Letting an employee go can be hard.
Every employer will eventually have to let an employee go. Knowing the proper steps will help you avoid any legal issues. — Getty Images/katleho Seisa

Firing an employee is a complicated but inevitable task that every employer will eventually face. If you find that you need to let a worker go, you’ll want to be as prepared as possible so you can avoid any legal complications along the way.

Here are the legal steps you’ll need to take to fire an employee.

Employer's rights

In most states, employees are hired on an “at-will” basis, meaning employers have the right to fire any employee, at any time, for any (or no) reason at all. However, if someone is employed under contract, their employer will have to follow its explicit terms when considering termination.

Some contracts are highly specific, listing reasons for termination verbatim, while others are more broad, simply stipulating that there must be a “cause” for termination. These causes often vary, from poor performance or insubordination to elimination of position.

Exceptions to at-will terminations

There are a few important exceptions to terminating an at-will employee:

  • Just cause. Telling your employees they’d only be fired for a “just cause” essentially establishes guidelines for future terminations. This not only implies there is a contract in place, but also puts you at risk for a lawsuit should you fire someone for a reason that’s not in accordance with your own rules.
  • Discrimination. Even though at-will workers can be terminated for any reason, this does not excuse discriminatory actions. It’s federally illegal to fire workers for their age, race, religion, sex, national origin or disability (so long as it doesn’t interfere with their job performance). Be sure to also check with your state’s regulations to ensure compliance.
  • Public policy. It is considered wrongful termination to fire someone in violation of public policy. If an employee’s actions are protected by a statute or constitutional right, even if you disagree with their activity or it’s at the expense of your company, you cannot terminate the individual on this basis.

[Read: How Do I Know It’s Time to Fire Someone?]

Firing an employee is a complicated but inevitable task that every employer will eventually face.

Five legal steps to fire an employee

If you’re ready to fire an employee, here are some steps to guide you through the process:

  1. Review your employee handbook and its firing policies. Every employer should have a formal employee handbook that details disciplinary policies, including potential reasons for termination. All employees should receive a copy during their onboarding period, and you should have a written confirmation of receipt. Before you begin the process of firing someone, review your handbook to ensure that policies are, in fact, clearly spelled out, and hold yourself accountable to enforcing all consequences outlined in the handbook.
  2. Document violations. If an employee violates company policy, document it in writing and ensure it is acknowledged by the worker. Create a performance improvement plan and give the employee the opportunity to rectify their errors. Store any documentation in their personnel file for future reference so you can support your claims when it comes time to terminate the employee.
  3. Investigate grounds for termination. If you feel you’re ready to fire someone, investigate the situation and collect interviews, documents and evidence associated with your case. The more evidence you have, the stronger your case for firing that employee will be.
  4. Be brief and factual (but don’t sugarcoat it). Once you have everything organized, sit down with the employee and explain—carefully—why you’re choosing to let them go. Keep the discussion brief and clear. If you sugarcoat your reasoning, you’re potentially misleading the employee, which could come back to bite you down the line.
  5. Fulfill all legal requirements. Employers must fulfill certain legal obligations and provide a terminated employee with information about their benefits, including COBRA, their last paycheck, unemployment options and transportability of other insurance. You might be tempted to deny unemployment benefits, but if you proceed, be prepared to fight claims of discrimination or wrongful termination.

Firing an employee is stressful enough and the last thing you need is a disgruntled worker taking you to court. With these best practices, you’re more likely to steer clear of legal trouble. However, it is always recommended to seek legal counsel before making any firing decisions to ensure that you have sufficient cause and documentation for a legally solid termination.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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