Employee Terminations: How to Remain Compliant
Have you ever been faced with a situation where you had to terminate an employee and were not sure how best to do it? Have you struggled with how to protect your organization against potential liability or wondered how your organization can help departing employees with their transition? In short, what’s the best way to conduct a “successful” termination? Here are five ways:
1.) Gather the documentation
For terminations related to performance, be prepared to explain the reasons for why the person is being let go and have all the necessary supporting documentation. This may include signed previous written warnings, time records, which are helpful if there was an issue with attendance or punctuality, or any additional pertinent information related to why the employee is being terminated.
2.) Handle with care
When the news has to be delivered, get to the point quickly and concisely. Speak with respect and compassion. Also, have a witness present, typically someone from HR, to document the conversation and confirm what is said and by whom–this way, it is not one person’s word against another.
Each employee’s reaction will always be unique, and may go from one emotional extreme to another. Deal with it calmly without adding your own emotions into the mix—this is a business decision. Be understanding and listen to what they have to say. People who feel they’ve been treated fairly with professionalism and respect may be less inclined to file a claim or complain or to spread negative comments about your organization.
If the manager has made efforts to address performance issues as they occur, terminations should not be a surprise to the employee. If the manager does anticipate the employee will be surprised, extra caution and review should apply prior to making the decision.
3.) Review federal and state law requirements
Federal and state laws are in place with regard to when and what to pay a terminated employee. For example, certain states require that an employee that is terminated needs to receive their check on their last day for all final hours owed plus any accrued and unused vacation time. Other states do not require that accrued and unused time off be paid upon termination. Confirm this information in advance of all terminations with a qualified attorney or HR professional.
4.) Establish the messaging
How will you tell your employees that a fellow colleague has been let go? Make sure your messaging is prepared beforehand, and is consistent with the message handed down by the company’s leaders. Avoid sending mixed messages or conflicting information to your workers which might lead to confusion, fear of layoffs, and a decrease in employee morale and productivity.
5.) Offer outplacement services and consider severance
When a termination is not due to poor performance but is a position elimination or is part of a larger reduction in force, it’s a good idea to offer outplacement services which can assist terminated employees in finding new employment. These services range from preparing resumes, to interviewing tips, and job offer evaluation. It also demonstrates your organization’s compassion and commitment to workers, even as they are leaving.
If providing severance is the company’s custom or policy, or if it is likely that the termination will be contentious or could lead to post-termination litigation, it may be worthwhile to consider providing a release agreement in exchange for obtaining a release agreement.
Employee terminations are an every day part of running a business or organization that has employees. Taking appropriate, well-planned steps in advance, can lessen the impact to the employee and reduce risk for the employer
David Edelson is a Senior Human Capital Consultant at TriNet. He has over 15 years of HR experience.