If a company ends the contract before the two-week notice period is up, is the employee still entitled to full pay? State labor laws differ on notice-period compensation. In most cases, employers are only required to pay employees for the days they work, not the days they intended to work. The exception to this rule is when employment contracts, policy manuals, or collective bargaining agreements contain specific clauses on resignation pay and notice.
Voluntary Employer Payments
Even in the absence of a formal agreement, some employers pay for the two-week notice period when they end the worker’s contract early. They may feel like they need to end the contract to protect sensitive company information, but they don’t want to negatively affect staff morale. Dismissal of a worker without pay before the notice period ends could give employees the impression that management is cruel. It doesn’t foster employee loyalty. When a company terminates a contract before the notice period ends, they turn a voluntary resignation into an involuntary termination. That could be another factor encouraging companies to keep employees through their notice period. When they’re involuntarily terminated, an employee becomes entitled to state unemployment compensation (as long as there weren’t any causes for termination beyond the resignation letter). The company’s unemployment insurance reserve account and rates may see adverse effects as a result.
State Law and Resignation Pay
State law is another reason a company may pay the worker through the notice period. This occurs when an employer stipulates that employees must give notice of resignation. This is often through clauses in their job contracts. In such cases, some state laws require the company to pay the worker through the notice period.
At-Will Contracts & Extended Notice Periods
Most states in the US follow an at-will hiring policy. This means that companies can fire employees without cause and without notice (though some states observe exceptions to at-will hiring policy). The policy works both ways, and employees can leave a company at any time without providing a reason or notice. The absence of contractual regulations absolves a company from the need to pay a worker who has handed in their resignation letter. Similarly, when a contract stipulates a notice period (usually two weeks), but the worker offers to extend the notice duration, the company is under no obligation to agree to the extended timeline.
Quitting Without Notice
Workers considering their exit could have witnessed management’s negative reactions to resignations in the past. For that reason, they may hold back their intentions, altogether. When they’re ready to leave, they’ll simply quit that day. Withholding notice means they will likely receive full pay up to the last day of work, but there are drawbacks to this method. In the same way that employers consider the effects of dismissing staff without notice and pay, workers should consider the ramifications of quitting without notice. If a future employer hears about the incident, they may not see the full picture that includes harsh management—they’ll simply assume you’re the type of worker who quits without notice. In well-networked fields and industries, a wrong step like this could have a lasting effect on your reputation.
The Bottom Line
Whether an employee works through the notice period or not, they are entitled to pay they’ve already earned. This includes commissions and accrued vacation pay. If they’ve given notice, they should be able to collect their final paycheck on their last day of work or soon thereafter.
