Learning the ins and outs of Washington’s employee separation process is the key to ensuring your organization is compliant with employee termination laws. Fulfilling your state-specific employer obligations helps mitigate legal liability.
This state-specific employee separation checklist and guide will help you understand Washington’s final paycheck requirements, separation notices, severance agreements, reporting employee termination, and withdrawing registration to do business in the state.
Washington Employee Separation Checklist
- Provide final paycheck
- Issue separation notice
- Execute severance agreement
- Report termination
- Withdraw registration to do business
1. Final Paycheck Requirements in Washington
Washington state law requires that all employees who separate from their employer receive all due wages by the next scheduled payday. If a sales representative’s contract is terminated, any earned commissions must be paid within 30 days after the employer receives payment for the goods sold. Employers are generally not required to pay out accrued and unused vacation time, however, unless specified in the employee’s contract or company policy.
The exception is that temporary construction workers are entitled to payout of unused sick leave if they work fewer than 90 days for an employer.
While Washington law does not specify the method for delivering final wages, it is generally advisable to use regular pay channels. Employers who fail to pay wages may face penalties. These include payment of the unpaid wages, attorney’s fees, and costs. Willful non-payment can result in civil penalties of up to $20,000, and is considered a misdemeanor offense.
2. Firing Employees in Washington
Because Washington is an at-will employment state, employers may fire an employee at any given time, for any legal reason. Unlike many states, Washington does not require employers to issue any sort of separation notice when an employee leaves the company.
3. Severance Agreements in Washington
If you intend to have employees sign a severance agreement, be aware of these important rules. First, employers must clearly list the claims being released under both federal and Washington state law. In Washington, releasable state claims include those under the Washington Law Against Discrimination, Washington’s Equal Pay and Opportunities Act, Washington’s Fair Chance Act, Washington’s leave laws, and Washington’s minimum wage and overtime laws. Any agreement should only waive claims which arose before the agreement’s effective date.
Furthermore, non-disparagement clauses in Washington severance agreements cannot prevent employees from disclosing conduct they reasonably believe to be illegal. This includes discrimination, harassment, retaliation, wage and hour violations, or sexual harassment or assault.
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 Washington
If your employee is subject to 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 may expedite reporting and register for online reporting with the Federal Office of Child Support Enforcement here.
Alternatively, you may physically 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 Washington
When separating from your last Washington employee ends your business transactions in the state, you can formally withdraw your registration to do business. To withdraw, simply identify your company’s legal structure and submit the necessary forms to the Washington Secretary of State and/or Department of Revenue.
For-Profit Corporations, Non-Profit Corporations, and Limited Liability Companies (LLCs) all must file this Statement of Withdrawal. For-Profit and Non-Profit Corporations must also submit a Revenue Clearance Certificate from the Washington Department of Revenue, showing that all state taxes have been paid.
Stay Compliant with Washington Employee Separation Requirements
Learning about the Washington Employee Separation Agreement requirements and process helps employers ensure compliance by recognizing employee rights.
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