What do I need to review before firing an employee?

When firing an employee, you need to make sure that you have documented any performance issues, checked all state and federal laws to ensure that the termination complies with applicable laws and does not violate any law or regulation, and followed all proper procedures like issuing final wages and other payments, where required. If you […]

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When firing an employee, you need to make sure that you have documented any performance issues, checked all state and federal laws to ensure that the termination complies with applicable laws and does not violate any law or regulation, and followed all proper procedures like issuing final wages and other payments, where required.

If you have entered into a contract with an employee or organization representing the employee you seek to terminate, you must first consult the contract to assess what steps need to be taken to terminate the employee. Otherwise, every state, except Montana, allows employers to choose an [at will” employment policy – meaning you can fire employees at any time. If you’re planning on firing an at-will employee, below is a list of some issues to consider:

The Importance of Documentation

The US Small Business Administration (SBA) suggests you document all performance issues regarding the employee you plan to fire. Here is a good guideline for such a process.

Despite the at will” policy, it’s still a good practice to make and retain these records to legitimize your actions and protect you against claims of wrongful termination.

Post-Termination Employee Rights

Before deciding to fire an employee, as the SBA notes, it’s a good idea to check state and federal laws to review what benefits the employee is entitled to after they’re fired. This could include:

  • Continued health insurance coverage

  • Unemployment insurance

  • Vested retirement plans

Final Paycheck

Some states require that the fired employee’s final check be paid immediately. Check your state laws to see when you’re required to give your employee their last payment.

You should also check what, in addition to their salary, is included in this final payment. For example, in California bonuses and accrued vacation are considered part of wages and must be paid out at the same time as the final paycheck, immediately at the time of termination. This [helpful answer also addresses final paycheck concerns.

When It’s Illegal to Fire Someone

Before terminating an employee, review federal and state policies to ensure that you aren’t violating any laws protecting their employment rights.

  • Discrimination: Make sure the termination couldn’t be considered discrimination. Types of employee discrimination prohibited by the Equal Employment Opportunity Commission (EEOC) include termination based on race, age, sex, religion, and pregnancy.

  • Whistleblowers: According to the US Department of Labor (DOL), you can’t fire someone for complaining about illegal activity, discrimination, health and safety violations, or harassment in the workplace.

  • Taking Protected Time Off: The DOL states that you can’t fire an employee for taking family or medical leave, military leave, time off to serve jury duty, or time off to vote, or any other legally protected time off.

Final Tip

Make sure you review all state and federal laws, as well as your company’s own employment policies, before firing an employee to ensure that you can’t be accused of wrongful termination.

Helpful Links:

Using Proper Employee Termination Procedures – bizfilings.com

How to Fire an Employee – humanresources.com

Five Messy Firings and their Lessons – SHRM.org

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