Employee Terminations: What You Need to Know

Having an employee termination policy in place is as important as having a solid hiring strategy. For business owners, such policy can represent the difference between a lawful termination and a legal issue. Firing and laying off employees are valid business strategies, as long as they are justified and executed in compliance with labor regulations. For example, there are regulations such as the Worker Adjustment and Retraining Notification Act (WARN) that require employers to provide at least 60 calendar days advance written notice of any facility closing plans or mass layoffs.

Documentation of the process is essential, and this doesn’t start with the decision of terminating an employee. The documentation of employment policies and the steps followed to handle a particular situation are the most effective ways to protect the business against unfounded claims in case of termination. Consider developing and including the escalation practices that managers and supervisors will have to follow to notify employees of infractions.

Setting aside the legal aspects of the decision to lay off an employee, there is also an element of timing and overall business stability to consider. To address those elements, business owners should develop a standard operating procedure to include all details of the termination, including aspects such as return of company property, payment of outstanding benefits, and termination of permissions and systems access. The procedure should also include elements such the day or time and manner of communicating to the employee, and provide the most detailed guidance. For example, in some instances, for security purposes, escorting the employee out of the workplace is standard.

An exit interview with a terminated employee is strongly suggested. Provide the employee an opportunity to ask about the status of their final benefits, general supervisory practices or training opportunities. Although the Fair Labor Standards Act does not require that employees receive their final paycheck upon termination, state regulations could provide various scenarios in terms of how final payments are calculated and when they are made.

The employment termination process should ultimately be handled in an ethical, legal, and respectful manner, weighing in the justifications with the consequences. Keep in mind that even in the best set of circumstances, an employee could always take legal action against the employer, so it is important for your managers to have a legal assessment ready in order to address any claim that could arise.

Need professional HR consulting to put together your employment termination policy?  It’s time to contact Eleva Solutions.