Separation notices provide former associates with information on their right to file for unemployment after a separation. These notices, and other state or company mandated documents, are an important part of the separation process, but can be challenging to keep up with, especially with constantly changing requirements.
Background
Although requirements have existed for many years, during the pandemic, states were officially required to notify former associates of their rights in order to receive federal aid. Federal guidance, however, was very broad, which resulted in states complying with the requirements to varying degrees and in numerous different ways.
Since the pandemic ended and federal aid expired along with it, states have diverged in how they handle these separation notice requirements. Some states have chosen to expand on their initial requirements while others have allowed these requirements to expire either in part or in whole.
Separation Notice Requirements by State
What is required for your employee population will depend on which states you have employment in – and could change with updated legislation at any time.
Four states, as of this writing, require notification and provide specific penalties should notice not be provided. An additional 20 states require individual notification but have no specific penalty defined. In five states, voluntary notification is either recommended (one) or optional (four). The remaining states require an unemployment insurance (UI) poster to be accessible to all employees.
Moving Into New States
During a merger or acquisition, you may move into new states where you did not previously have an employee population or only had a very small number of employees. In these new states, you will need to ensure you understand the requirements and be ready to comply prior to your first employee being separated.
Do You Need to Provide a Separation Notice During M&A Activity?
M&A activity is complicated, and a further complication could be determining if your organization needs to provide separation notices during the transition period.
Total Acquisition
With a total, stock acquisition, including the FEIN, where there is no interruption in work or change in account information, no separation notice is needed. If your organization decides to separate any of the newly acquired employees after the transition, separation notices will be necessary and will be the responsibility of the acquiring company to distribute. . But until that time, these employees are considered employed with no interruption and therefore do not need to be notified.
Transition of FEIN
If there is a change or transition of FEIN for any reason – including partial acquisitions, reorganization, etc. – you may need to provide the impacted associates with a separation notice that complies with the regulations of the work state. .
This is the case if the employee(s) FEIN transfer necessitates a formal “termination” and “rehire” under the new/different FEIN. When there is a break or transition in “where” an individual is employed and it occurs in a state with separation notice requirements the state’s requirements of a separation notice, and reminder of availability of UI benefits needs to be met.
Tell Us About It
Any time there is a change – whether an acquisition, merger, or reorganization – to your employee population, it is important to communicate this with your vendor partner. Providing advance notice of changes allows Thomas & Company to appropriately evaluate the change and inform you of the necessary next steps to ensure a smooth transition throughout all of your services, including Offboarding Compliance.
Data File
A major component of compliance and creating a smooth transition is ensuring the data file remains accurate and up-to-date. When a new employee population is added, it is imperative that their information is provided to Thomas & Company so it can be loaded into our system in a timely manner. Then, ongoing daily files should continue to provide updated information on your entire employee population, including the new additions.
Your Trusted Partner
At Thomas & Company, our dedicated team of experts understands the complexities of these transformative deals and their impact across your organization. From verifications to unemployment, separation notices, and more, our team has an eye for detail and works hand-in-hand with your organization to maximize the value and potential of your business transaction(s), while ensuring compliance. From required states to coverage nationwide to company unique forms, Thomas & Company can create an offboarding compliance solution that best fits your company’s needs!
No-Worry Compliance
Thomas & Company provides timely and accurate submission of required information and documentation to meet individual state requirements. With continuous monitoring of new and changing separation notice requirements, you will always be compliant and never have to worry about meeting state deadlines again.
Document Retention
With best-in-class data security, Thomas & Company securely stores delivered communications and can provide copies of notices upon request.
Ease of Implementation
A transition to this service includes an easy, straight-forward implementation for clients who already utilize our Employment and Wage Verification (EWV) service as the data provided for EWV will satisfy nearly all data points needed for Thomas & Company to process your separation notices. A brief data review will provide confirmation of which, if any, updates or changes are needed for each individual client.
Not already an EWV client? Thomas & Company can add both EWV and Offboarding Compliance services in a single implementation.
Our approach is tailored to align with your unique business needs, ensuring that each transaction enables your company’s success.
Check Out More on This Topic!
Interested in learning about more ways that merger and acquisition activity can impact your organization? Check out our previous articles and stay tuned as we bring M&A Mondays to a close!
