How do you know it’s time to terminate an employee? If there were a single answer to this question, every business owner and HR professional would know it by heart. But no such answer exists. Ultimately, you will need to decide what deserves termination within your business. But in creating your guidelines for termination, you must:
Terminable offenses vary, so you must decide what warrants termination at your company. Some companies use four behavior categories to gauge terminable offenses.
You may use these four categories to create termination guidelines for your business. By building policies and following them consistently, you implement practices that avoid lawsuits for unfair dismissals.
In the United States, most workers are “at-will” employees. Theoretically, you can fire employees for any reason. But government regulations and case laws have altered what it means to be an at-will employee.
In reality, you can fire employees for any reason that is not a protected reason. Poor performance, for example, is not a protected reason. It remains an employer’s right to terminate employees for non-protected reasons.
However, the list of protected reasons for which employers cannot fire employees is growing. The list protects workers from retaliation or discrimination if they participate in protected activities and express protected characteristics. So review state and federal laws or consult an HR professional regularly.
When you fire an employee, keep in mind that they have a right to receive their final paycheck. Federal law doesn’t require employers to issue last paychecks immediately, according to the U.S. Department of Labor, though state laws may vary. Depending on the circumstances, employees may also have a right to continued health coverage, severance pay, or a PTO payout.
Otherwise, you can’t terminate workers on the basis of certain protected activities or characteristics. Terminating a worker on the basis of protected activities or characteristics alone may result in an unlawful dismissal lawsuit.
Protected characteristics include:
Protected activities include:
Several federal laws protect employees from unlawful termination, including:
These laws and regulations protect employees against unlawful termination and discrimination. Employee rights under these laws supersede company policies and procedures. And if company policies prohibit protected activities, you cannot fire an employee for participating in the protected activity. State and local governments also use similar or more restrictive laws to protect employee rights against unlawful termination.
To fire an employee legally, you must terminate the employee for a lawful reason and carry out the termination without violating their rights. It helps to review your company policies and follow a termination protocol. You don’t want to run afoul of employment laws and government regulations. Penalties for unlawfully terminating employees can include reinstatement, back pay, and treble (triple) damages in some instances.
Company policies allow you to set expectations with employees regarding acceptable behavior, company property, and interactions with business partners. You should address fireable offenses that you don’t cover in an employee’s performance reviews in your employee handbook. Anti-harassment policies, core values, codes of conduct, and IT policies may apply to a termination.
You should require all workers to read and acknowledge your company policies when they join your workforce. Review company policies with workers regularly and whenever you update a policy. Ask workers to sign off on new and updated company policies as part of your company record-keeping procedure. When workers sign off on new and updated policies, you have a record that verifies that they understand the policies.
A written record of employee violations is critical if you need to take disciplinary actions against an employee. Documenting an employee’s behavior, and sharing that documentation with them, ensures you and your employee are aware of underperformance or policy violations. A clear record of violations can help you communicate that you’re not terminating an employee for engaging in protected activities or expressing protected characteristics.
Whether it’s a minor verbal correction or final written warning, you must communicate disciplinary actions to the employee. Think of it this way: If you didn’t communicate the disciplinary action to the employee, it didn’t happen.
In some cases, managers communicate performance problems or company violations to HR personnel. But if the feedback doesn’t get back to the employee before they’re terminated, they may accuse the managers of misconduct or unlawful dismissal. And that’s hard to disprove to a government agency or jury.
When you think it’s time to terminate a worker’s employment, you might follow this eight-step termination process.
Whenever you have to terminate an employee, your goal should be to end things on the best possible terms. As you prepare to terminate an employee, ask yourself, “How do I want them to speak about the company after they leave?”
If you are hostile or combative while terminating an employee, they may not speak positively about your company online or to others. Future employees will be looking at your reputation in the market and among your workforce. So your separation from an employee is a key moment for your company’s reputation.
When you’re ready to have the conversation, follow a script. You should have identified a lawful reason to terminate the employee, so stick to that point. Be empathetic, but keep the conversation direct and on-topic. If you say too much or present irrelevant facts, you may open your company to discriminatory behavior or an unlawful dismissal lawsuit.
Terminate employees the right way. Make sure your reason for termination is lawful and in line with your company practices and government regulations. Firing employees is a stressful experience, but it’s also an opportunity to promote goodwill with former employees.
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