So far in our series on how to hire and manage we have focused on the hiring process and how to pay and manage employees once you have hired them. No matter how thorough you are with the hiring process however, there are going to be some employees that do not work out and that will need to be fired. How to fire an employee in the most efficient and effective manner is the topic of today’s article. So let’s get started!
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Step 1: Establish a Firing Protocol
If you don’t already have a firing protocol, establish one as soon as possible. A comprehensive firing protocol consists of accurate job descriptions, clear employee contracts, and an up-to-date employee handbook.
In all states except Montana employment is presumed to be “at will” unless stated otherwise. It is therefore important to avoid using language which implies that an employee will only be fired for cause or that a job becomes permanent after a probationary period for example. If you have an employee sign any type of employment contract make sure it is reviewed by an attorney and includes an at will clause.
If you do not already have job descriptions, employee contracts and an employee handbook, here is a template for each:
Fitsmallbusiness.com: How to Write A Job Description
Rocketlawyer.com: Employee Handbook Template
Rocketlawyer.com: Employment Contract Template
Use a “Progressive Discipline Policy”
A progressive discipline policy is not intended to establish a rigid set of penalty rules, but rather ensure that employees are never surprised that they are being fired. To eliminate the element of surprise, you need to provide your underperforming employees with a series of increasingly severe warnings, which are documented in the employee’s file and signed by the employee. Whenever you reprimand an employee, give him or her adequate time to respond to your feedback with performance improvements.
If you are just learning how to fire an employee and have failed to properly document an employee’s performance issues, do not try to reconstruct documentation later on. Also, do not selectively document some workers and ignore others, as this may be seen as discrimination.
Step 2: Evaluate Your Legal Obligations
Here is a list of scenarios when it is illegal to fire an employee.
Discrimination: Under federal law, it is illegal to fire someone for reasons of age, race, religion, sex, national origin or a disability that does not influence their job performance. Some states have additional considerations, so check your specific case.
Whistleblowers: You cannot fire employees for complaining about any illegal activity, health and safety violations, or discrimination or harassment in the workplace.
Exercising Legal Rights: You cannot fire employees for taking family or medical leave, military leave, time off to vote or serve on a jury.
“Just Cause” Promise: If you do not carefully outline your employment contract in writing, you may accidentally create an implied employment contract. This may occur if you tell your workers that they will be fired for cause only, or establish formal guidelines that spell out how and when terminations will be handled. This highlights the importance of a well-written Employee Handbook and employment contract.
Avoiding “Constructive Discharge”
Constructive discharge is a legal concept in which an employee claims they were forced to quit through intolerable working conditions. Make sure your company obeys federal employment laws to avoid factors that trigger constructive discharge claims, and heighten the risk of employee lawsuits.
Step 3: Review and Assemble Documentation
The next step of when thinking about how to fire an employee is to compile a list of documents you should bring to the termination meeting, which includes:
- A detailed letter that outlines the status of your employee’s benefits, vacation pay/unused sick time, repayment of advances, and payment of money owed the employee.
- An explanation of benefits (COBRA) Read more about COBRA here.
- Final paycheck or severance check. Read more about offering severance here and other things that may need to be offered in the final paycheck here.
- Documents to sign (including a termination notice or release)
- Explanation of confidentiality obligations
- Return forms for company property (key cards, etc.)
Step 4: The Termination Meeting
Once you have prepared and assembled all your documentation and prepared a termination letter, you are ready to sit down with your employee and convey the news. It is best to make the meeting simple and quick. Find a private, neutral space, and be compassionate and respectful.
Give them the letter you have prepared outlining the information on their benefits information, final paycheck, severance, vacation pay, and other benefits. You are also legally obligated to include information on COBRA, a pension or 401(k).
When carrying out a termination meeting, make sure to have a witness who can account for your actions and prevent a disgruntled employee from making false accusations of wrongful behavior. Most human resource experts recommend firing employees on a Monday morning, and avoiding Fridays. Once the meeting is over, let your former employee leave immediately and schedule a time for them to collect their things.
Step 5: Talk to the Rest of Your Team
Once you have fired an employee, it is a good idea to notify the rest of your team, since many of them may be concerned with their own job security. As with the termination meeting, keep things short and to the point.
That’s our article for today. If you have any questions or comments please leave them in the comments section below. Also be sure to stay read the next article in our new series where we discuss how to open a bank account for your small business.
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