Employee Offboarding Checklist: Pay, COBRA, Notices

The checklist at a glance

What to do, when, and which rule sets it
Item	When	Rule or source
Final paycheck	By your state's deadline. Some states require it on the last day.	No federal deadline. The U.S. Department of Labor (DOL) says some states require immediate payment. See final paycheck laws.
Unused vacation	With the final paycheck, where state law or your policy requires it	Federal law does not require paying for time not worked. State law and your written policy decide. See unused PTO payout.
Benefits end date	Confirm before the last day	Your plan documents and insurer set the date coverage ends. Tell the employee in writing.
COBRA notice to the plan administrator	Within 30 days after employment ends	Federal COBRA, for employers with 20 or more employees. See when you need to offer COBRA.
COBRA election notice to the employee	Within 14 days after the plan administrator gets your notice	The employee then has at least 60 days to elect coverage.
State unemployment notice	At separation (see the state table below)	California, New York, New Jersey and Illinois each require one.
Equipment and system access	On or before the last day	Your security policy. Remove email, SSO, payroll and code access the same day.
Final expense reimbursement	With final pay or on your normal expense schedule	Your expense policy. Ask for open receipts before the last day.
W-2 address	Confirm before the last day	The W-2 is due by January 31 (February 1, 2027 for 2026 wages). If the employee asks for it, give it within 30 days of the request or of the final wage payment, whichever is later.
Personnel file	Keep at least 1 year after an involuntary termination	Equal Employment Opportunity Commission (EEOC) rule. Payroll records: 3 years. See how long to keep employee records.

Before the last day

Confirm the facts: last day of work, the reason for the exit (resignation, termination, layoff), and the state where the employee works. Final pay deadlines and separation notices follow the work state. If you are ending the employment, read how to fire an employee first.
Calculate final pay: wages through the last day, any commissions or bonuses already earned, and unused vacation if your state or policy requires payout. Do not hold back wages until equipment is returned unless your state clearly allows it.
Check benefits: ask your insurer or benefits broker when coverage ends (often the last day of the month, but it depends on the plan). Note any life insurance or disability coverage that may have a conversion option.
Decide on severance. If you are offering money in exchange for a release of claims, draft the agreement now. Workers 40 and older must get at least 21 days to consider it. See severance agreements.
If several people are leaving at once, check whether a federal or state layoff notice law applies. See WARN notice.
List every system the person can reach: email, single sign-on, payroll, bank, code repositories, shared drives, customer tools, company cards. Plan who switches each one off and when.

On the last day

Hand over the final paycheck if your state requires same-day payment, or tell the employee exactly when and how it will arrive.
Give the state unemployment notice and a written note of when benefits end.
Collect the laptop, badge, keys and company card. For remote employees, send a prepaid return kit and a deadline.
Remove access at the agreed time. Transfer ownership of files, shared accounts and customer threads to a named person.
Hold a short exit conversation if the employee is willing. Ask what worked and what did not. Keep notes factual.
Agree how references will be handled. Many companies confirm only dates of employment and job title, and route every reference request to one person.

State unemployment notices at separation

Many states require you to tell a departing employee how to apply for unemployment insurance, whatever the reason they left. These are the rules for four states with a named form or pamphlet. Check your state's workforce agency if you have employees elsewhere.

Unemployment notices, verified on each state agency site
State	What to give	When
California	A written notice of the change in the employment relationship, plus the Employment Development Department (EDD) "For Your Benefit" pamphlet (DE 2320)	Immediately when someone is fired, laid off, takes a leave of absence or changes job status
New York	Record of Employment (Form IA 12.3), completed	To separated employees, so they can apply for benefits
New Jersey	Instructions for Claiming Unemployment Benefits (Form BC-10), completed	At the time of separation, permanent or temporary, for any reason
Illinois	The "What Every Worker Should Know About Unemployment Insurance" publication	When a worker is laid off for 7 days or more or leaves the payroll for any reason. If you cannot hand it over, mail it within 5 calendar days of separation.

After they leave

COBRA: if you have 20 or more employees and a group health plan, notify the plan administrator within 30 days of the end of employment. The administrator sends the election notice within 14 days of hearing from you. If you are under 20, check your state's continuation law.
Payroll: make sure the employee is removed from the next payroll run, recurring deductions stop, and any final reimbursement is paid.
W-2: keep the address current. You may give the W-2 any time after employment ends, and no later than the January deadline.
Records: keep the personnel file at least one year from the termination date (longer if a discrimination charge is filed), and payroll records for three years.
Update your org chart, open approvals and any workflows that named the person.

Common mistakes

Paying final wages on the next regular payday in a state that requires payment on the last day.
Forgetting the state unemployment notice because the employee quit. In New Jersey and Illinois the duty applies whatever the reason for leaving.
Assuming the insurer handles COBRA. The employer still has to tell the plan administrator that employment ended, within 30 days.
Leaving access open for a day or two "to wrap up". Switch it off at the agreed time and give a named colleague what they need.
Using final wages or accrued pay as the payment for signing a release. A release needs something the employee was not already owed.

Common questions

Do I have to pay out unused vacation when someone leaves?

Not under federal law, which does not require pay for time not worked. Some states require payout and others let your written policy decide, so check the employee's work state. See unused PTO payout.

Do I have to send a COBRA notice if the employee quit?

Yes, if COBRA applies to your plan. Any end of employment other than for gross misconduct is a qualifying event, whether the employee quit or was let go.

Can I keep the last paycheck until the laptop comes back?

Treat final wages and equipment as separate issues. Pay final wages by the state deadline and recover equipment through a return kit and a clear deadline. Before deducting anything from final wages, check your state's wage law.

How long do I keep a former employee's file?

Under EEOC rules, at least one year from the date of an involuntary termination, and payroll records for three years under the Age Discrimination in Employment Act. Other laws set longer periods for some records.

How MambaHR handles this

When someone leaves, MambaHR removes their system access, works out final pay under the state's rules for a person to approve, and prepares the COBRA continuation notices. It drafts the separation paperwork and turns the exit into a payroll change for your provider or Deel-managed payroll (Powered by Deel). Terminations always go to a person, and every step is logged.

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Sources

Last reviewed October 2, 2026. This page is general information, not legal advice. Laws change and exceptions apply, so check the sources above or an employment lawyer before you act on a specific case.