Terminating an Employee: Do's and Don'ts to Stay Compliant

Terminating an Employee: Do’s and Don’ts to Stay Compliant

March 13, 2025

Highlights

Terminating an employee is a complex process that requires careful planning, adherence to legal guidelines, and a sensitive approach.

Documenting everything, from probationary periods to performance improvement plans and disciplinary actions, is key to protect your company from potential legal challenges.

Access Point provides comprehensive HR solutions to help businesses minimize employee termination risks and ensure a smooth transition. Contact us to learn more.

Terminating an employee is never easy. It’s a sensitive process that employers must handle with empathy and adhering to strict legal guidelines. One misstep can have negative legal ramifications, damage your company’s reputation, and create a hostile work environment.

This blog post aims to demystify the termination process, providing you with essential “do’s” and “don’ts” to ensure you stay compliant and minimize potential risks.

Voluntary vs Involuntary Terminations

There are two types of employee terminations:

Involuntary termination: It’s when an employer decides to end the work relationship through firing or laying off an employee.
Voluntary termination: It’s where an employee resigns under their own volition.

Voluntary terminations are by far the easiest to deal with. Employees initiate the process and resign. Simple as that. These types of terminations can be invaluable, as exit interviews allow the company representatives to have a candid conversation and gather information to improve the organization.

Involuntary terminations, on the other hand, are more delicate and must be handled discreetly for two reasons:

You need to be sure your reasons for the terminations are well documented and truthful

You do not know how the employee will handle the news

When a manager is considering terminating an employee due to disciplinary issues or work performance, they must lay the groundwork well in advance to ensure that the termination is done properly and is well documented. Doing so will avoid any possible legal action from an employee who feels they’ve been wrongly terminated.

How to Terminate an Employee

Follow these best practices to make the process easier and maintain compliance:

Document Everything

Keep detailed records of performance, policies violations, or disciplinary issues of your employees.

For new hires, document performance and conduct during their probationary period, which is typically 90 days. For established employees, initiate documentation from the first instance of performance or disciplinary concerns.

If you are terminating an employee for performance issues, you must implement a Performance Improvement Plan (PIP), which usually lasts 30 days. Clearly outline performance expectations, provide specific examples of deficiencies, and set measurable goals.

For disciplinary issues, you must adhere to your company’s progressive disciplinary policy, which may span 30-45 days. In this case, make sure to document each step, including verbal warnings, written warnings, and final warnings, before termination.

Understand the Employment-At-Will Doctrine (and its Limitations)

Many employers operate under the “employment-at-will” doctrine, which generally allows both the employer and employee to terminate the employment relationship at any time, with or without cause, and with or without notice.

However, there’s a misconception that “at-will” means you can terminate an employee for any reason whatsoever. This doctrine is subject to crucial exceptions:

Public-policy exception – This exception protects employees against adverse employment for actions that serve the public good, such as reporting illegal activity or refusing to violate the law.

Implied-contract exception – Implied contracts can arise from oral assurances, company handbooks, or consistent practices that create a reasonable expectation of continued employment.

Covenant-of-good-faith exception – This exception prevents employers from acting in bad faith or with malicious intent, such as terminating an old employee to avoid paying retirement benefits or terminating a salesman just before a large commission on a completed sale is payable, for example.

When Conducting the Termination Meeting

Prepare thoroughly. Create a detailed checklist covering all the items you need to go over. This should include:
- Return of company property (keys, access cards, laptops, phones, etc.).
- Explanation of final pay, benefits, and COBRA options.
- Review of any severance agreements or non-disclosure agreements.

Maintain control over the environment. Immediately after the meeting, restrict the terminated employee’s access to the workplace. Allow them to gather their possessions after hours or have a designated person deliver their items. You don’t want a terminated, potentially angry, employee to have access to company files, or to make others uncomfortable with displays of emotion.
Choose a private and neutral setting. Conduct the meeting in a private, quiet location to ensure confidentiality and minimize distractions.

Have a witness present. Ideally, include an HR representative or another supervisor who can explain the terms of the termination, answer questions regarding benefits and final pay, and ensure the meeting is conducted professionally.

Deliver the message with empathy and respect. Be professional and acknowledge the difficulty of the situation. At this point, the expectations should have been discussed and documented from previous conversations. Ensure that you are clear and concise in your decision.

The Don’ts: Avoid these when Terminating an Employee

Don’t violate employment laws. Avoid violating federal, state, and local employment laws, including those related to discrimination, retaliation, and wage and hour regulations.

Don’t make false accusations. Avoid making false or unsubstantiated accusations against the employee. Stick to documented facts and evidence.

Don’t publicly humiliate or embarrass the employee. Conduct the termination meeting in a private setting and maintain confidentiality. Avoid any public displays or actions that could embarrass the employee.

Don’t delay final pay or benefits. Ensure the employee receives their final paycheck and any owed benefits promptly and in accordance with applicable laws.

How Access Point Can Help You Navigate Employee Terminations with Confidence

Terminating an employee requires a delicate balance. It should be done with decency and respect. But also, following strict legal guidelines and company policies to mitigate risk and ensure compliance. Otherwise, you could face legal battles and damage your employer brand.