Getting familiar with the Utah employee separation process is important for mitigating an organization’s legal liability, and ensuring that you’ve fulfilled your employer obligations. Employee termination can vary significantly depending on the state.
This employee separation checklist and guide provides an overview of Utah’s final paycheck requirements, separation notices, severance agreements, reporting employee termination, and withdrawing registration to do business in the state.
Utah Employee Separation Checklist
- Provide final paycheck
- Issue separation notice
- Execute severance agreement
- Report termination
- Withdraw registration to do business
1. Final Paycheck Requirements in Utah
Utah state law has clear guidelines for paying employees after they separate from their employer. If an employee is terminated, the employer must issue the final payment within 24 hours. For employees who resign, payment is due by the next scheduled payday. All earned wages must be included in the final paycheck.
Employers are not required to pay out accrued and unused vacation time, unless it is otherwise specified in the employee’s contract or company policy. The final payment should be made at the employee’s designated place of payment.
Failure to comply with these regulations can result in significant penalties for employers, including payment of the owed wages, plus up to an additional 60 days’ wages at the employee’s regular rate. Employers may also be liable for a daily penalty of five percent of the owed wages for up to 20 days, and fines of up to $500 for each offense.
2. Firing Employees in Utah
Firing employees in Utah is a straightforward process. Because Utah is an at-will employment state, employers and employees may terminate employment at any time for any legal reason. However, Utah does have one notice requirement upon separation.
Employers who provide a group health insurance plan and have fewer than 20 employees must notify separated employees of their right to continue coverage under Utah’s state-level COBRA law. The notice must be sent to the employee’s home address, via first-class mail, within 30 days of separation. It needs to inform the separated employee of the payment amounts that are required to continue coverage, as well as the time, place, and manner in which the payments must be made.
3. Severance Agreements in Utah
When asking an employee to sign a severance agreement in Utah, there are several things an employer must do. First, if you plan to ask your employee to waive claims under state or federal law, employers need to specifically list which claims they are releasing.
In Utah, the state law claims they may waive include those under the Utah Antidiscrimination Act, Employment Relations and Collective Bargaining Act, Utah Right to Work Law, Utah Drug and Alcohol Testing Act, Utah Minimum Wage Act, Utah Protection of Activities in Private Vehicles Act, Utah Employment Selection Procedures Act, Utah Occupational Safety and Health Act, and Utah’s leave laws.
Next, ensure that your agreement only releases claims which arose prior to the agreement’s effective date.
Finally, remember to review applicable federal law. For example, the NLRB’s 2023 McLaren decision restricts the use of non-disparagement and confidentiality provisions in severance agreements.
4. Reporting Employee Termination in Utah
When separating from an employee with an Income Withholding for Support Order (“IWO”), you must report the employee’s termination to the child support agency, court, or attorney that issued the IWO as soon as possible. Employers may opt for online reporting with the Federal Office of Child Support Enforcement by registering here.
Alternatively, your organization may report an employee’s termination by completing the Notification of Employment Termination or Income Status section of the IWO. Then fax or mail it to the child support agency that issued it. Prepare the following information:
- Employee Name
- Employee Case Identifier
- Last Known Home Address
- New Employer Address (if known)
- Date of Employee Separation
5. Withdraw Registration to do Business in Utah
If your organization has ceased business dealings in Utah—which is common when separating from your last in-state employee—you may choose to withdraw your registration to do business within the state. Depending on your company’s legal structure, the forms you must submit to the Utah Secretary of State will vary.
For-Profit Corporations and Non-Profit Corporations should file this Application for Withdrawal, while Limited Liability Companies (LLCs) must file this Withdrawal of Registration.
Stay Compliant with Utah Employee Separation Requirements
Staying compliant with Utah Employee Separation Agreement requirements ensures that employers achieve regulatory compliance and honor state-specific employee rights.
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Looking for employee separation laws for a different state? Our interactive map makes it easy to find all employee termination requirements by state.
