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One of your employees is leaving your company. Aside from posting a job description, scheduling an exit interview, and managing a smooth transition, it’s likely you’ll need to provide them with some essential paperwork when they move on: a separation notice.
It’s a helpful tool to make sure everything is spelled out as your employee departs — including why they are leaving — and, in some states, this is required.
Even if the separation is voluntary and with no hard feelings, it’s a good idea for employers to have a paper trail to address any future questions about unemployment claims or even prevent lawsuits down the road. In 2022, the US Equal Employment Opportunity Commission reported 73,485 job discrimination charges. Furthermore, according to Coverwallet, the average settlement for a wrongful termination lawsuit is between $40,000 and $45,000, depending on whether the case reaches trial or is settled out of court.
In this employer’s guide, we’ll take a look at the requirements in your state, plus what you’ll want to include in a separation notice — and why separation documentation is a best practice for small business HR even if your state doesn’t require it.
What is a separation notice?
Simply put, a separation notice is documentation provided to employees when the employment relationship ends. It’s issued by the employer when:
- An employee is terminated or laid off
- An employee leaves the company voluntarily
- An employee retires
Now that we have summed up what a separation notice is, let’s talk about what’s typically included in one.
What do you write in a separation notice?
Depending on the state, requirements for what’s included in separation paperwork can vary. Generally, it includes:
- The employee’s personal details, such as name, address, and Social Security number
- The employee’s length of employment with the company
- The reason for the separation
- Whether or not the employee retired
Employers may also include information about severance pay or benefits continuation in the separation information for an employee, but take time to consult an employment law expert to be certain you’ve got everything covered.
In Georgia, for example, employers are required to provide departing employees with a notice that includes the reason for separation, dates of employment, and wage information when they leave the company. Some states also require employers to provide terminated employees with information about unemployment benefits in their state.
Now that we better understand what a separation notice is and what they include, let’s find out which states require employers to provide departing employees with this paperwork.
What states require a separation notice?
There are currently 21 states that require some type of documentation or paperwork when an employee separates from a company. These include:
| State | What’s should employers know? | Is there a form? |
| Alabama | Employers are required to notify employees about the availability of unemployment benefits upon separation. | More information from the state of Alabma |
| Alaska | Employers must provide notice about unemployment benefits availability to each separated employee as soon as practical within seven days from the last day the employee performed work for compensation. | Alaska separation form |
| Arkansas | Employers must send notice of the potential availability of unemployment benefits to employees upon separation from employment and choose how they deliver the notice. | Employer forms |
| Arizona | Employers must provide pamphlet, UIB-1015A. | Form UIB-1015A |
| California | For Your Benefit pamphlet must be given to employees no later than the effective date of termination, along with immediate written notice to employees of a change in the employment relationship. | For Your Benefit pamphlet |
| Colorado | Employers are required to provide employees upon separation from employment a notice that informs them of the availability of unemployment insurance. | CO separation form |
| Connecticut | Employers must provide employees with Form UC-61, Unemployment Separation Notice immediately upon termination of employment. | Form UC-61 -Unemployment Separation Notice |
| Georgia | A separation notice must be given to the employee immediately upon separation. | Form DOL Form 800 |
| Illinois | A pamphlet What Every Worker Should Know About Unemployment Insurance is required if workers are laid off for seven days or more or separated from payroll for any reason. | “What Every Worker Should Know About Unemployment Insurance” |
| Iowa | When a worker leaves or refuses employment for a reason that an employer believes disqualifies the individual from receiving unemployment insurance benefits, employers can notify Iowa Workforce Development. | This online form is used to report an employee separation or refusal to return to work. |
| Louisiana | Employers must provide Form LWC-77 within three days after the date on which the separation from service occurs, or three days after the worker’s separation from employment. | Form LWC-77 |
| Maryland | Employers are required to notify separated employees that unemployment benefits may be available. | Employee notification form |
| Massachusetts | The How to File a Claim for Unemployment Insurance Benefits brochure must be provided to the employee. | Brochure download |
| Michigan | Employers must provide Form UIA-1711 to the employee. | Form UIA-1711 |
| Missouri | Employers are required to provide a copy of Form M-INF-288-5 to departing employees. | Form M-INF-288-5-AI |
| Pennsylvania | PA employers must notify separating employees of the availability of unemployment compensation with Form UC-1609. | Form UC-1609 |
| Nevada | If an employee is laid off or leaves their job, they must be provided with a NUCS-4139 form. | Form NUCS-4139 |
| New Jersey | The Instructions for Claiming Unemployment Benefits, New Jersey Department of Labor and Workforce Development Division of Unemployment Insurance Form – BC 10 must be given to the employee. | Form BC-10 |
| Rhode Island | Employers must provide employees with a notice that unemployment benefits are available upon separation. | RI provides this sample language to help companies provide this information. |
| South Carolina | All employers must give separating employees a Notice of the Availability of Unemployment Insurance Benefits and options to provide are in-person, via email, postal mail, or text message. | Information provided by SC Department of Employment and Workforce |
| Tennessee | Separation Notice LB-0489 must be given to the employee within 24 hours of separation. | Form LB-0489 |
Does an employer have to give a separation notice?
While not all states require employers to provide separation paperwork, many choose to do so because there are some benefits for both the employer and employee.
For employers:
First, it’s a good source of documentation to refer to if there are any disputes in the future about the reasons for separation or termination. Second, using a standard method or template for separation notices keeps the process of termination consistent and ensures that they are handled uniformly. There are several templates available online to find one that works for your business. Handling terminations or employee turnover can be disruptive among your other employees, so anything to assure them that everyone is being dealt with fairly can help maintain their morale.
For employees:
With a formal separation notification, employees also have a paper trail for their files. In some states, a separation notice is required for employees to apply for and qualify for unemployment benefits. Because these forms typically include length of employment and reasons for job separation, they can help state agencies when determining an individual’s eligibility for unemployment insurance.
Read this next
Once you finish getting familiar with each state’s final paycheck laws, we have another resource you might find useful. Our article on the minimum wage per state includes a simple chart so you can quickly see the rate where you do business.
Providing a separation notice can be a wise move
Whether your state requires it or not, many HR experts consider it a best practice to have employee separations in writing, as it benefits both parties involved. With all the challenges that can come with terminations, layoffs, or employee turnover, this step can help ease the transition for you, the employee, and the rest of your team.
In addition, this creates a paper trail in the event you need to reference documentation down the road. As your businesses grows, best of luck navigating the rules surrounding separation notices and structuring your company’s policy to stay compliant.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.