Legal Considerations for Employee Terminations

Terminating an employee is a sensitive process that involves navigating various legal requirements. To reduce potential risks, it's crucial for employers to have clear, consistent termination policies in place, including well-defined disciplinary procedures and thorough documentation practices. Properly training managers, supervisors, and HR personnel on these policies and their legal obligations is essential for ensuring compliance and protecting the business.

Pre-termination Considerations:

• Ensure the termination reason is lawful. Assuming it is an “at will” agreement, it is still advisable to have a clear, legitimate, and nondiscriminatory reason for the termination.
• Explore alternatives to termination. Make sure that the legal and/or business risks of terminating the employee don’t outweigh the benefits of the termination.

Preparation and Execution:

• Review all relevant documentation, such as performance reviews and contracts.
• Consider severance packages, either mandatory or discretionary.
• Carry out the termination professionally and clearly, focusing on the legal reasons.
• Recover company property and revoke system access.

Post-termination Responsibilities:

• Issue final pay and benefits, ensuring compliance with state laws. employers may be required to provide additional payments in addition to any earned but unpaid wages pursuant to applicable state and local laws and employer policies (ex. PTO, bonuses, commissions, expense reimbursements).
• Provide COBRA notices if required.
• Retain necessary records and plan for any notifications or reference checks.

4.      Notifications: From a business standpoint, employers should consider creating a plan to inform employees, clients, and other relevant parties about the termination. It’s generally best to err on the side of caution by sharing only essential details, avoiding disclosure of the employee’s performance or conduct issues.

Key Takeaway: Spend some time as a business to revisiting your termination policies and procedures to be sure they align with the best practices mentioned here to avoid future legal liabilities.

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