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Human Resources

The 10 Steps You Should Take When Firing an Employee

1. Thoroughly Outline Expectations

In order to smooth out the process of termination down the line, you should provide all of your workers with clear expectations regarding job performance, deadlines and work ethic. When onboarding new employees, outline the rules of conduct as well as expectations of the position in the Employee Handbook. Many employers choose to hire employees on an “at will” basis, since an at-will employee can be let go without warning, for any reason (except an illegal one). The key in the case of at-will employees is to make sure that you are not firing them for illegal reasons, such as discrimination or whistleblowing.

2. Provide Performance Feedback

In order to protect yourself against the possibility of wrongful termination claims, it’s a good idea to not only detail your expectations, but that you regularly provide feedback on employee performance. Hold quarterly performance reviews, but also maintain weekly check-ins and set consistent benchmarks. While it’s important to praise excellent performance and highlight areas of improvement, it’s also important not to create a connection between performance and employment, or suggest that employees will only be fired for a “good reason.” Never state that good performance leads to a guarantee of a job; this could lead to a sticky “implied contracts” down the line when firing an at-will employee.

3. Record Everything

You can give feedback in person, but you should review the main points of your discussion via email as well. Make sure that all expectations and deadlines are clearly recorded and dated. Sometimes you will need to fire an employee suddenly, but if you’re concerned about a struggling employee, it can be helpful to gather evidence of their inability to meet your well-defined requirements before you schedule the meeting to let them go.

4. Prepare for the Meeting

Set up a private meeting between you, the employee and potentially a witness to observe the proceedings. You may decide to have a witness of another gender, in order to establish greater neutrality. If you’d prefer, you might also consider a recording device for the meeting (but remember that you must ask for the employee’s consent).

Review the Employment Agreement and Offer Letter from the employee’s onboarding process to check for any termination provisions or conditions you may have missed.

5. Consider Negligence or Misconduct

You are not required to give a reason to fire at-will employees, but its still a good idea to determine if negligence or misconduct were involved. If an employee is being fired for misconduct, such as sexual harassment or drinking on the job, this will exclude them from employment benefits. Gross negligence, characterized by a willful disregard for duties, is harder to prove. Employees terminated for being ineffective, or let go due to downsizing, cannot be denied unemployment compensation and insurance through COBRA.

6. Sit Them Down and Explain

When the meeting begins, be straightforward and explain why employee is being let go. Be specific, but don’t belabor the point. Do not apologize; if they seem upset, the most you should say is “I’m sorry you feel this way.” Obviously, do not mention race, gender, sexuality or age, but also avoid talking about your feelings towards that person. Never mention if an employee has threatened litigation (read more about terminating an employee who’s filed a claim here).

If the employee is distraught upon hearing this news, allow them to leave immediately, and return later to tie up loose ends and retrieve their things. Never pack up an employee’s belongings, or you may be liable for loss or theft of their items if they go missing.

7. Review and Sign Termination Documents

If the employee was not hired on an “at will” basis—in which case either party can end the employment at any time—you will need the employee to sign a Termination Agreement (or a Mutual Termination of Contract if the decision is mutual). You may choose to have them sign a “release of claims,” in which the employee agrees to release their employer of liability; this is often in exchange for some sort of consideration.

8. Discuss Severance, Wages and Health Benefits

Many employees release the employer of liability in exchange for an offer of a reference, a referral, or in some cases even severance pay. If you choose to offer severance pay to employees, you can establish it beforehand through an official Severance Policy, or determine it during the termination process based on circumstances.

You should have the employee’s last paycheck ready to hand over during the termination meeting, and be absolutely sure to include any accrued benefits (i.e. vacation time) that they should be compensated for. Depending on the state where your business operates, you either have little or no time after termination to give an employee their final paycheck, so it’s best never to withhold their wages for any reason.

If you have more than 20 employees, you must also provide them with a General Notice of COBRA Continuation Coverage, which outlines their right to continue group health insurance coverage at their own expense. This notice must also be provided to the plan administrator within 30 days of the termination.

9. Inform the Staff

Remember that terminations affect your remaining employees. Let them know that this person will no longer be working with them, and if they have any concerns or questions they can come to you, and you’ll set up a private time to speak with them. Do not go into details about why the person was let go.

10. Prohibit the Employee’s Access

Immediately remove the former employee’s access to company records, voicemail, networks, passwords, etc. Retrieve any parking permits and company property such as laptops and cell phones. Restrict access to the office building by obtaining keys, notifying security or deleting access passcodes.

If you are still concerned you may have missed anything, consider reviewing this Termination Checklist.

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