7. Early termination process + (Unpaid & Parental Leave + ACC benefit)
Scenario | Suggest Outcome |
Employee leaves employment. | Enters early termination process and settles outstanding salary sacrifice commitments. |
Employee enters short unpaid leave, parental leave, or ACC benefit. | Employer and employee discuss the situation. Employer is willing to pause salary sacrifice due to proposed period away from work being short. Salary sacrifice is paused until employee returns to work. |
Employee enters long unpaid leave period, parental leave or ACC benefit. | Employer and employee discuss the situation. Employer is not willing to pause salary sacrifice due to proposed period away from work being too long. Employee enters early termination process and settles outstanding salary sacrifice commitments. |
Please note that if the employee is not leaving employment, the method for them to settle their salary sacrifice commitments is through using introduced funds. Note being there is no tax benefit due to this being from the employee's account or net leave balance.
Workride Early Termination Process:
Resolution 1: Employee opts to settle outstanding gross salary sacrifice.Notification: Employee is leaving employment or has had their employment terminated.
Employer action: Employer reviews and applies the early termination procedure, which involves:
Acting in alignment with the early termination clause in the salary sacrifice agreement where the termination fee is equal to the outstanding gross salary sacrifice.
The employee can settle the outstanding amount from their final net pay or leave balance. The employer must receive confirmation from the employee that they accept the planned deduction.
In some cases, the employee may also need to make a payment to the employer from their personal funds if their final pay is not sufficient.
Employee Settled: Once the employer confirms the employee has satisfied their internal requirements, Workride will release ‘Next Steps’ options to the employee.
Successful resolution: Employee accepts ‘Next Steps’ options from Workride.
Resolution 2: Employer opts to reassign or re-purpose the ride benefit. Notification and attempted resolution: Same initial steps as Resolution 1. In some cases an employee may refuse to settle the outstanding salary sacrifice.
Employer review: An employer may review whether to write this outstanding salary sacrifice amount off, or request Workride support.
Employer requests Workride support: The employer may contact Workride for assistance in re-assigning or repurposing the ride equipment.
Workride actions: Workride may under the request of the employer:
Re-assign the ride equipment lease to another employee, preparing the necessary lease and salary sacrifice agreements.
Gift the ride equipment to the employer for internal business purposes.
If this gifting occurs, the employer is then able to do what is desired with this equipment.
Eg. This may become a 'pool' bike/e-bike for general use, or simply be sold to recover any outstanding cost associated with this ride.
Q: We had concerns about how to handle things if someone leaves early?
A: This situation is very rare—out of 1,000+ riders, it has only occurred 4 times. In each case, the employee fulfilled their contractual obligations and settled the remaining balance directly.
To manage this proactively, here are some strategies other organizations use:
- Eligibility Period: Offer the program to employees who have been with the company for 6–12 months to ensure a proven working relationship.
- Spending Limits: Limit the bike’s cost to a percentage of the employee’s annual income (e.g., 8–12%) to improve the likelihood that their final net pay could cover any remaining balance in the event of early departure.
- Legal Structure: Our program includes a robust legal framework that protects the employer, ensuring that any outstanding costs can be recovered. This structure minimizes risk and provides clarity for both parties.
By implementing these measures, employers can feel confident in offering this benefit while maintaining financial security.
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