Separation from Employment Guide 

The information provided in this guide is intended to assist a Payroll Coordinator to ensure that proper procedures are followed when an employee is discharged or resigns. Assistance is available for your separation payment-related questions from the Payroll Office.

  1. Before you start
  2. Policy and background
  3. Procedure for compliance
  4. Completing the AB2410 Payment time reporting worksheet
  5. Processing the payment
  6. Categories of separating employees
  7. Consequences for non-compliance
  8. Special situations
  9. Resources
  10. Where to get help

Appendix
Forms
Quick links to forms referenced in this guide are provided below.
 
Important Form Information:
Separation_Payment_AB2410.pdfSeparation_Payment_AB2410
Separation_Payment_AB2410.xlsSeparation_Payment_AB2410
Separation_Supplement_Payment_AB2410.pdfSeparation_Supplement_Payment_AB2410
Separation_Supplement_Payment_AB2410.xlsSeparation_Supplement_Payment_AB2410
Resources
Voluntary and Involuntary Termination Benefits_GASB47.ppsVoluntary and Involuntary Termination Benefits_GASB47
What to KnowFilter
Before you start

The information in this guide provides payroll policy and procedures to follow when an employee is separating from University employment.

  • A separation action occures when an employee separates from University employment.
  • The separation process is determined by the type of employee who is separating.
  • When an employee is discharged or resigns, the separating employee is paid for time worked and accrued vacation.
Policy and background

The University of California policy follows mandates set forth in the California Labor Code Assembly Bill 2410.  Final pay for separating employees is due and payable immediately and is subject to the 72-hour rule.

  • Employee resigns/quits/retires with notice (at least 72 hours): check is due to the employee on date of separation.
  • Employee resigns/quits without notice (less than 72 hours): check is due to the employee within 72 hours (business days).
  • Employee is discharged: check is due to the employee on date of separation.
Procedure for compliance

The key to success when an employee is separating is timely communication between the Unit Supervisors and the HR Teams.  The HR Teams are responsible for the thorough review of Time and Attendance Records.

HR Service Teams contact the Payroll Office for processing a Separation Payment AB2410 (PDF | Excel) request when final pay is due to the employee outside of regularly scheduled payroll processing dates.

  • Please make sure all hours submitted on the Separation Payment AB2410 (PDF | Excel) are reviewed for accuracy.
  • Most separations are planned events.  Please include the Payroll Office in this planning so that the final payment can be generated by the best method possible, except when otherwise noted.
  • A final paycheck may be issued through the AP Vendor check-write or through a regularly scheduled payroll compute.

The HR Service Team does not contact the Payroll Office when the final pay is due to the employee on a regularly scheduled payroll compute.

  • Process final pay in OPTRS using the regular payroll cycle.
  • The employee will receive final pay according to established pay disposition arrangements.  For example: process final pay in OTRS for an employee who is separating on Friday, June 30th and the scheduled payroll cycle results in Friday, June 30th pay day.
  • For more information about processing final pay in OPTRS, please refer to OTRS Manual/DOPE section/Separation from Employment.
Completing the AB2410 Payment time reporting worksheet
  • The Separation Payment AB2410 (PDF | Excel) details the hours or percentage of current time to be paid. 
  • The Separation Supplement Payment AB2410 (PDF | Excel) details hours or percentage adjustments or payments for late time. 
  • Time to be paid includes:
Processing the payment

HR Service Teams email the Payroll Office at AB2410@ucsc.edu to notify Payroll of the Separation Payment AB2410 (PDF | Excel) request.  The Payroll Office will respond within two business hours* that the notification has been received and will consult with the unit at that time as to the proper method of payment and to determine how the forms will be sent to the Payroll Office (fax 9-3702, email attachment or hand-delivered). 

* Payroll Office hours are M-F 9am-3pm; closed noon-1pm

After receiving instruction from the Payroll Office, the unit prepares the Separation Payment AB2410 (PDF | Excel).  The form is then delivered to the Payroll Office as previously discussed.  The Payroll Office must analyze the request and take prompt action to prevent issuing incorrect payments through a regularly scheduled payroll compute.  Late requests put the University at risk for fines and penalties.  The HR Service Teams must contact the Payroll Office when the request will be late, in order to make special arrangements.

  • The Payroll Office will manually calculate the final payment, including mandatory deductions and contributions.
  • Transactions will be prepared to charge the departmental expenditure account and to update the employee's earnings records with the final payment information.
  • The Payroll Office will determine the appropriate method to generate the payment (AP Vendor check-write, exception to the AP Vendor check-write or through a regularly scheduled payroll compute).
  • The Payroll Office will notify the HR Service Team when a check is generated and is, either ready for pick-up or ready for Campus Mail delivery.

The HR Service Team processes the direct deposit of final wages when a separating employee has an existing direct deposit account.

  • A direct deposit authorization remains in effect for final wages when an employee is discharged or quits.
  • Separating employees will receive their final wage payment on a regularly scheduled pay date when they have existing direct deposit accounts.
  • Separating employees will be paid by paper-check, using existing procedures, when final wages payments are to be dispersed on a date other than a regularly scheduled pay date.

The Payroll Office adheres to the AP Vendor check-write process.

  • The deadline for processing the Separation Payment AB2410 (PDF | Excel) is 10:00am on Wednesday the day before the AP Vendor check-write.
  • Missing a deadline may require processing an exception to the AP Vendor check-write process.  The majority of separations are planned events.  It is the responsibility of supervisors to communicate to HR Personnel, and the HR Personnel to communicate to the Payroll Office in a timely manner, to allow ample opportunity to generate the final check in the most efficient manner so that the check may be presented to the employee on his/her final day.

The HR Team completes the final wage payment process.

  • If final pay is generated through the AP Vendor check-write process the HR Service Team member will pick-up the employee's final check from the Payroll Office and distribute it to the employee at the place of discharge or where the employee works.
  • If final pay is generated through the regularly schedule payroll compute, the payment will be issued according to the payroll production schedule.  The final paycheck will be distributed according to the pay disposition code.
  • The separation action should be promptly entered into PPS per payroll deadlines: ending the appointment(s) and distribution(s), entering the separation date, separation reason and last day on pay status.
  • The employee is provided with the Separating Employee Packet, including information on DCP Accumulation withdrawals.
  • Zero-out the employee time on the next UPAY644-E Expanded Time-Reporting Worksheet as necessary.
Catagories of separating employees

The final pay policy applies to employees who voluntarily separate from University employment and includes:

  • Employees who quit career positions to accept per diem positions.
  • Employees who resign prior to their appointment end date (early resignations).
  • Employees who are retiring.

The final pay policy applies to employees who involuntarily separate from University employee and includes:

  • Dismissals
  • Layoffs
  • Employees who are receiving settlement payments.

For information about severance pay and voluntary and involuntary termination benefits please refer to the Termination Benefits Guide.

The final pay policy does not apply to employees who are transferring to other UC campus locations without a break in service.  Please refer to the Interlocation Transfer Guide for more information about employees who are transferring to other UC locations.

The final pay policy does not apply to expiring Academic or Student appointments, including apointees who leave campus prior to their appointment end date.

The final pay policy does not apply to payments made upon death of a University employee.  Pleae refer to the Accounting Manual, Section P-196-25 for more information about the policy and procedures relating to payments made upon the death of a University employee.

Consequences for non-compliance

The University and the Payroll Office personnel are at risk for fines and penalties when the Payroll Office is not given sufficient time to respond to requests for payment of final pay.

  • The HR Service Team communicates with employees about grievances and directs the employee to contact the Labor Board.  The HR Service team notifies the Payroll Office by email about separation payment grievances.
  • Daily penalties may be assessed and include weekends and holidays for up to a maximum of 30 days wages.
  • Penalty payments are considered tax reportable income and are not subject to typical employment taxes (Federal and/or State withholding, etc).
Special situations

There are instances when current month pay should be adjusted.  Contact the Payroll Office for guidance.

  • The Payroll Office consults with the Compensation Office for all retroactive wage implementations to ensure compliance with the mandates set forth in the California Labor Code and CA Assembly Bill 2410.
  • Contact the Payroll Office when an employee is discharged or quits during a time when retroactive wages are to be paid.
  • The University is obligated to comply with provisions of CA Assembly Bill 2410 when a separating employee does not provide their timesheet or does not respond to requests for information needed to process final payment.
  • Payment is for all wages known at the time of separation.  The HR Service Team should use conservative estimates when final hours cannot be verified.  Every effort must be made to pay an employee who quits without notice all unpaid wages within the 72-hours period.  Any additional earnings are processed as additional pay adjustments through a regularly scheduled payroll compute.
  • When an employee is dismissed at the end of an investigatory leave, the HR Service Team consults with the Labor Relations Office to determine the most appropriate method to disperse final payment to the employee.
  • It is the responsibility of the HR Service Team to receive a request in writing when an employee requests that final payment be mailed to him/her.

The California Labor Code includes a provision for separation payment requirements for the month of December.  Employees separating in December, prior to campus closure, should be paid using the Separation Payment AB2410 Form and the employee's time should be zeroed-out on the UPAY644-E Time Reporting Worksheet.

If an employee is losing employment and the payment date falls on a date when the employer is closed (Saturday, Sunday or a holiday), the final payment is to be dispersed on the next business day.

Do not contact the Payroll Office for the following instances:

  • Employees separating during the campus closure should be paid all pay due on the December monthly payroll cycle.  December time, terminal vacation hours and any over time should be entered on the December MO UPAY644-E Time Reporting Worksheet.  Final pay will be generated on the December monthly payroll cycle (check release: first working day of January).
  • Employees with hourly rates of pay who are separating during campus closure should be added to the December MO UPAY644-E Time Reporting Worksheet.  Final pay will be generated on the December monthly payroll cycle (check release: first working day of January).
  • The HR Service Team or Division should enter any adjustments for prior pay periods into OPTRS for the December monthly payroll cycle via EDLR prior to the December OEU Closed Period.
  • For more information about the December separation process please refer to the OPTRS Manual: DOPE section,  Separation from Employment.
  • The HR Service Team updates PPS during the appropriate OEU open period with the employee's separation date, separation reason code, destination code and the last day on pay status.
Resources

The policies that apply to this campus business procedure include:

The method for processing separation actions is determined according to individual employee reason, circumstance, and timing.

  • Refer to UCSC Payroll Guides
  • Refer to OPTRS Manual/DOPE section/Separation from Employment Process.

Staff separation processing is performed by:

Academic separation processing is performed by:

Student separation process is performed by the:

Where to get help

Assistance is available for your separation payment-related questions from the Payroll Office.