Getting familiar with the South Carolina employee separation process is one of your key employer obligations. Employee termination laws and employee rights can vary significantly between jurisdictions.
This handy employee separation checklist and guide provides an overview of South Carolina’s final paycheck requirements, separation notices, severance agreements, reporting employee termination, and withdrawing registration to do business in the state.
South Carolina Employee Separation Checklist
- Provide final paycheck
- Issue separation notice
- Execute severance agreement
- Report termination
- Withdraw registration to do business
1. Final Paycheck Requirements in South Carolina
South Carolina state law requires that employees who are terminated must receive their final paycheck within 48 hours of separation or by the next regular payday. The wait until the next payday cannot exceed 30 days.
While the law does not specify a timeline for paying employees who resign, it is best practice to provide final payment on the next scheduled payday. All wages due must be paid, but employers are not obligated to pay out accrued and unused vacation time, unless otherwise specified in an employee contract or company policy.
Although the law does not dictate how final wages must be paid, using regular pay channels is considered best practice. Employers who fail to pay wages on time may be required to pay the owed amount. If the employee successfully recovers their wages through legal action, the employer may also be liable for up to three times the unpaid wages, along with attorney’s fees and costs.
2. Firing Employees in South Carolina
When separating from or firing employees in South Carolina, employers are obligated to fulfill a notice requirement. All employees must be provided a Notice of the Availability of Unemployment Insurance Benefits upon separation.
South Carolina also requires all employers that offer group health insurance to “clearly and meaningfully advise” separated employees of their right to continue coverage under South Carolina’s state-level COBRA law. They must also inform employees of “the amount of premium required” and “the employee’s responsibility to pay the premium each month before the date that the policy month begins.”
3. Severance Agreements in South Carolina
If you plan to execute a severance agreement in South Carolina, make sure that the agreement details exactly which claims the employee is waiving under both state and federal law. In South Carolina, those state law claims include any which arise under the South Carolina Human Affairs Law, South Carolina Bill of Rights for Handicapped Persons, South Carolina Pregnancy Accommodation Act, and South Carolina Payment of Wages Act. The agreement should only waive claims arising before the agreement’s effective date, rather than those which may arise later.
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 South Carolina
If an employee has an Income Withholding for Support Order (“IWO”), you are obligated to promptly report the employee’s termination to the child support agency, court, or attorney that issued the IWO. You can register for online reporting with the Federal Office of Child Support Enforcement here.
If you’d prefer to physically report termination, you 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. You will need 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 South Carolina
If your organization concludes its business dealings within South Carolina—such as when you separate from your last employee in the state—you may withdraw your business registration in the state. The type of form you’ll file with the South Carolina Secretary of State depends on your company’s legal structure. For-Profit Corporations should submit a Application for Surrender, and Non-Profit Corporations must file this Application for Withdrawal. Limited Liability Companies (LLCs) must submit this Certificate of Cancellation.
Stay Compliant with South Carolina Employee Separation Requirements
Understanding South Carolina’s Employee Separation Agreement requirements will help you lessen potential legal liability while complying with employee rights.
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