It is not easy to fire an employee and the process should not be taken lightly, as improper handling can lead to unpleasant results, such as the employee suing the company. It’s therefore vital that you follow the law when you lay off or fire an employee and do it in a way that is respectful, calm, and not too traumatic for either you or the employee in front of you. Don't make a trial out of it when you fire an employee: make it as seamless and stress-free as possible.
Employment is “at will” in most states, meaning either employers or employees can end the employment relationship at any time and fire staff for any reason (without having to establish a just cause for termination) and without warning. The employer is free to fire employees for good cause, bad cause or even no cause, and the employee is also free to resign or cease work.
Just because there is an employment contract, it does not necessarily mean that employment will continue: there is no guarantee. An employer, however, cannot fire an employee for an illegal reason such as race or religion.
A lot of employers point out, in their written policies, applications, handbooks, job evaluations, or other employment-related documents, that their employees work at-will. Employees should check their employment documents to see whether they mention at-will employment.
If an employee has signed a document stating that he or she works at-will, there is not much more to say on the matter. However, if he or she has not signed an at-will agreement, they should check their employee manual or other written workplace policies to check how easy it is for the employer to fire them and if they can be fired without cause. Even if the words "at-will," are not stated, mentions in termination policies that state terms such as "without good cause" or "for any reason" are indications that an employer follows an at-will policy and can therefore fire as they wish.
Good cause to fire needed
That said, some employers state in their written policies that they require good cause to fire and provide a list of reasons to fire an employee, or otherwise provide employees with job protection. Employment contracts that promise job security generally mean that an employee is not employed at-will. For example, if an employee has a two-year contract that states that the employer can fire him or her during the contract term only for committing a crime, then he or she is not an at-will employee. Be careful as an employer when you fire employees as firing an employee for any reason not specified in the contract may well constitute a breach of contract and could lead to a legal claim against you by the employee.
At-will employment disclaimers can be found in employee handbooks all over the United States and it is common for employers to explain what the concept means and that an employee’s at-will status cannot be changed except if this is accepted by the company CEO and a document is signed stating this to be the case.
Employers need to be clear during the hiring process if they have a fire at-will policy. Indicate if an employee will only be fired for a just cause (or not). Making comments such as, "You'll always have a job here as long as you perform well," or "We only fire employees who are unable to meet our performance standards" indicate to an employee that the employer does not use a fire at-will policy.
Similarly, if employees are told during the hiring process that they are at-will employees, employers can rely on that statement as proof that they reserved the right to fire employees for any reason, in the even that employees take legal action against their employers if they feel that it is an unjust termination of contract.
Another gray area for employee-employer disputes is when an employer promises continued employment and this lead the candidate to accept the position, then the employer produces an at-will agreement. For example, if an employer promises a candidate during the interview that he or she would have one year to learn the ropes and will not be fired during that time, the employee should not then sign an at-will agreement as this is almost a contradiction and from a legal point of view, and means that the employer can technically fire the employee without repercussion. Courts will generally treat an at-will contract as the final word despite what was promised by the employer beforehand.
If an employer makes promises during the interview process suggesting that the employer cannot fire at-will, be prepared for the candidate to ask for that in writing.
Unlawful reasons to fire an employee
Although most employees in the United States work at-will, there are some reasons that cannot be used to fire an employee as they are prohibited by federal and state laws. These prohibitions apply whether the employee has an employment contract or works at-will. The following constitute unlawful reasons to fire an employee:
Thanks to federal anti-discrimination laws, employers cannot fire employees because of their race, religion, origin, genetic information, gender, disability, or age (if the employee is over 40 years old). Federal law also forbids most employers from terminating an employee because of pregnancy or a medical condition linked to pregnancy or childbirth. Many states have their own anti-discrimination laws, which, in some cases, provide broader protection for employees than federal law, and also prohibit discrimination based on of marital status or sexual orientation, meaning an employer cannot fire an employee if they are homosexual. The latter form of discrimination falls under the reasons listed as “protected classes”, which are added by some states to their termination laws but not all.
In accordance with federal or state anti-discrimination laws, an employer cannot fire an employee for engaging in certain protected activities, such as reporting his or her employer’s illegal activity to a federal or state agency. And an employer cannot fire an employee for filing a discrimination claim against his or her employer. An employee can bring about a retaliation claim even if the original discrimination claim doesn’t work out. For example, if an employee has been fired for complaining that they were denied a promotion because of their race, you could potentially lose a retaliation lawsuit even if a judge or jury decides that your decision was not discriminatory.
It is unlawful to fire an employee for reporting noncompliant work conditions to the federal Occupational Safety and Health Act agency.
Refusal to take a lie detector test:
There is such a thing in the United States as the federal Employee Polygraph Protection Act that makes it illegal to fire an employee for refusing to take a lie detector test. There are also state laws that forbid the usage of lie detector tests.
According to the federal Immigration, Reform and Control Act, an employer cannot fire an employee because of their alien status, provided the employee has the legal right to work in the USA. Employers need to check for alien status when they fire an employee.
Acts that are ethically or morally wrong and cannot be used to fire a person:
In many states, it is unlawful to fire an employee for reasons that are ethically or morally wrong to most people, such an employee’s refusal to commit an illegal act for the employer. This is called a violation of public policy. As morals and ethics are objective and vary from person to person, so do the laws on this vary from state to state. That means that an employer can fire an employee for something in one state but a different employer cannot use that reason to fire an employee in a different state.
Examples of illegal reasons to fire an employee because of a violation of public policy are as follows:
- fire an employee because of his or her refusal to commit an illegal act (for example falsifying documents)
- fire an employee for exercising their legal right (for example taking family leave)
- fire an employee for complaining about their employer’s illegal conduct
When a company downsizes, often due to a financial crisis and flagging profits, employers need to fire staff, something that is never easy when the employees have done nothing wrong and are loyal to the company. If there are no performance or behavior issues and on the contrary, the employees in question are productive, it can be very tough to fire them. After all, they are generally being laid off to reduce the company’s costs and not because of anything they have personally done. If you don’t carefully plan how you will fire employees in this situation, things could become complicated and difficult very quickly.
Here are some tips on how to fire employees when it comes to a lay-off situation:
1. Be respectful
You have called the person in to fire them in a way but through necessity and not because of anything bad that they have done. The procedures for when you fire someone for a mistake and when you lay them off for financial reasons should not be the same and the person should not leave feeling as though they are in the wrong. Sometimes, the person feels more upset at the way they are let go rather than the actual firing. Respect the person in front of you and be sensitive to their situation and the way you treat them.
2. Be compassionate
Don’t forget that this is a life-changing situation for them, and probably not in a good way. The person in front of you will have real concerns like how they will pay their bills and support their family. It can be a traumatic experience as well and the person may well become upset and emotional. Make sure you handle the situation and fire the person with compassion to help ease things if only a tiny bit.
3. Be straight with them
The employee you need to fire might think that they have done something wrong and there is a double reason that they are being laid off. Be frank and honest with them, assuring them that they have done absolutely nothing wrong. Don’t let them leave the company with “what ifs” in their mind. Let them leave knowing it is no reflection on them or the quality of their work.
4. Be helpful
Ok, you need to fire the person in front of you because your company is not doing too good, but do you have any contacts in other companies or industries who could help the person out and possibly offer them a job in a different company? Be willing to make that phone call to a peer and call in a favor. Recommend the employee who need to fire to your contacts who may be in need of someone exactly like her or him.
5. Be prepared
Do not expose yourself as an employer to potential legal liability: plan in advance when you fire someone. For example, make sure the person receives their final paycheck in a timely manner, that they are paid all of their untaken vacation days and providing them with all necessary paperwork. Also, hold the fire meeting in a private area, like a conference room, so you have some peace and quiet without any distractions. If you conduct the termination interview in your own office, you’re likely to be interrupted by the telephone or people wanting to speak to you, which isn’t fair on the employee you are going to fire.
On the other hand, if the employee you fire takes it, they might be keen to see the company get into trouble for not following procedure to the letter. Protect the company by not giving them any reason to complain about the way the termination was handled.
According to the Worker Adjustment and Retraining Notification (WARN) Act, applicable employers must provide at least 60 days’ written notice in cases of mass layoffs or plant closings affecting 50 or more employees at a single worksite.
With regard to employment contracts, check that the contract will not be breached. Regardless of whether the contract is oral or written, make sure the termination will not result in you breaching the agreement.
Will the termination violate an employment contract? That’s the pivotal question here. Regardless of whether the contract is oral or written, make sure the termination will not result in you breaching the agreement.
Final Paychecks after you fire an employee
As a general rule, employers cannot withhold an employee's final pay after they fire them. Most states have final paycheck laws that determine when terminated workers should be paid. In some cases, the timeframe depends on the employee's industry and whether he or she was fired or laid off. But some states make the distinction between employees who resign and employees who are fired for whatever reason. In these states, employers have the right to wait a bit before giving the final check to the employee who quits, since the assumption is that an employee who decides to leave the company has more time to plan ahead financially speaking (and no doubt also has a new job lined up).
State law may dictate whether unused vacation or paid time off should be paid upon termination, the types of deductions that can be taken from the final paycheck, and the method for disbursing the final wage.
The deadline for final paychecks varies from state to state. Some states, including Massachusetts and California, need employers to provide a final paycheck straight away. Certain states let employers wait until the next business day or give employees the last paycheck anything from a few days to one week later. Some states allow employers to wait until the next scheduled payday.
As already advised, when you fire make sure the final paycheck includes everything you are required to pay by law.
Fire employees face-to-face
It is clearly not easy to fire someone and will probably make you feel very uncomfortable. But it is imperative that you fire an employee face-to-face, in an organized meeting, rather than by e-mail or over the phone. Not only is it a great deal more respectful to fire someone in person, the employee can see your body language and have you reassure them about their performance in the company. More than anything, it is a basic sign of courtesy to fire an employee in person. Also, it gives the employee the opportunity to ask you questions and request full explanations about why they are being let go.
Receiving a termination e-mail is frustrating for the employee you need to fire since he or she cannot ask you questions and is more likely to become angry or upset at the impersonal nature of it and stew over it.
The employee’s direct manager should be the one to deliver the news as this makes it more personal. After all, the employee works with the manager on a daily basis, knows them and is in their team. If the job is passed onto to someone the employee doesn’t know as well, it might not go down well.
Some experts advise having someone else in the room when you fire a staff member, like the HR manager, that can serve as both a witness and can help to answer any difficult questions and all questions related to the HR aspect, such as when the employee will receive their final paycheck.
Things to avoid when you fire an employee
Above is advice on how to fire employees the right way. But is there a wrong way to fire employees? Of course there is! It is impossible to know beforehand how the termination discussion will go and managers can end up not handling the situation quite right, which makes it even trickier for everyone involved. Here are some things to avoid when you fire an employee:
1. Don't be overly empathetic
Be compassionate and show some feeling towards the employee you need to fire, who will understandably be feeling negative about the fact they are being let go. But do not get too caught up in the employee’s emotions and try not to show too much emotion yourself. Being overly sympathetic may enrage the employee and make them feel that you are being false and your feelings of remorse/ sadness etc are not genuine.
2. Don't give employees false hope
Be firm and strong when you fire staff members. It is all too easy to weaken in the face of an emotional employee and insinuate that there might still be hope, just to ease tension. It will leave the employee with the feeling that the decision is not quite final and that you will not fire them in the end.
Or you might end up offering them help to find a new job, something they might end up depending on and then there will be even more pressure on you to come clean or to follow through and actually try to find them a new job.
3. Don't pass the buck
Whether the decision to fire the employee was yours or your superior’s, you are the person who needs to fire the employee, so it is your responsibility to face the termination talk and take it on as your decision. There will be nothing more infuriating for the employee than to hear things such as “It’s not my decision” and “it is above my head”. The employee will swallow the pill a lot better if you take it on as your decision to fire them and, ultimately, they will end up respecting you a lot more.
4. Don't debate with the employee
The employee will likely dispute the termination and may pester you for concrete examples of things they have done wrong or ask you why you have decided to fire them in particular rather than somebody else. The conversation might end up going round and round in circles, with a lot of repetition and with no real conclusion. Don’t get bogged down in the conversation, trying to debate the ins and outs of it with the employee. Tell the person you need to fire them, answer the questions you can, and end the meeting.
5. Don't offer constructive criticism
If the reason you have to fire the person is performance-based, you should already have made them aware of their negative points so as to give them the opportunity to improve them. Therefore, coming out with a load of “helpful tips” during the termination interview will feel like you are rubbing their nose in it and won’t go down well. This is not the time to be high and mighty about their performance and could come across as patronizing and smug to the employee.
Employer's fear about wrongful termination laws
Employers, however careful they are and however much they follow the guidelines set out on how to fire an employee, they can feel uncomfortable about wrongful termination laws. There is the very real fear that a former employee will come back with a lawyer in tow and file a wrongful termination lawsuit. Having employees you need to fire sign a "release" where the employee agrees not to sue the employer in exchange for some benefit (such as a severance package) can go some way to alleviating the fears brought about when you fire an employee.
If you find yourself at the end of a wrongful termination lawsuit, it might be a good idea to hire an experienced employment law attorney since the time and energy spent fighting a lawsuit can distract your from your number one aim of running your business.
The takeaway on how to fire an employee the right way
It is one of the worst aspects of the job of a manager or HR professional to fire someone and can be traumatic and distressing for all involved. That is why you need to do your maximum to make it as painless and seamless as possible and not add any extra stress to the procedure. The key is knowing how to handle this difficult situation correctly. The termination conversation is no time for debate or argument: you are there to deliver a piece of information to the employee and let them know the practical aspects such as when they will get paid. Be sympathetic but not overly so, remain professional and kind but firm.
More than anything, remember that less is more and don't over-do the big termination conversation. Fire employees the right way.