Today, more than ever, diversity, equity, and inclusion (DEI) play important roles in the workplace. And inclusive workplaces are good for business. They may also place greater scrutiny on hiring and firing practices. An increased focus on discrimination and acceptance reinforces that it’s important to treat employees and soon-to-be-terminated employees fairly.
When firing someone, you want to protect your business reputation and avoid a lawsuit. Learn how to fire an employee professionally and legally in 2022 so you can move on with your business in a positive way.
What’s different in 2022?
According to the National Law Review, 2022 brings renewed attention to employment discrimination legislation, which could affect your business. The main issues to be aware of include:
- An upcoming Senate vote on the Pregnant Workers Fairness Act (PWFA), which would strengthen pregnant worker protections and require employers to provide pregnant people reasonable accommodations, similar to the accommodations required by the Americans with Disabilities Act
- Renewed interest in combating employment discrimination at state and municipal levels.
Emerging issues and legislation like this reinforce that businesses must embrace diversity and provide worker protections. That means workplace sensitivity needs to be a part of your termination strategy, as well.
What are legal reasons to fire an employee?
As the National Conference of State Legislatures points out, most employment relationships in the United States are presumed to be “at-will.” This means employers may legally fire employees without cause, as long as the reason isn’t based on discrimination.
Unless the employer has agreed upon giving a certain amount of notice before letting an employee go or has a collective bargaining agreement in place, at-will termination means employers can:
- Fire an employee unexpectedly, without advance warning
- Let go of an employee without a reason for termination
What are illegal reasons to fire an employee?
What’s considered workplace discrimination? The U.S. Equal Employment Opportunity Commission outlines the following reasons:
- Equal compensation/pay
- Genetic information
- National origin
- Sexual harassment
- Sexual orientation and gender identity
If a fired employee suspects their termination is due to one of the above factors, they may attempt to file a wrongful termination claim. That’s why it’s important to keep terminations neutral and to avoid discussing characteristics or traits that could be interpreted as discriminatory.
There are various federal, state, and local laws that prohibit discrimination and address layoffs and benefits that may be available to terminated employees. Before you fire an employee, it can help to consult with an employment attorney to ensure you’re protected.
To protect your business from a lawsuit, it’s important to have a standardized process in place when you want to terminate an employee.
Before you fire an employee, it can help to consult with an employment attorney to ensure you’re protected.
What is the process of terminating an employee?
First, it’s helpful to communicate to employees that termination may occur due to a variety of factors. Include this information in an offer letter, during onboarding, and in the employee handbook. Gather employee signatures to confirm they acknowledge what they’ve learned.
Some companies give employees whose work is suffering a chance to improve their behavior. When you warn an employee that their actions go against company policy or their work needs improvement, document all communication and have the employee sign in acknowledgment. These documents can help protect you in the future, in case a fired employee wants to retaliate with a lawsuit.
When you can no longer keep the employee on staff, take the following steps.
1. Set up a private meeting
Enlist someone from the HR team, as well as the manager or person who will be letting the employee go. To prepare for a termination meeting, gather any paperwork you might need, such as a formal letter of termination (some states require this).
Keep the letter brief, factual, and neutral. It can include:
- Employee information including full name, position title, company name, and name of the person managing termination
- The employee’s dates of employment, with the last day typically being the date of the meeting
- Reason for employee termination, including dates of warnings if the termination is for cause
- Employee property that is to be returned
- Accrued paid time off that will be paid out and when
- Final paycheck/severance information
- Health insurance, 401(k), and other benefits information
Research your state requirements for any other termination paperwork or documentation you’ll need. You’ll want to document the termination meeting’s proceedings, as well, and collect signatures of those who were present.
2. Understand benefits
If the terminated employee had coverage under your health insurance, you’ll want to let them know they’ll receive a Consolidated Omnibus Budget Reconciliation Act (COBRA) notification that explains how they can continue health coverage after leaving your company.
Some companies will also provide a severance pay package to terminated employees, offering a couple of weeks’ worth of pay, for example. This may benefit your business and prevent ex-employee lawsuits. In some cases, you may be able to ask for an employee’s signature verifying they won’t file a lawsuit in exchange for severance. Work with a business attorney to create this type of contract if you want to offer it.
3. Get company property back
Before the terminated employee leaves the premises, you’ll want to ensure you get back all company property. Ask for the former employee’s:
- Equipment and tools
- Computer passwords
- Access codes
In some cases, it may be appropriate to escort the employee to collect their possessions and see them off the premises.
How do you fire an employee gracefully?
It’s best to remain neutral — there’s no need to be harsh or insensitive while delivering the news.
Even when an employee leaves your company, they can still affect your business reputation, including your ability to win clients and attract top candidates to work for you in the future. That’s why a compassionate approach to firing someone can benefit both the ex-employee and your business.
First, consider the time period in which you let an employee go. Have the meeting as quickly as possible, as opposed to scheduling a meeting in the morning for the end of the day. The build-up can cause anxiety in both the employee and their team members if they talk about what may be happening. You may want to have the meeting at the very end of the day so the employee doesn’t have to pack up their things in front of their coworkers.
During the termination meeting, state the reason for the termination (due to an infraction or due to an at-will termination) so the employee can gain some closure. It’s best to remain neutral — there’s no need to be harsh or insensitive while delivering the news.
You can provide the terminated employee with any helpful information, such as their COBRA health insurance coverage information and severance pay package. You may also refer the terminated employee to outplacement services and offer them the ability to contact you and follow up if needed.
Successful termination is non-discriminatory, formal, and standardized
Your employees determine much of the success of your company. But sometimes it doesn’t work out.
When you need to let go of an employee, you can protect your business with a fair, equitable, and standardized process. Work with an employment attorney to ensure you’re protected and provide terminated employees with what they need to exit gracefully.