An employment probation period, referred to as a probationary or employment training period, is a time frame used to determine if the new hire is the right fit for the position and the company is right for the employee. A typical time frame for a probation period is around 30/60/90 days. Once you’ve determined your time frame and what benefits will be available during that time, you should document your probation period policy and share it with your team via the employee handbook and other documentation.
Download our Employment Training Period policy template, which you can customize to meet your needs.
Thank you for downloading!
Pros & Cons of an Employment Probation Period
| Pros | Cons |
|---|---|
| It enables a new hire to determine whether the job is a fit. | It may violate labor laws in certain states that don’t honor at-will employment. |
| It allows the employer to terminate an employee during the period, so long as it is not for a discriminatory reason. | If documentation is not rock-solid, it could lead to misunderstanding and put your company at legal risk. |
| The employer avoids paying for expensive benefits and perks until the employee is proven. | There’s a misconception that passing the probation means at-will no longer applies to employees. |
Some employers feel that using a probation period for new employees reduces their hiring risk. There are also some downsides to a formal employment probation period, however. For example, courts may interpret your probation period to imply that employees can only be terminated for cause after it’s over. Ensure to have an attorney review your document for legality.
Legal Considerations of a Probationary Period
Using the word probation can imply a policy of only terminating employees for cause once their probationary period ends. Even a mere implication can lead to legal trouble for your company.
- At-will employment: Courts will look at both your policy language and your company’s actions. If your company takes certain actions that contradict at-will employment, courts may give your actions more weight and effectively negate your at-will language—meaning you can only terminate employees for cause.
- Employee benefits: Ultimately, your company must ensure there’s some difference between benefits an employee receives during the probationary period and after while also seeing to it that you’re not violating any state or federal employment laws by holding back any benefits during the probationary period.
- Employment contract: If your company uses employment contracts—or your workers are governed by a union contract or collective bargaining agreement—and those contracts do not include any mention of at-will employment, then courts will hold you to your contract, not the at-will doctrine.
- Termination: At-will employment allows both employees and employers to end the employment relationship at any time, for any reason, with or without notice. Employers still cannot terminate employees for discriminatory reasons, such as pregnancy or disability.
How to Implement an Employment Probation Period
To implement a probation period at work, you’ll need to select the time frame, create your policy, and provide documentation to your staff and new hires. You also need to decide what benefits the employee will receive upon hire versus what benefits will wait until after the employment probation period.
Step 1: Determine Time Frame
The most common time frame for a new hire probation period is 30 to 90 days. However, you—as the employer—can set any time frame you want so that you can fully evaluate whether an employee fits the company culture and can do the job. Below are examples of when each of the following 30/60/90-day time frames makes sense.
- 30 Days is a good time frame for an employment probation period in an entry-level job, such as food service or retail, where you’ll know fairly quickly if the employee is going to work out. For example, if an employee can show up on time, display a positive demeanor, and master your POS system, they’ll probably demonstrate those traits within the first few weeks.
- 60 Days is a good time frame to use as a probationary period in jobs with productivity metrics. For example, if you hire workers who must master skills, like assembling furniture, entering data, or inspecting manufactured goods, you’ll need time for those employees to learn the job.
- 90 Days is a good time frame to use for new hires in professional roles like managers or sales executives. The reason for the longer time frame is that you may want to see how they function in the job and whether they can build relationships, earn business, or motivate their team.
Step 2: Decide What Benefits to Include
Perhaps the hardest part of implementing a probation period is deciding what you will and will not include during the employment probation period. The following benefits generally should be provided upon hire and not wait until after a probation period:
- Sick Leave: What happens if a worker calls in sick during their probationary time period? Some states, like California and New York, have mandatory sick leave laws that require you to allow time off for illness.
- Health Insurance: If you have over 50 full-time equivalent (FTE) employees, you must provide health insurance to your employees. Some health insurance companies require this to be offered within the first 30 days, so even if your company has a probation period, you may be required to offer new hires access to healthcare.
A business should consider withholding the major types of employee benefits and perks until after the probation period is over and it knows the employee can perform the job to its standards. For instance:
- Paid time off (PTO): PTO in the form of vacation can be withheld until after the probation period. Typically, this is done by accrual, wherein the employee will be ineligible to take PTO until after they have accrued their time. Learn more in our PTO policy guide, and be sure you exclude sick leave from this policy, as it may violate labor laws.
- Retirement benefits: Wait to offer 401(k), stock options, or other retirement benefits until after the probationary period has ended. You should, however, provide new hires with the details of these plans so that they can begin participating in the plans immediately upon eligibility.
- Other medical insurance: While you may be required by your state laws to offer healthcare before the end of your chosen employment probation period, you may wait to offer dental or vision insurance.
- Life insurance: Life insurance is usually elected and paid for by the employee. Even in the case where the employer partially or fully pays for it, you are able to withhold this benefit until after completion of the probation period.
- Company perks: Some companies offer unique perks, such as flexible work schedules, half-day Fridays, and incentive bonuses, as part of their employment. It is advised to wait until after the probationary period is over to offer these types of benefits.
All employees, especially those new to your company, should be given a copy of the company handbook, any company policies, job description information, and the tools to complete their assigned jobs. This also includes onboarding, training, and access to company resources, as well as all stipulations about a probationary period and its inclusions.
Step 3: Create Your Policy
After you decide the time frame and benefits that you want to include, it is time to create and document your policy in writing. Use the provided template as a starting point. This document should include the above-mentioned, as well as any rules that apply during the probation period at work, such as performance metrics, goals, and job expectations.
Follow these steps to create your employment probation period policy:
- Start with a paragraph that describes the policy time frame terms and lists employment as “at-will.” This ensures both the employee and the employer understand the duration of the trial employment and that either party may end employment for any legal reason.
- List some or all of the benefits that will be received following the successful completion of the probationary period.
- Reiterate your at-will employment status.
- Also include what is expected of the employee during the probation period, any documentation the employee will receive, such as the company handbook, and any performance reviews that will be performed.
Here are some tips to keep your policy effective and compliant.
Step 4: Seek Legal Advice
If set up incorrectly, a probationary period may violate local labor laws and employer rights. For instance, some states make it illegal to postpone sick leave until after the probation period. Plus, federal labor laws, like the Americans with Disabilities Act and Title VII of the Civil Rights Act, protect employees from day one.
There is also a potential risk of the employment probation period undermining an employee’s at-will employment status (employees may feel their employment is guaranteed following a probation period). Additionally, be sure that you do not include any language in your policy that could be considered discriminatory.
Step 5: Update Employee Handbook
Once your employment probation period policy is created, add it to your existing employee handbook and new hire documentation. This will ensure that your policy is read and signed before your new employee’s first day. This also creates a legal document that clearly outlines the details of the probation period.
Step 6: Share Policy With Staff
Once you have finalized your policy, you need to share it in writing with your staff. Discuss expectations and provide training, resources, and feedback. Be sure to also include your employee probation period policy in your job ads, interviews, and job offer letters. This clarifies upfront that the new hire will be subject to a probationary period.
Additionally, you can provide new hires with a probation period letter that explains the policy. In the letter, reiterate your probation policy, and have the employee read, sign, date, and return a copy of the letter on their first day of employment. A letter signed by the employee may prove that the employee was fully aware of the probation policy in case of a wrongful termination lawsuit.
Once an employee is hired under the new program, make sure you’re giving them good employee performance feedback so that they understand your expectations and can proactively address issues within the probationary period.
What to Do When the Probation Period Ends
Once the job probation period ends, you should have a review meeting with the new employee to discuss their progress and performance. Then, there are three things you can do: choose to extend the probationary period, hire the new employee, or terminate the working relationship.
Employment Probation Period Frequently Asked Questions (FAQs)
A probation period is simply a timeframe, anywhere from 30 to 90 days, at the very beginning of employment where both the employee and the employer can decide if the job is a fit. It is a time for training and learning the role.
The biggest benefit of the employee probation period is that it gives you the opportunity to gauge the employee’s skills and progress in learning the job. Another benefit is that it mitigates risk; if the employee isn’t meeting expectations, you can terminate them with little risk to your bottom line.
No. Essentially a probation period and at-will employment are the same. An employee can be terminated for any reason, other than discriminatory, during both a probation period and regular employment.
Bottom Line
An employment probation period can give both the new hire and the employer a chance to decide if they are the right fit for the job. While some employers like having a new hire employment probation period, it may be unnecessary if your state allows the employment at-will doctrine as it would create redundancy and increased legal risks. If you choose to institute a probationary period, consider using our template and have your attorney review your probation period policy before implementation.
