Being a working professional exposes people to many different situations. It is almost impossible for every situation to be a positive interaction. As people rise to management or leadership roles, the frequency and scope of less pleasant interactions increase as well.
Employee termination, in particular, can be challenging for new entrepreneurs and business leaders. For many, however, the idea of firing an employee isn’t uncomfortable just because it is a difficult conversation. Some may be prudently scared of miscommunication or mishandling resulting in legal (and social) blowback. Read on to discover more about terminating employee relationships the right way.
Business leaders and workforce managers, quite rightly, are always wary of conversations involving termination. If termination is handled correctly under all laws, regulations, and internal policies, it can be a very smooth transition for all parties involved. However, a poorly handled termination could quickly backfire.
For example, terminating an employee with mental health issues may well result in backlash from customers, vendors, and even affiliates. More often than not, employers have to deal with expensive lawsuits involving wrongful termination.
The Importance of Following an Employee Termination Checklist
Wrongful termination suits are a very real concern. Even a correctly handled termination could be quickly followed by a frivolous lawsuit. Whether or not a lawsuit results in a penalty or settlement, the legal costs of defending it alone can be a significant expenditure. How should an employer or workforce manager navigate a situation with such a propensity to spiral out of control?
There is no one-size-fits-all solution. Like any other business decision, there may be many variables unique to a business model, culture, policies, industry standards, laws, regulatory requirements, and sudden changes like COVID-19, not to mention the employee in question.
For example, Amazon’s employee termination policy for a senior financial professional may be vastly different from that of a brokerage firm terminating multiple temp workers sourced through mortgage staffing agencies.
Even so, a safe and informed approach will always be structured, precise, and standardized. Generally speaking, an employee termination checklist should at least include the following:
- Converse: Speak to the employee in question, especially about the reasons for termination.
- Recover: Take back possession of any hardware and documents in the employee’s possession.
- Revoke: Take back authorization to access systems or databases.
- Document: Make sure each stage of the termination process is properly documented.
- Interview: Acquire feedback and insights through an exit interview.
- Inform: Let the rest of the workforce know about the termination.
- Update: Make sure the termination is reflected in payroll and HR records.
- Settle: Set a date for the employee to collect their final settlement paycheck.
- Comply: At every stage, make sure the process is in line with laws, regulations, and policies.
Keeping in Compliance State and Local Laws
Following internal HR policies and guidelines is mandatory for any interactions within the workplace. However, when it comes to termination and many other sensitive workforce situations, internal policies are not enough to manage them.
To discourage exploitative practices in workforce management, most countries have federal or national labor laws and regulatory bodies. In the United States, for instance, state and local laws will always be a major factor.
Moreover, while federal laws apply across the country, state and local laws will also apply based on where a business is located. This is a very important distinction since labor rules and regulations may vary from state to state. Take the differences between New York and Texas for example:
Complying with Texas Employee Termination Laws
The state of Texas follows the “employment at will” reasoning. Under this approach, both employers and employees are entitled to terminate their relationship at will. From an employer-specific angle, this means employers can fire workers at any time based on a legally sound reason, following an extensive workplace investigation process.
However, this does not in any way mean that an employer can terminate a worker’s employment for any reason whatsoever. The legality, particularly in terms of whether something relates directly to work and performance, is very important. This indicates terminating a worker because of reasons not strictly legal or concerning their work, such as termination motivated by hiring bias is illegal.
Complying with New York Employee Termination Checklists
The state of New York has a far more relaxed approach concerning valid and rightful terminations. Unless a worker has a specific contract, employment at will is still applicable.
However, employers are entitled to dismiss workers for any given reason. In certain cases, an employee may even be fired without any fair reason. In other words, fairness is not a prerequisite for the validity of a decision to terminate workers.
Correctly Handling and Conducting Terminations
The finality of the word “termination” can often have a psychological impact on all parties involved. The increased emotional stress is a big reason why both employers and employees are so wary of an employee termination process. However, this wariness is unfounded, since termination in the professional world is hardly the equivalent of capital punishment.
In the simplest terms, it is simply the end of a professional relationship between certain parties. Barring any issues of illegality or predatory behavior, both parties are still free to seek other options for this relationship. Nearly every human relationship works the same way.
That being said, handling a termination is a bit more complex because of the professional setting. People may not be able to sue a romantic partner for leaving them, but they can sue an employer based on what they feel is a wrongful termination. This may even become a highly-visible undertaking, impacting a firm’s chances to attract the kind of candidates that their talent acquisition plans are designed to the source.
To avoid expensive legal ordeals and potential litigation in the future, doing things by the book is the most prudent approach. Employers that don’t already have a defined termination process can build on the following points:
Create a Transition Plan
The planning phase is key to the entire process going smoothly. Workforce managers should decide the time and date through deliberation, instead of impulsive, on-the-spot decisions. The decision should always have a rational basis to it.
There must also be an empathic component; firing an employee at the end of the week can trap them in personal turmoil for the following two days. Doing it at the start or the middle of the week can give them a head start on looking for a new employer.
Airtight Grounds for Termination
The grounds for dismissal are very important in determining whether the dismissal was wrongful or fair. They must also be airtight and sound from a legal perspective as well. Dismissing an employee based on rumors of workplace bullying may not be safe as terminating their employment following a well-documented workplace investigation.
Conduct the Discussion Correctly
The termination discussion with an employee also requires careful thought and planning. Failure to follow protocol at this stage is usually how employers mishandle termination processes.
Remember: while it is uncomfortable, termination is usually an irrevocable decision. There is very little an employer can do in terms of counseling at this stage, especially when business interests should be given top priority. At best, employers and workforce managers can try:
- Be brief and announce the termination at the start of the meeting.
- Be empathic but firm on the gravity of the termination decision.
- Make it clear that the decision will not be revoked and leave no ambiguity.
- Dedicate time to let the employee express their reaction.
- Define the “What Now” precisely, in terms of paychecks, vacation time, etc.
- Remain gracious and polite when ending the conversation.
Frequently Asked Questions
How to terminate an employee?
Follow company policies, industry regulations, and all applicable laws.
Can an employee be terminated while on medical leave?
Yes, if the termination would happen regardless. But not because the worker took a leave.
How to terminate an employee for poor performance?
Follow a standardized procedure, have supporting evidence, and make the process quick.
How long to keep employee files after termination?
Varies based on business nature, the role occupied, and the reasons for termination.
Can a company terminate a pregnant employee?
Yes, but not based on the employee’s pregnancy.
Can an employee be terminated while on short-term disability?
Yes, short-term disability leave is not protected under FMLA.