Work Hour 320
Work Hour 320
* Prorated by FTE and Maximum Hours change based on the current year
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Calculating Vacation: EX
• Determine the employee’s accrual rate based upon the STF
Service Date in PeopleSoft.
• Verify the employee’s FTE in PeopleSoft and prorate the number
of monthly hours to be granted accordingly.
Leave Type/Employee Type
Vacation - Exempt
Months
of Service
0-12
13-108
109+
Years of
Service
0- 1
1- 9
9-
Number of
Hours *
10
13.33
16
Maximum
Accrued Per Hours *
Month
300
Month
320
Month
320
* Prorated by FTE and Maximum Hours change based on the current year
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Calculating Vacation: EX
• Example: An exempt employee with 5 years of service is
terminating on May 3rd. She is 100% FTE.
• Vacation Calculation:
– April: 13.33 hours
– May: (13.33 hours divided by 22 work days) * 2 days worked =
1.21 hours
– Total = 14.54 hours
Leave Type/Employee Type
Vacation - Exempt
Months
of Service
0-12
13-108
109+
Years of
Service
0- 1
1- 9
9-
Number of
Hours *
10
13.33
16
Maximum
Accrued Per Hours *
Month
300
Month
320
Month
320
*Prorated by FTE and Maximum Hours change based on the current year
Note: If the employee were 75% FTE, she would receive 10.90 hours (14.54 hours *.75%)
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Vacation Caps
• The University is currently in the process of reducing the
maximum vacation that an employee can accumulate.
• If a terminating employee is above the applicable cap:
– Do not calculate a partial month vacation accrual for the employee
as s/he is not eligible for vacation accruals while over the cap.
– Pay out all of the accumulated vacation balance, including the
amount over the current cap.
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Termination Payments:
Salaried Employees (EX & NX)
• On the Termination Webform, enter a payment row for
each of following, as appropriate:
– SAL: Semi-monthly salary, if the employee was active for the
entire pay period (Annual divided by 24 pay periods)
– SAL : Work hours and hourly rate for work hours if the employee
was active for only a portion of a pay period (Use STP if SAL has
already been used to pay the semi-monthly salary)
– VCS, SKS, PST and/or BDS: Leave time taken prior to the
employee’s last day of work
– VPO, PPO, BDO: Unused accumulated leave time to be paid out
– SEV: Severance, if the employee has been laid off
– STP: Pay in lieu of notice, if the employee has been involuntarily
terminated with no notice period (Pay semi-monthly salary)
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Termination Payments:
Salaried Employees (EX & NX)
• Example: A salaried employee is terminating on May 3rd.
–
–
–
–
–
SAL
STP
VCS
VPO
BDO
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$2,100.00 (for April 16 – 30)
16 hours @ $24.230769/hour (for May 2 – 3)
8 hours @ $24.230769/hour (Vacation day taken April 22)
154.3 hours @ $24.230769/hour
8 hours @ $24.230769/hour
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Termination Payments:
Hourly Employees (BU & Contingent)
• On the Termination Webform, enter a payment row for
each of following, as appropriate:
– 101 : Work hours and hourly rate for work hours (Pay with
premium earnings codes if Swing or Owl shift)
– VAC, SCK, PTO and/or BTH: Leave time taken prior to the
employee’s last day of work
– VPO, BDO: Unused accumulated leave time to be paid out (PTO is
not paid out for BU employees)
– SEV: Severance, if the employee has been laid off
– STP: Pay in lieu of notice, if the employee has been involuntarily
terminated with no notice period (Pay 80 hours)
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Termination Payments:
Hourly Employees (BU & Contingent)
• Example: A Bargaining Unit employee is terminating on May 3rd.
–
–
–
–
101
VAC
VPO
BDO
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88 hours @ $26.04/hour (for April 17 – May 3)
8 hours @ $26.04/hour (Vacation day taken April 16)
120.8 hours @ $26.04/hour
8 hours @ $26.04/hour
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Requesting the Final Check
• A final paycheck, including all remaining pay due, must be
furnished to an employee:
– By the last day of work if the employee resigns with at least 72
hours notice or if the termination is involuntary.
– Within 72 hours if the employee resigns without notice.
• The Termination Webform must be fully approved by 9am on
the day the final check is required.
– Termination checks may be requested earlier than the employee’s last
day of work. Please wait to submit the Webform until all details of the
termination have been confirmed.
• If the employee’s last day is between the last day of the pay
period and payday, Payroll must stop the employee’s regular
paycheck so all earnings can be included on the final check.
– Submit the Termination Webform by the PeopleSoft deadline for
the pay period to ensure that the regular paycheck can be stopped.
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Requesting the Final Check
• Payroll reviews the final check calculations and makes
adjustments as necessary to comply with University policy
and to ensure correct payment to the employee.
• Use the Remarks field on the Webform to note the details
of the termination, especially any unusual items.
– This is an additional point of verification to ensure that the final
check calculations are correct.
– If an involuntary termination requires special handling,
please submit a HelpSU ticket to Payroll for assistance.
– The check can be ordered prior to the termination date. Upon
request, Payroll can ‘hide’ the check from the employee view in
Axess.
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Understanding the Final Paycheck:
Benefit Deductions
• Employees are covered on benefits through the end of the
month containing their last day of work.
– Employee benefit deductions are taken from the final check to
cover any remaining premiums due for the month.
• Benefit premiums for a given month are taken from the
paychecks on the 7th and 22nd of that month.
– If the employee has not received a paycheck during the
month of termination, twice their normal benefit deductions
are taken from the termination check.
– If the employee has received a paycheck on the 7th, their
normal benefit deductions are taken.
– If the employee has received both the 7th and 22nd
paychecks, no benefit deductions are taken.
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Understanding the Final Paycheck:
Benefit Deductions
• Employees may elect to complete their healthcare
spending account commitment for the year by having the
remaining balance deducted from their final check.
– This option is not available for Dependent Care Spending
Accounts.
• To elect this option, the employee must complete the
Health Care FSA Continuation Form, which is available from
the Benefits website.
• Payroll must receive the Continuation Form prior to
processing the employee’s final check.
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Understanding the Final Paycheck:
Retirement Contributions
• Employee retirement contributions and employer match
are applied to the final check at the rate currently on file
for the employee.
• Retirement eligible earnings on the termination check
include:
– Salary/Hours/Leave Taken
– Leave Payouts
• Severance Pay is not retirement eligible.
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Understanding the Final Paycheck:
Taxation
• Salary/hours payments are taxed at the employee’s W4/DE-4 rate on file at the time of termination.
• Leave payouts and severance are taxed separately from
salary/hours. Payments are controlled for taxes with the
following guidelines:
– Payments less than $5,000: Taxed at W-4/DE-4 rate
– Payments of $5,000 or greater: Taxed at Supplemental Tax
Rate (25% federal, 6.6% state)
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Contingent to Regular Transitions
• If an employee is converting from a contingent position to a
regular position, a final check should not be requested.
• Submit a Termination Spreadsheet to request the
termination of the contingent position.
– Note in the email that the employee will be rehired as
regular staff, so the termination is expedited.
• Record hours for the contingent position in Axess Timecard
for payment with the next regular pay cycle.
– View timecard by ‘Range of Dates’ to see appropriate
timecard fields for each job.
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Termination Resources
• HROS (http://hros/peoplesoft/jobaids.html#termination)
– Termination Job Aids & Process Overview
– Termination Spreadsheet
• Fingate (http://fingate.stanford.edu/staff/payadmin/res_jobaid.html)
– Axess Timecard Leave Accrual Rates
– Payroll Earnings Codes
– Payroll Schedules and Deadlines
• HelpSU (http://helpsu.stanford.edu)
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