There are a few reasons why you may be charged for a terminated employee on an invoice:
Charges for platform fees
If you’re charged monthly platform fees, the fees are charged based on your employees’ employment status on the first of the month. You can avoid charges for terminated employees by terminating them in the portal before the first of the month.
For example: Let’s say an employee is terminated on the 5th of the month. Since we already generated your invoice for the current month, you’ll still see a platform fee for the terminated employee. On your next month’s invoice, the terminated employee is removed and you aren’t charged a platform fee.
Charges for spending account usage
Spending account usage is charged for terminated employees if:
You offer a grace period and the employee still has money left in a spending account: The employee can continue to submit claims until their grace period ends.
For Example: Imagine a terminated employee has $50 left in their Lifestyle Spending Account (LSA) and you offer a 60-day grace period. The terminated employee has 60 days after their termination date to spend the money left in their LSA. The employee spends the remaining money the week after they’re terminated, and you see a $50 LSA usage charge on your next invoice.
The employee submits claims to their spending account just before they are terminated: You’ll be charged spending account usage for any claims submitted before the employee was terminated.
For Example: Imagine an employee submitted a claim to their LSA on December 15th for $50. The employee is then terminated on December 20th. You’ll see a $50 LSA usage charge on your next invoice.
Charges for spending account deposits
Spending account deposits are held for every employee with allocations to their spending account(s). A charge or credit for the deposit will be listed on your invoice monthly, based on the total spending account allocation at the beginning of the month. If you offer a grace period, the grace period starts when an employee is terminated. You’ll receive a credit for a terminated employee’s spending account deposit after they finish the grace period.
If you don’t offer a grace period and terminate an employee, you’ll receive a credit for their spending account deposit on your next invoice. Learn more about credits for spending account deposits.