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Dismissing an employee vs. leave of absence

If your benefits are managed by Gusto, dismissing an employee will also terminate the employee's health benefits. Make sure to keep the employee active if they are not truly dismissed.  

You would dismiss an employee who you do not expect to return to work. You would "furlough" or put someone on a "leave of absence" if they are taking a temporary leave and expected to return. Read more below on how to handle the two. 

Dismissed employees

Once the employee is dismissed, they will stay in your account under the list of dismissed employees but you will not be charged for them on your monthly Gusto invoice moving forward. A dismissed employee will also trigger our system to dismiss their benefits. 

Terminations with insurance carriers may take several processing days. To avoid overpayment on your insurance invoice, make sure to dismiss the employee in your Gusto account as soon as possible. 

Any premium overpayment will be processed by the insurance carrier and credited back to you on the following month, given that the carrier has processed the termination by the time the new invoice is generated. 

Furlough / Leave of absence

If your employee is taking a temporary leave, you can skip the employee on each payroll that they're on leave. If you have benefits, the system will recognize each skipped payroll as a missed deduction. When the employee returns to work, we'll apply deduction corrections to capture the deductions that were lost during the employee's leave.

Keeping them active but skipping them on payroll will ensure that their benefits remain active while removing them from payroll. 

Payroll, benefits, HR and more.