Ending Your Relationship With Your Ex-Employees

When an employee leaves, your relationship is not quite finished. As a matter of fact, you still have a number of issues to face:

Final wages. When an employment relationship is terminated, complying with the state and federal rules in getting a final paycheck to the employee promptly and with the proper deductions and information is important.
Accrued vacation. Determining whether or not you have to pay an ex-employee for accrued vacation.
Benefits for fired employees. Under federal and state laws, employers have certain legal obligations to employees they fire with respect to continuing health coverage, unemployment insurance benefits, and vested retirement benefits.
Unemployment compensation. Understanding which ex-employees may be eligible for unemployment compensation.
COBRA. Determining whether you are subject to COBRA, a law that requires employers to offer individuals, who would otherwise lose health care benefits, the option of continuing to have group health care plan coverage. In addition, you should determine if you are subject to the complex state laws that require the continuation of health benefits.
Providing employment references/verification. Dealing with prospective employers that contact you for information about ex-employees. Determining how to comply with state laws that may require you to provide references to former employees.
Disputing unemployment compensation claims. Contesting unemployment claims if you're not sure whether your ex-employee is eligible for unemployment benefits.