Employee Status: Should I inactivate or terminate an employee?

It is best practice to terminate an employee in the system. You can always rehire or undo the termination. The employee information does NOT get purged out of the system.

Inactive is mainly for seasonal employees where the employer needs to track who is seasonal (ACA reporting treats Inactive as Active in calculating the FTE so best to Terminate if you are near ACA threshold).

Keeping your employee list accurate will:

• Prevent accidently paying an employee no longer working
• Keep employee reports accurate based on actual active employees (important for ACA reporting)
• Minimize any additional payroll fees
• On the employee list, click on the funnel icon next to the STATUS column header.
• Click SELECT ALL, then click OK - this will show you all employees listed in the system, regardless of their status.

Need to terminate an employee? Watch our tutorial video here.

In order to see information for employees with a terminated or inactive status, navigate to EMPLOYEE MANAGEMENT > EMPLOYEE MAINTENANCE > GENERAL.