How to Let Employees Go Legally

2016-07-29

Bad hires happen, even to successful business owners and to those experienced at hiring. So what do you do when an employee doesn't work out? Here is what you need to know about hiring and firing within the law:

Don't I have the right to fire any employee, at any time, for any reason?

The short answer is: No. This right is what's known as "at-will employment," which means that, under certain circumstances, an employer can fire any employee "at will," in other words, for any old reason, justified or not. But there are many caveats to this provision. As an employer, it's up to you to understand the state and federal laws and what you can and cannot do when it comes to hiring and firing.

What are the exceptions?

Employees may not be terminated for discriminatory reasons, or for taking advantage of employee benefits, like using all of their vacation time, or taking time off from work to vote (which is legally protected). Likewise, you cannot fire an employee for refusing to break the law, or in retaliation for exercising an employee right, such as reporting harassment. These laws do vary state to state. In the state of Montana, for instance, employers are not permitted to fire employees "at-will" following a designated probationary period, but instead must demonstrate "just cause" in order to let a worker go.

So how can I legally get rid of an employee?

Just as there are plenty of exceptions to "at-will" employment; there are also plenty of ways to fire a bad employee legally. Here are some suggestions to help you make sure you are following the law when terminating an employee:

Provide clear guidelines: Having a clear employment contract is key to preventing future problems. Not only is it important to explicitly state things like length of probationary periods and termination procedures; it's also critical to outline behavioral and performance expectations. Make sure to specify whether new hires are considered "at-will employees," and never suggest or imply that employment is guaranteed for any reason, either verbally or in writing.

Know the law: Employers may or may not be required to provide continuation of health coverage, unemployment, or other benefits depending on state laws and your company's employment contract. Understanding the nuances up front will ensure that your practices and procedures are legal every step of the way.

Document, document, document: A successful termination begins with having fair and appropriate documentation that begins as soon as the problem arises. Although it may seem tedious, always cite employees for inappropriate behavior or performance issues, and be sure to fully document the process. This will help to show that the termination was legitimate if a former employee claims discrimination or any other type of wrongful termination.

Use common sense: Just because you can fire employees at-will doesn't mean that you should. Treating employees fairly and with respect will give your business a reputation for being a good place to work. When you finally get rid of that difficult employee, you'll have no trouble attracting the right person next time.

For any business insurance questions, call or contact Executive Insurance & Financial Services today.

This blog post is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.

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