Firing an employee is a tough decision for any business owner. Make sure to do it the legal way. No one likes to fire an employee. You may be concerned about hurting the feelings of a likable, yet unproductive, worker. You may know how financially devastating it will be for a hard worker that you can no longer afford to pay. Or, you may be worried about a violent response to the news of termination. Regardless, there are government regulations to comply with and firing procedures that you will want to follow to avoid perils, such as getting sued.
Do you have a legal reason for firing the employee?
Termination is usually due to job performance or your business’s need to reduce the number of employees. But firing an employee is not that simple.
Be sure employment is “at will”
Most employment in the U.S. is “at will.” That means an employee can quit or you can fire an employee at any time, with or without a reason. However, there are laws that protect employees from unfair dismissal due to discrimination, and you could face the time and cost of a lawsuit.
Will the firing be discriminatory, or look like discrimination?
To legally fire an employee, be sure that the firing could not be considered discriminatory. There are federal laws that protect workers from being fired due to age, gender, race, disability, genetics, national origin, or religion. In addition, your state may protect other groups or apply the laws to businesses with fewer employees (e.g., federal law applies to businesses with a minimum of 15 employees vs. Ohio’s minimum of four).
More unlawful reasons to fire an employee
There are other reasons that a firing may be considered unlawful. For example, an employee cannot be fired for making a legitimate report to OSHA (Occupational Safety and Health Administration)–sometimes referred to as being a whistleblower. Also, employees who take time off to serve jury duty, perform military service (protected by USERRA military leave), or take medical leave are also protected.
Can you fire someone for behavior outside of the workplace?
Yes, you can … sometimes. For example, do you know someone who was fired for things they posted on social media?
As an employer, you are within your rights to fire an individual who violates your business’s code of ethics even if it is offsite. You expect your employee to operate in the company’s best interests, on or off the clock. Also, any illegal actions performed outside of work can be cause for termination. It boils down to this: if you feel there is just cause for the employee to be terminated for outside conduct which is damaging to your business, you can fire them.
Your state may have restrictions to follow, and there is always the chance that the employee will sue you. Depending on the nature of your business, you may want to create an employment contract that stipulates your expectations for off-duty behavior. It is also a good idea to address these concerns in your employee handbook.
How to fire an employee
It shouldn’t be a surprise to the employee when they are fired for poor performance, as long as you have been communicating your concerns. On the other hand, if you have to let an employee go because business is bad, they could be blindsided.
Check your records
If you are terminating an employee for cause, it is important to have a record of the individual’s behavior in their employee file. Helpful items kept in an employee file include performance reviews, anecdotal notes of any infractions, efforts to help or re-train the employee, disciplinary actions, etc. You may want to create a cheat sheet with some of the dates or details, in case you need to refer to the record during the termination meeting.
If you have information in your employee handbook regarding the employee’s behavior or the employee termination process, be prepared to share the information when you meet with the employee.
Do your homework
Try to anticipate questions and have the answers or resources for the employee. Be prepared! What are your state’s requirements, and when will the employee receive their final paycheck? Does the employee have duties or unfinished work that needs to be reassigned? What’s the cost of firing an employee going to mean for your team? Determine the employee’s last day (e.g., today, Friday, one week, etc.). In case it differs from federal regulations, does your state require you to offer continuation of insurance coverage (COBRA)?
Decide upon a time and place
If the employee has a private office with a door, that will likely be the best place to meet. The employee will feel the most at ease, and you can leave the room when the conversation is over. You will want to keep the conversation short; usually around 15 minutes. The private space also gives the employee a chance to regroup before facing customers or coworkers.
If the employee does not have a private office, you can use any other private place for the conversation.
When deciding what day to meet with the worker, consider your other employees. If a fired employee stomps out of the building late on a Friday, will the rest of your staff be wondering if they will be next? A weekend of unanswered questions could result in a somber, unproductive Monday.
If you anticipate that the employee may become argumentative or possibly violent, you may want a witness, or even the police, to be in attendance when you fire the employee.
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Be respectful and avoid arguments
Get to the point right away rather than making small talk. For example, it would be awkward to laugh together about a recent event just before telling the employee it’s their last day of employment.
Be very clear–don’t try to soften the blow with vague statements like “I think I’m going to have to let you go.” Firmly and respectfully state the fact that you are terminating their employment, and the date the termination is effective. Any hesitation or vagueness on your part may encourage the employee to try to talk you out of it.
You won’t want to list the good things about the worker either. Remember that if the employee chooses to fight the firing in court, your words could be used against you. Just stick to business and give the employee the necessary information about final compensation, unemployment, COBRA, etc.
Some bosses feel guilty when they fire someone and worry about taking away the employee’s livelihood. In reality, the employee is just as likely to land on their feet. After getting fired, many workers have gone on to find their niche and success.
Loose ends
After you’ve notified the employee of termination:
- Remember to collect any keys, uniforms, devices, etc.
- Confirm that all duties and unfinished work are being covered by others.
- Notify your healthcare provider that the employee will be wanting COBRA coverage.
- Be aware of the effect the firing has had on morale for your remaining workers.
Other considerations during the employee termination process
The U.S. Department of Labor website offers up-to-date information about the regulations protecting employees, including the Fair Labor Standards Act (FLSA) and termination. Your state website will cover any additional legal requirements you need to obey. You also may want to consider the following to avoid unnecessary lawsuits:
- Some employers have the terminated employee sign a release form that states that the reason for dismissal has been explained.
- You must tell the employee that they may be eligible for unemployment benefits. If the employee applies for unemployment, it may be in your best interest to not fight their request.
- Keep their personnel file, in case you need to defend your actions.
Disclaimer: Each situation is unique, and your state might have its own regulations and red tape for firing employees. Use this list and the supplied links as an overview of the employee termination process.
When an employee is fired, you’ll need a safe way to retain their payroll history. Patriot offers you a simple, accurate, affordable solution–online payroll software to keep those records as well as run payroll for your remaining employees. Try it for free!
This article has been updated from its original publication date of July 8, 2016.
This is not intended as legal advice; for more information, please click here.
