Learning about Wisconsin’s employee separation process is the best way to mitigate legal risk and ensure compliance with state and federal law. Because employee termination laws and employer obligations can vary considerably between states, it’s important to review state-specific requirements.
This helpful employee separation checklist and guide covers key components of Wisconsin’s final paycheck requirements, separation notices, severance agreements, reporting employee termination, and withdrawing registration to do business in the state.
Wisconsin Employee Separation Checklist
- Provide final paycheck
- Issue separation notice
- Execute severance agreement
- Report termination
- Withdraw registration to do business
1. Final Paycheck Requirements in Wisconsin
Wisconsin law requires that all separated employees be paid all earned wages by the next scheduled payday or within 31 days, whichever comes first. However, if an employee is terminated due to the employer merging, liquidating, or disposing of the business, payment must be made within 24 hours of separation. Accrued and unused vacation time must also be paid out, unless a policy or contract explicitly states otherwise.
While the law does not specify how final wages must be paid, it’s considered best practice to use regular pay channels. Employers who fail to pay wages may be liable for the unpaid amount, plus attorney’s fees and court costs.
2. Firing Employees in Wisconsin
Firing employees in Wisconsin is subject to notice requirements. First, all employers that provide a group health insurance plan must notify separated employees of their right to continue coverage under Wisconsin’s state-level COBRA law. The notice should include the procedures and timeframes for obtaining continued coverage, and must be provided within 5 days of separation.
Second, certain employers may have additional notice requirements under Wisconsin’s WARN Act. Covered employers must provide 60 days’ notice before a business closing or mass layoff affecting 25 or more employees, or a mass layoff which involves either 25 percent of the workforce or at least 500 employees.
“Covered employers” are those with 50 or more employees in Wisconsin, and “affected employees” are defined as employees who will face significant employment losses due to such events. Employment loss includes terminations (except for cause or voluntary departures), extended layoffs beyond six months, or reductions in work hours which exceed 50 percent over six months.
Certain events exempt employers from the 60-day notice requirement. This includes business sales (if the buyer agrees to retain employees), strikes or lockouts, relocations within a reasonable commuting distance (less than 50 miles), temporary business cessations, and the conclusion of seasonal work. In cases where the event is unforeseeable or caused by natural disasters, the employer must provide notice as soon as practicable.
Notices must be given to affected employees, their representatives, local municipal officials, and the Wisconsin Department of Workforce Development. The content requirements vary slightly based on the recipient.
3. Severance Agreements in Wisconsin
When executing a severance agreement with a Wisconsin employee, you must specifically include any and all of the claims the employee is releasing under both federal and state law. Wisconsin employees may waive claims under the Wisconsin Fair Employment Act, Wisconsin’s leave laws, and Wisconsin’s minimum wage and overtime laws. However, employers should ensure that any claims release only waives claims which arose prior to the agreement’s effective date.
Lastly, make sure 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 Wisconsin
When separating from an employee with an Income Withholding for Support Order (“IWO”), promptly report the employee’s termination to the child support agency, court, or attorney that issued the IWO. You may register for online reporting with the Federal Office of Child Support Enforcement here.
You also 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 Wisconsin
When you cease business operations in Wisconsin, such as when you separate from your final Wisconsin employee, your company may choose to withdraw its state business registration. The type of forms you must submit to the Wisconsin Secretary of State depend on what kind of legal entity is involved.
For-Profit Corporations must file this Application for Certificate of Withdrawal, while Non-Profit Corporations should complete this Application for Certificate of Withdrawal. Limited Liability Companies (LLCs) need to file this Statement of Withdrawal.
Stay Compliant with Wisconsin Employee Separation Requirements
Learning about Wisconsin employee rights and Employee Separation Agreement requirements helps employers ensure regulatory compliance and mitigate risk.
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