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How to Compliantly Terminate an Employee

Terminations are one of the most challenging times for an organization. It is important that the organization pays attention to their legal responsibilities. Otherwise, they might be looking at penalties for noncompliance or lawsuits that can result in damages of tens of thousands of dollars.

In the absence of an employment contract, the employment “at-will” doctrine allows an employer to terminate an employee for any reason or no reason at all without notice, as long as it is not discriminatory.

But There Is No Guarantee That an Employee Won’t Call an Attorney or File a Claim with the DOL.

While you can’t eliminate that possibility let’s discuss all the ways to reduce the possibility by taking proactive steps before, during and after termination.

What should I do before terminating an employee?

Terminating an employee is one of the least favorite tasks for a Manager. It is wise to consider other actions you can take as part of a fair and transparent performance management system to help rectify any performance issues that lead up to termination.

  1. An approach of coaching and counseling the employee that includes goal setting and establishing objectives for the employee to achieve is a good start.

  2. Get performance feedback and assess the employee’s progress.

  3. Performance improvement plans will provide a corrective action process that includes required documentation that will serve as a paper trail if termination becomes necessary.

All this information, carefully documented to file, will help protect you in the case of any claims brought by the employee should termination be the result.

How do I tell an employee they are being terminated?

Once you have decided to move forward with a termination you will want to make plans to notify them. A face-to-face meeting is always preferable. However, legally you are able to terminate an employee over the phone or video conference as long as the employee doesn’t have a disability that makes these options unreasonable.

Conducting the termination meeting

When conducting the termination meeting, you will want to be brief, but it is important to communicate:

  • The purpose of the meeting

  • That you performed a thorough investigation and have reviewed documentation regarding the situation

  • A clear reason for the termination

  • The effective date of termination

  • That the decision is final

  • How benefits will be impacted

  • Plans for collecting company property.

In most cases the immediate supervisor should conduct the meeting, as they are most familiar with the reasons for the discharge and know the employee best.

It would be helpful to have an HR representative present to explain the details of things like final pay benefits, company property, unemployment benefits, severance, if applicable, and exiting the building. There should always be two representatives in the meeting to be sure that if the termination is debated, there is a witness as to what went on. All of the above should be documented to file for possible referrals for any future claims of misconduct by the employee against the employer.

How do I get company property back from a terminated employee?

To ensure your employee returns company property upon termination of employment, it is wise to have a process for tracking what items you issue to workers. This should occur on the first day of hire during Orientation and should be kept on file and referred to upon termination of employment.

How should I tell other employees about the termination?

Announcing an employee termination requires a careful balance between confidentiality and transparency. The right approach can bring your team closer together so consider these steps for the best outcome:

  • Share the fact that the employee has left and then discuss the transition plan.

  • If employees ask for more specifics, tell them that it is company policy not to release personal information.

  • Quickly address any rumors by speaking to the person(s) behind them to understand what their concerns are.

And finally, create a termination checklist that will help you remain compliant through any termination. Documentation for all of the above is the key to any retaliation that may come from the employee. Without that, there is no factual evidence of why you terminated an employee and can lead the way to discrimination claims of unlawful terminations.

If you have any questions, please reach out to PMP.


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