Resignation Pay

Resignation pay is also referred to as resignation notice pay. It's part of final pay, also called termination pay.

Questions about whether or not they are entitled to resignation pay are among the most common that employees ask after quitting their jobs, by giving advanced resignation notice. For example:

My boss terminated my employment on the day I turned in my resignation letter and refused to pay me through my notice period, even though I gave the minimum resignation notice required by company policy. Can my boss do that?

Generally, the answer to such a question is likely to be yes. That's partly because employers have the right to protect their businesses from last-minute sabotage, theft of proprietary information and ugly watercooler rumors by resigning, potentially-disgruntled employees.

But it's more so because employment is presumed to be voluntary and indefinite in virtually all states, under the Doctrine of Employment at Will.

As nonsensical as it may seem, quitting a job is likely good cause for employment termination under the Doctrine. So, employers generally have the right to immediately terminate the employment of resigning employees, despite that the employees gave ample and proper notice in compliance with company policy.

If your employer does effectively "fire" you for quitting with ample and proper notice, you can still legitimately say that you resigned, such as on job applications and during interviews.

Subsequently, employers in most states do not have to issue resignation notice pay for the days employees only planned to work by giving notice. Some employers do so anyway; but, only a few states require employers to issue resignation pay for days not worked in a resignation notice period and typically, only if employers in those states require employees to submit advanced resignation notice by policy.

To find out if you work in one of the few states mentioned above, contact the wage and hour (or equivalent) division of the relevant state labor department or browse its Web site. If you do live in one of those states and your employer doesn't issue resignation pay as required, then the wage and hour division might help you to collect it.

Regardless of the state, if your employer doesn't issue resignation pay in contradiction to its own, documented policy regarding same, then the wage and hour (or equivalent) division of the state labor department might help you to collect it. Otherwise, you'll likely need the help of an attorney.

If an employee is entitled to collect resignation pay, but his or her employer doesn't issue it by the time all earned wages are due in the employee's final paycheck under a state final pay law, then the employer might have to pay a penalty and interest to the employee, and reimburse the employee for attorney and other legal fees incurred to right the wrong.

If you're asking yourself why you should even bother to write a resignation letter when your employer might deprive you of resignation pay anyway, refer to Resignation Notice for an answer.