As a business owner, you know that resignations are part of the journey, and handling them right is key to keeping things on track. Imagine this: your marketing executive tells you they’re resigning. What’s next?
No worries—here’s everything you need to manage a smooth employee exit, from handling the notice period to preparing the final paycheck, along with all the essential documents and compliance steps. Let’s break it down step by step.
Step 1: Within the First Week
Once you’ve received a resignation, start with a casual conversation. This is your chance to understand why they’re leaving, address any concerns, and discuss how their resignation will be managed.
Next, ask for a resignation letter to officially document their intention to leave. Once you have it, check their remaining leave balance and discuss how it will be handled—whether it will be paid out or offset against their notice period. If either party prefers to pay off the notice period instead, make sure to document it clearly.
Finally, acknowledge their resignation in writing and confirm their last working date to avoid any misunderstandings.
Step 2: During the Notice Period
The notice period is all about preparing for a smooth transition. Keep the team informed, and responsibilities are properly transitioned so nothing gets overlooked. A well-organized handover helps everyone adapt quickly and keep things running seamlessly.
Here are some steps for an effective handover:
Having the resigning employee document their key responsibilities, ongoing projects, and important contacts.
Assigning a temporary or permanent replacement for their tasks.
Conducting a handover meeting to ensure the new person understands their role.
Setting a timeline for completion of the transition process to avoid any last-minute surprises.
A solid handover plan makes all the difference. With everything laid out, your team will stay on track and ready to move forward.
Step 3: Within the Last Week
In the final week, it’s all about tying up loose ends. One key step is ensuring all company-owned assets are returned and accounted for. Items to collect may include:
Laptops, mobile phones, and office equipment.
ID cards and access passes.
Uniforms, documents, or any other company property.
To keep things transparent, have them sign an asset handover form confirming that everything’s been returned.
This is also the perfect time to conduct an exit interview. While not mandatory, it’s a valuable opportunity to gather honest feedback, uncover areas for improvement, and refine your retention strategies.
Compliance Steps with Statutory Bodies
During the last week, it’s crucial to update the relevant statutory bodies to remain compliant:
EPF (KWSP): There’s no special form required.
SOCSO (Perkeso): Update the employee’s resignation date on the ASSIST portal. Click here for more information on how to use the portal.
LHDN (Tax Department):
Submit Form CP22A through the MyTax portal within 30 days of the employee’s last working day to notify LHDN of their resignation.
Step 4: Final Paycheck
While you’re getting the final paycheck ready, there are a few things to keep in mind to make sure everything’s accurate and fair. Here’s a quick checklist:
Unpaid salary (if any).
Payment in lieu of notice (if the employee is not serving their full notice period).
Encashment of unused annual leave.
Deductions (e.g., salary advances, loans, or company property not returned).
EPF (KWSP), SOCSO (Perkeso), and PCB tax deductions in the final salary payment.
Remember: According to Malaysia’s Employment Act 1955, the final salary must be paid within 7 days of the employee’s last working day.
Post-Employment Documents
EA Form: Provide this by 31st March of the following year. It summarizes the employee’s total earnings and tax deductions for the year.
TP3 Form: Issue this after the employee’s last day if they request it for their next employer. It helps ensure accurate Monthly Tax Deduction (MTD) calculations at their new job.
Conclusion
Managing resignations effectively ensures a smooth transition and helps avoid potential legal issues. By handling the necessary paperwork and following these steps, you’ll stay compliant and uphold a strong reputation as an employer.
[Free Download] Employee Exit Checklist
Handling an employee resignation can feel overwhelming, but you’re not alone. Download our free Employee Exit Checklist to keep everything organized and ensure a smooth exit process.
Need Help? We’ve Got Your Back!
Want it even easier? Talk to us for a free consultation. We’ll guide you through the process—or better yet, let us take care of it all for you! Contact us today at 📞+6 010-277 0718 or 📩 info@synergy-outsourcing.com for more information.
