Understanding the Rhode Island employee separation process is key for employers who want to mitigate their organization’s potential legal liability. Because employee termination laws and employer obligations differ between jurisdictions, it’s important to know what’s expected when an employee resigns or is fired.
This employee separation checklist and guide is a resource for employers navigating Rhode Island final paycheck requirements, separation notices, severance agreements, reporting employee termination, and withdrawing registration to do business in the state.
Rhode Island Employee Separation Checklist
- Provide final paycheck
- Issue separation notice
- Execute severance agreement
- Report termination
- Withdraw registration to do business
1. Final Paycheck Requirements in Rhode Island
Under Rhode Island state law, all employees who separate from their employer must receive their final paycheck on the next scheduled payday. However, if the employer is liquidating, merging, disposing of the business, or relocating out of state, all wages must be paid within 24 hours. All earned wages must be included in the final paycheck, and employees with at least one year of service must also receive payment for any earned, unused leave.
Final paychecks should be delivered through regular pay channels. Employers who fail to pay wages on time are guilty of a misdemeanor. They may face fines up to $400, imprisonment for up to one year, or both, with each day of non-payment considered a separate offense.
2. Firing Employees in Rhode Island
Because Rhode Island is an at-will employment state, firing employees is straightforward. Both employers and employees can terminate the working relationship at any given time, for any legal reason. However, Rhode Island employers are expected to notify separated employees of the potential availability of unemployment compensation benefits. This notice must be provided at the time of separation. The state provides sample notice language for employers to use.
3. Severance Agreements in Rhode Island
When executing a severance agreement in Rhode Island, employers must ensure that they clearly list the federal and state law claims the employee is waiving. In Rhode Island, the state law claims that may be released are those under the Rhode Island Fair Employment Practices Act, Civil Rights of People with Disabilities Act, Rhode Island Civil Rights Act, Rhode Island Parental and Family Medical Leave Act and other leave laws, Rhode Island’s Employee Privacy laws, and Rhode Island’s minimum wage and overtime laws. Be mindful that the agreement only waives claims that arose prior to its effective date, rather than claims that may arise later.
Lastly, employers must also remember to review applicable federal employee termination laws and guidelines. 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 Rhode Island
If you are separating from an employee with an Income Withholding for Support Order (“IWO”), report the employee’s termination to the child support agency, court, or attorney that issued the IWO as soon as possible. Organizations may expedite the process by registering for online reporting with the Federal Office of Child Support Enforcement here.
Alternatively, you may report an employee’s termination by completing the Notification of Employment Termination or Income Status section of the IWO. 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 Rhode Island
When separating from your last Rhode Island employee ends your business dealings in the state, your organization may want to formally withdraw its state business registration. The forms you’ll need to submit to the Rhode Island Secretary of State depend on your company’s legal structure.
For-Profit Corporations must file this Certificate of Withdrawal and certify that it has paid all required state taxes. For-Profit Corporations can check their tax status by emailing tax.collections@tax.ri.gov. Non-Profit Corporations should file this Certificate of Withdrawal.
Finally, Limited Liability Companies (LLCs) must file this Certificate of Cancellation and certify that it has paid all required state taxes. LLCs can check their tax status by emailing the same email address as For-Profit Corporations.
Stay Compliant with Rhode Island Employee Separation Requirements
Knowing the Employee Separation Agreement laws in Rhode Island helps employers understand employee rights and achieve regulatory compliance.
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