Employee Termination

Guide to Properly Firing an Employee

Handle a termination graciously and stay out of legal trouble
By Maggie Rauch

Few things you will do in the process of running a business are as unpleasant as firing an employee. But as much as you may want to avoid the situation, firing an employee may be the best option in certain instances. When that time comes, you need to:

1. Decide when to terminate
2. Avoid discrimination and wrongful termination lawsuits.
3. Treat the employee with respect and understanding.
4. Maintain a positive environment for workers who remain.

Action Steps

The best contacts and resources to help you get it done

Investigate before you act If the employee did something specific that is triggering termination, investigate the event thoroughly. Check the employee's files for signs of past performance problems. Look for alternatives short of firing.

I recommend:  This checklist from do-it-yourself legal advisor Nolo suggests steps to take before firing and this wrongful termination checklist shows you the first steps to take to keep it legal.

Document everything At the first sign of a problem, document and save all relevant communications. Give the employee a formal letter upon firing them. The termination letter should include the reason for termination, number of days or weeks notice, information about benefits and references to all prior efforts made on your part to resolve the difficulty.

I recommend:  Check this list of sites that offer sample termination letters, or go to Lawdepot.com, where you can build a customized termination letter. The HR Document Center offers a very basic template free of charge. For desktop advice on how to document problems, try 101 Sample Write-Ups for Documenting Employee Performance Problems.

Plan and conduct the meeting This is one meeting you really need to prepare for. You need to time it correctly, choose your words carefully and have answers ready for the questions your employee may ask.

I recommend:  Get tips on how to conduct the termination meeting from Vault.com.

Notify your IT department or provider IT needs to know when you're firing someone to ensure that all relevant communications are preserved, access to corporate files is cut off and no sensitive information is compromised.

I recommend:  Learn when and how to involve your IT department to ensure the security of your data.

Cover all your bases with a clear termination policy Develop a termination policy, and as your company adds managers and/or HR personnel, inform them of the procedures and issues.

I recommend:  This termination of employment policy software addresses everything from return of the employer's property to post-employment benefits. PersonnelPolicy.com walks you through the process of creating personnel policies and writing an employee handbook.

Explain their benefits situation and direct them toward resources. They may qualify for unemployment benefits or for medical coverage under Consolidated Omnibus Budget Reconciliation Act (COBRA).

I recommend:  Get the facts about who is eligible for COBRA and unemployment at the U.S. Department of Labor.

Tips & Tactics

Helpful advice for making the most of this Guide

• Don't forget about security. If there is any chance that your employee might react by confronting you, you may want to have a security professional in the room.
• Be compassionate. No matter how ugly the circumstances, now is the time to draw on your powers of sensitivity. Be respectful and calm, and answer any questions you can.
• Try to time the termination meeting when there are few other employees around, for instance around lunchtime or near the end of the day.
• Keep the meeting brief and to the point.