Termination

Review the procedure and policy for terminating an employee.

Employees separate from the university for a variety of reasons, and several parties may be involved in processing a termination. Please use the information below to determine the responsibilities for each party.

Step-by-Step: Termination

Quick Reference Guide: View completed ePAR transactions

Step-by-Step: Approving transactions

Steps for HCM Community Members

Department HCM Community Member Responsibilities

  1. Confirm the correct last date of employment has been provided.
  2. Confirm all outstanding pay items.
    Enter the termination action into HCM as soon as possible, provided it does not create confidentiality issues. The effective date will be the day after the final day worked, or on paid leave. (For example, an employee who worked through 3/12/xx will have an effective date of 3/13/xx for the Termination for Cause action in HCM.)

    If the termination action cannot be entered or final pay processed (e.g., HCM is unavailable), contact an Employee Services payroll counselor.

    Step-by-step: Terminate an employee in HCM.

  3. Provide Employee Services advance notice of the pending termination.
    Contact an Employee Services payroll counselor to alert payroll processors of the Term for Cause, discuss timing issues and arrange for distribution of the termination check. If you cannot provide advance notice, notify Employee Services as soon as possible.

  4. Be aware of the payroll deadline, and process any pull/cancelation requests using the normal pull/cancel process.
    Termination actions processed after the payroll deadline will require a pull/cancel of the employee's regular pay. In its place, a hand-drawn check with the correct information will be provided to prevent overpayment.

  5. If needed, prepare and submit a Handdrawn Warrant Request Form to Employee Services.
    Indicate reason No. 3, Involuntary Separation. To avoid delaying payment, the form must be correct and complete, referencing all final pay items due. Please also check the "Involuntary Separation" box at top of Handdrawn Warrant Request Form.

Complete Termination for Cause Process and Additional Information

Processing a Termination for Cause requires coordination among the department supervisor/department administrator/appointing authority, the campus human resources office, the department HCM Community member and Employee Services. For an outline each party's responsibilities, as well as items to finalize, review the steps below:

1. Supervisor Responsibilities

Supervisor/Department Administrator/Appointing Authority Responsibilities

  1. Involve your campus' human resources office.
    Departments must work with their campus HR offices and/or legal counsel whenever an employee must be terminated for cause. Consider all legal and personnel issues before taking any action. The department/supervising authority must ensure all human resources requirements are met.
  2. Notify your department's HCM Community member.
    The appropriate department supervising authority must notify the department's HCM Community member whenever a termination for cause action is being taken. Notification should occur in advance whenever possible to give the HCM Community member and Employee Services sufficient time to process the final payment.
  3. Provide your HCM Community member final pay information.
    The department supervising authority must provide the HCM Community Member with current and accurate information on final pay due the employee. Use department or campus checkout forms to ensure all issues related to termination have been accounted for. The final check should include all of the following as they apply: regular salary through the last day worked; payment for any remaining vacation balance; sick payout only if eligible (see note); overtime pay; shift differential; any additional outstanding pay items. Reductions in pay that are still outstanding should also be mentioned, such as VDK, SDK, DK1, and DK2.

    Note: Sick payout of 25 percent of remaining balance (up to maximum limit) will only apply if an employee's eligibility for retirement is confirmed and documented.

  4. Provide your HCM Community member with the last date of employment.
    The department supervising authority must provide the HCM Community Member with a confirmed final date of employment. This is needed to begin the termination payment process and correctly enter the action into the HCM.
  5. Notify the employee of the termination decision.
    After working with Human Resources, notify the employee of the termination decision and the method by which he/she will receive final pay.

2. HCM Community Member Responsibilities

Department HCM Community Member Responsibilities

  1. Confirm the correct last date of employment has been provided.
  2. Confirm all outstanding pay items.
    Enter the termination action into HCM as soon as possible, provided it does not create confidentiality issues. The effective date will be the day after the final day worked, or on paid leave. (For example, an employee who worked through 3/12/xx will have an effective date of 3/13/xx for the Termination for Cause action in HCM.)

    If the termination action cannot be entered or final pay processed (e.g., the HCM is unavailable), contact an Employee Services payroll counselor.

    Step-by-step: Terminate an employee in HCM

  3. Provide Employee Services advance notice of the pending termination.
    Contact an Employee Services payroll counselor to alert Payroll of the Term for Cause, discuss timing issues and arrange for distribution of the termination check. If you cannot provide advance notice, notify Employee Services as soon as possible.

  4. Be aware of the payroll deadline, and process any pull/cancelation requests using the normal pull/cancel process.
    Termination actions processed after the payroll deadline will require a pull/cancel of the employee's regular pay. In its place, a hand-drawn check with the correct information will be provided to prevent overpayment.

  5. If needed, prepare and submit a Handdrawn Warrant Request Form to Employee Services.
    Indicate reason No. 3, Involuntary Separation. To avoid delaying payment, the form must be correct and complete, referencing all final pay items due. Please also check the "Involuntary Separation" box at top of Handdrawn Warrant Request Form.

3. Employee Services Responsibilities

Employee Services Responsibilities

  1. Assist each department with any issues and questions.
  2. Process any requested pull/cancelation related to the termination.
  3. Process all termination handdrawn requests in a timely manner, provided all information is complete and the HCM is available for use.

Time Frame for Final Pay With Termination For Cause

Employees who are terminated for cause and working in Colorado are entitled to receive their final payment no later than 24 hours after the start of the Payroll Departments next regularly scheduled workday. For employees who live and work in other states, those state regulations must be reviewed to determine proper final payment rules for terminations. Meeting this requirement involves effective and timely coordination and sufficient advance notice to Employee Services.

Processing may be delayed if HCM is not available.

4. Timing of Payment

Separation actions are used for employees leaving the university due to a voluntary or involuntary termination. Separation (termination) actions must be completed in a timely fashion and must comply with State Fiscal Rule 9-3, .01.

For most terminating employees, all final pay including salary, overtime, payment for all appropriate leave balances and any other appropriate additional payments will be included on their final regular pay date. If this is not possible, departments should process all final pay items in CU Time no later than the month following termination.

Employees who are terminated involuntarily and are working in Colorado are entitled to receive their final payment no later than 24 hours after the start of the Payroll Department's next regularly scheduled workday. To meet this requirement, departments must notify Employee Services before the involuntary termination so there is sufficient time to process the final pay. Processing may be delayed if HCM is not available.

The department is responsible for entering a separation action in HCM for any job record that the employee is leaving. This action should be entered before the campus appointment approval deadline. If the department does not enter the termination for the employee during the pay period in which they left - it may result in an overpayment. Some employees have an appointment end date in the Job Data, Work Location panel. For these employee, HCM will terminate them during payroll processing, using the automatic termination process.

Employees with more than one university job

Only those jobs in which the employee is actively working should show an active status in the job records. All jobs from which the employee has separated (terminated) should show a terminated status in the job records; if they do not, benefits (if benefits eligible) and charges will be assessed to the employee and the department (i.e., the employee and the department are responsible for payment of premiums).

For an individual to be separated (terminated) from ALL university employment, ALL employee (job) records must be in a terminated status. If they are not, the employee and the department are responsible for payment of any premiums. Once a benefits-eligible employee is terminated from their job record(s) benefits will cease as well as access to university offices, computing systems, and resources and programs.

To avoid having an employee's job records automatically terminated, enter information on that job record to reappoint the employee (extend the appointment end date), or by place the job record on either a Short Work Break (SWB) or Leave of Absence (LOA or LWOP) status. NOTE: The employee's department must take one of these actions to avoid having that employee's job record(s) terminated by the system. Placing an employee on leave of absence may require management approval. Check with your dean/director for specific policies.

Note: Place an employee on Short Work Break if the department knows that the employee is going to return to active employment in that job, and IF the employee is eligible to receive benefits (paid by the employee and the department) while on SWB.

5a. Leave Payout - Classified Staff

Vacation Payout

Regular, full-time appointed state classified employees accrue vacation at the following rates, based on years of state service. See State of Colorado Personnel Board Rules and Personnel Director's Administrative Procedures, chapter 5, section 5-7 for the applicable year.

Employees with a vacation leave balance as of their date of termination will be paid for the total accrued hours, but only up to the eligible maximum balance.

Hours exceeding the maximum allowed balance cannot be paid at termination. Maximum allowed vacation balance for state classified employees is usually two years worth of accruals. For example, if your accrual rate is 10 hours per month, your maximum eligible balance for payout is 240 hours.

For the employee's final regularly scheduled system-generated check, the employing department enters the number of hours in CU Time using the earnings code of VCT (Vacation @ Separation). Federal and state taxes are withheld at the supplemental tax rate. Medicare tax, if applicable, and PERA retirement will be deducted.

  • CU Time will calculate the value of the vacation leave payout using the annualized hourly rate (for 100 percent employees, annual salary divided by 2,080 hours) for the employee's appointment, multiplied by the hours entered.

  • If the vacation payout (up to the maximum balance allowed) is not included on the employee's final regularly scheduled check, it must be processed via CU Time no later than the month following termination. If the termination is involuntary all final pay must be requested by submitting a Handdrawn Warrant Request Form.

  • Important Exception For Termination Due to Death: For termination due to death, do not pay any vacation payout via CU Time. The payment must be requested by submitting a icon_name="fa-file-text" size="1" Handdrawn Warrant Request Form to Employee Services. These payments require special steps to process and needs to be taken care of by an Employee Services Payroll team member.

Sick Payout

Employees who terminate from the university and meet PERA age-and-service requirements for a full or reduced retirement (regular service retirement or permanent disability retirement) are eligible for a partial payout of unused sick leave when they resign, retire or terminate from the university.

PERA is responsible for determining retirement eligibility. The maximum allowed payout for sick is 25 percent of the unused current balance up to the maximum eligible sick balance. For state classified employees hired July 1, 1988, or later, the maximum eligible sick leave balance allowed is 360 hours (45 days).

For employees who had a frozen sick balance on June 30, 1988, the maximum accrual may be higher than 360 hours (it will equal 360, plus the frozen sick balance). Twenty-five percent of the employee's remaining balance (up to his/her maximum allowed) at termination will be paid out.

The department must ensure eligibility before processing the payout.

No payment of sick leave may occur unless age and service requirements for retirement eligibility are met. (Exception: In the event of an employee's death, the retirement eligibility requirement is waived.)

Important Reminder: When submitting sick leave at separation (SKS), remember that you must do the calculation to determine the 25 percent of total balance. If you submit the employee's total sick balance, he/she will be grossly overpaid and will be required to repay the overpaid amount.

Payout Calculation (excluding termination due to death)

For the employee's final, regularly scheduled, system-generated check, the employing department enters the calculated 25 percent of eligible hours in CU Time using earnings code SKS (sick leave hours at separation). Federal and state taxes are withheld at the supplemental tax rate. Medicare tax will be deducted, if applicable. No retirement is deducted.

  • CU Time will calculate the value of the sick leave payout using the annualized hourly rate for the employee's appointment (the annual salary, divided by 2,080 hours), multiplied by the hours entered. Note that for employees with less than 100 percent of time this same annualized hourly rate will be used, since the hours were already prorated based on the lower percent of time as they accrued.

  • If the one-fourth sick leave payout (subject to the maximum eligible sick balance for the employee) is not included on the employee's final check, it must be processed via CU Time no later than the month following termination.

  • Important exception for termination due to death: For termination due to death, do not pay any sick payout via Time Collection. The payment must be requested by submitting a Handdrawn Warrant Request to Employee Services. These payments require special steps to process and needs to be taken care of by an Employee Services Payroll team member.

5b. Leave Payout - University Staff/Officers and Faculty

Vacation Payout

Employees with a vacation leave balance as of their date of retirement or termination are to be paid for the total accrued hours, but only up to the eligible maximum balance. Hours exceeding the maximum allowed balance cannot be paid at termination. The maximum allowed payout for vacation at termination/retirement is the employee's current unused balance, up to a maximum of 352 hours (14.67 hours per month, times 24 months).

Employees should check with their campus leave bank manager to determine whether excess hours may be donated to the leave bank before payout. (Note: Some campus departments may have a reduced maximum accrual provision. Please check with your department chair, dean or director.)

For the employee's final, regularly scheduled, system-generated check, the employing department enters the number of hours to be paid into CU Time (see exception listed below) using the earnings code of VCT (Vacation @ Separation). Federal and state taxes are withheld at the supplemental tax rate. This payment is also subject to retirement, OASDI, and Medicare tax as applicable.

  • A university staff employee who transfers to an academic-year appointment is eligible for payment of unused vacation leave at the time of termination from the exempt appointment, subject to the maximum limits above.

  • CU Time will calculate the value of the vacation leave payout using the annualized hourly rate for the employee's appointment, multiplied by the hours entered. For 100 percent employees, the annualized hourly rate will be the annual salary, divided by 2,080 hours. This pay rate is shown in HRMS on the job data compensation panel.

  • If the vacation payout (up to the maximum balance allowed) is not included on the employee's final check, it must be processed via CU Time no later than the month following termination. If the termination is involuntary all final pay must be requested by submitting a Handdrawn Warrant Request.

  • Important Exception for Termination Due to Death: For termination due to death, do not payout any vacation via Time Collection. The payment must be requested by submitting a Handdrawn Warrant Request to Employee Services. These payments require special steps to process and needs to be taken care of by an Employee Services Payroll team member.

Sick Leave Payout

Based on the criteria for their respective retirement plans (CU 401(a) Retirement Plan or PERA), employees who meet age-and-service requirements for a full or reduced retirement are eligible for a payout of unused sick leave when they resign, retire or terminate from the university. (For university staff retiring under PERA, PERA age and service requirements will apply.)

The maximum allowed payout for sick is one-fourth of the unused current balance, up to a maximum of 240 hours payable (one-quarter of the 960 hours/120 days maximum hours allowed). See Regent Policy 11-E for more information.

No payment of sick leave may occur unless age-and-service requirements for retirement eligibility are met. (Exception: In the event of an employee's death, the retirement eligibility requirement is waived, and the employee's estate may be paid for one-fourth of the unused sick balance, up to a maximum of 960 hours [120 days].

Frozen Sick Leave Balances

Regents Policy 11-E has capped the amount of sick leave to 25 percent at the time of retirement or an employee's death, with a maximum is 960 hours (120 days). The grandfather clause states:

Employees whose unused sick leave was in excess of 120 days on May 2, 2001, are eligible to receive payment for 25% of that sick leave balance or any unused portion of the balance when they terminate, if they meet the age and service requirements for retirement (or upon death).

To track employees who had a sick leave balance greater than 960 hours (120 days) as of May 1, 2001, Employee Services has created a Frozen Sick Leave balance. This balance is informational only and will assist in determining the sick leave payoff at retirement or death of an employee.

The frozen sick leave balances will appear on the July payroll register accounting report with an earnings code of FZS (frozen sick leave). Although the FZS earnings code does have a dollar amount associated with it, that amount will not be paid to the employee. The dollar amount reflects the estimated potential value of the frozen sick leave hours based on the employee's current salary.

  • Dr. Smith had 1,500 hours of sick accrued as of May 1, 2001. In August 2006, he retired with a sick balance of 1,600 hours. The sick leave at retirement payout would be 25 percent of 1,500, not 1,600. He received 25 of the balance available to him on May 1, 2001.

  • Dr. Jones had 900 hours of sick accrued as of May 1, 2001. By the time he retired in August 2006, his balance was 1,000 hours. His sick leave at retirement payout was 25 percent of 960 hours, since that is the maximum that may be paid when the employee had fewer than 960 hours of accrual as of May 1, 2001.

  • Dr. Davis had 1,000 hours of sick accrued as of May 1, 2001. Over the next few years, he used a large number of sick leave hours, and his balance was 700 hours at retirement. His sick leave payout at retirement was 25 percent of 700 hours.

Important Reminder: When submitting sick leave at separation (SKS), remember that you must do the calculation to determine the 25 percent of total balance. If you submit the employee's total sick balance, he/she will be grossly overpaid and will be required to repay the overpaid amount.

Payout Calculation

For the final pay period, the employing department enters the calculated 25 percent of eligible hours in CU Time (see exception below) using earnings code SKS (sick leave hours at separation). Federal and state taxes are withheld at the supplemental tax rate. OASDI (Social Security) and Medicare tax will be deducted, if applicable. No retirement is deducted.

  • A 12-month employee who transfers to an academic-year appointment is eligible for payment of unused sick leave (payment limits as indicated above) at the time he/she terminates his/her 12-month appointment, but only if age and service requirements for retirement eligibility are met at the time of the transfer.

  • CU Time will calculate the value of the sick leave payout using the annualized hourly rate (annual salary based on a 100 percent time appointment, divided by 2,080 hours) for the employee's appointment multiplied by the hours entered.

  • If the sick leave payout (up to the maximum balance allowed) is not included on the employee's final check, it must be processed via CU Time no later than the month following termination.

  • Important Exception for Termination Due to Death: For termination due to death, do not pay any sick payout via Time Collection. The payment must be requested by submitting a Handdrawn Warrant Request Form to Employee Services. These payments require special steps to process and needs to be taken care of by an Employee Services Payroll team member.

Please refer to the university policy for additional information.