Letting an employee go is never easy. It’s a terrible feeling, especially if you’ve tried to help them turn their performance around. And with hundreds of different federal and state employment laws, termination can seem like a legal minefield.
We’re here to help. Learn how to fire someone, including the necessary legal steps, with our guide to terminating an employee.
First things first
According to Rocket Lawyer, all U.S. states “recognize at-will employment. However, some states place limitations on it.” In most states, at-will employment means that an employee can be let go at any time, for any reason (except illegal causes).
Some states, however, have crucial exceptions to this rule. That’s why it’s extremely important to check your state laws any time you consider disciplining or firing an employee.
We’ll provide guidance broad enough to apply to most employment arrangements.
Always check your state laws before you consider disciplining or firing an employee.
When to fire someone: Factors and alternatives
Firing isn’t the only solution to lagging performance. In fact, unless an employee has done something truly horrible, it should never be the first option.
The following steps will help you assess the situation and uncover your options before you end employment.
- Review your employee notes. Look at the feedback you’ve given this employee since they’ve started. When was the last time they were succeeding?
- Reflect on employee management and training. Are employees given clear goals, performance reviews and concrete ways to improve? Have job expectations shifted as part of your strategic growth plan?
- Get another opinion. An outside perspective is a must. Ask managers and coworkers for feedback in a neutral way. For example, “Have you noticed any issues with workload? Why do you think that is?” Also, consider customer reviews. If reviews are glowing but the employee is butting heads with coworkers, maybe a team sit-down is enough to salvage the situation.
- Give the employee a chance to explain. Hold an informal meeting to check in. Describe what you’ve noticed and ask if there’s anything you should know. Are they defensive? Do they show a desire to change?
- Create a formal improvement plan. An employee may no longer be motivated to make changes. But if there’s potential for improvement, you can try the following.
- Craft a development plan. This learning-oriented plan helps someone develop necessary knowledge and skills. It can include on-the-job learning, training materials, educational courses or mentoring. You can divide tasks between work and personal hours over a few months, or create a long-term career development plan.
- Implement a Performance Improvement Plan (PIP). A performance improvement plan also outlines clear actions to improve specific areas, often in 30-90 days. But most PIP goals are focused directly on performance. Where a development goal might be “complete a sales training course,” a PIP goal would be “respond to all customer emails within 48 hours.”
- Move the employee to a new position. There are cases where you simply have a good employee in the wrong role. Review their skills and career goals, and see if you can make a smart switch.
It’s a tough call, especially if the employee hasn’t broken any rules. But if it’s time to move forward with letting your employee go, here’s how to handle it.
Termination should never be the first option.
How to fire someone: 8 important steps
Once you’ve made the decision to fire someone, it’s in everyone’s best interest to handle the termination as quickly and smoothly as possible.
At this point, you should have spoken to the employee in question several times about performance issues—being fired shouldn’t come as a complete shock.
Keep in mind that the process will look slightly different depending on your state. Research your state’s labor laws before you begin. This is especially important if you don’t have a human resources (HR) department guiding you.
Learn how to fire someone legally using these eight steps:
1. Notify managers and HR.
Collect any relevant employee documents, especially any evidence of performance or conduct issues. Review any measures you’ve taken to help the employee turn things around. This might include an unsuccessful performance improvement plan or notes from past meetings with the employee. It’s important to be clear on the facts, and your official reason for termination.
Inform key players of your plans to fire an employee as soon as you start considering it. This includes managers and shift leaders. You don’t want a manager telling important inside information to a departing employee.
If you have an HR manager or lawyer on staff, they’ll outline the official termination policy for the specific job position. They’ll also put together the paperwork you need for the termination meeting.
If you don’t have an HR department, don’t worry. We’ll go over the main information you need to provide departing employees.
2. Bring a witness to the termination meeting.
Consider inviting a manager as a witness to the termination. They can take notes and verify what took place if there are any legal issues down the road.
If you’re thinking of recording the meeting on your smartphone instead of bringing a witness, you need to research your state’s laws on recording and consent first.
3. Schedule a face-to-face meeting with the employee.
When it comes to the termination meeting, a little compassion goes a long way.
Avoid firing an employee over a phone call, email or text message unless it’s absolutely necessary. If the employee works remotely, for example, you may not want to make them drive into the workplace only to be fired.
If possible, schedule the meeting within the next few days after reaching out. That way, the employee isn’t left jumping to conclusions for two weeks.
Wondering which day of the week is best to let someone go? Some employers think the middle of the week is best. This way, the terminated employee isn’t taken aback right when they start the work week, but you also avoid resentment that may come if they’ve worked a whole week only to be fired on a Friday. This also gives the employee time to send out job applications during the work week.
No matter what, make sure the meeting is in a private environment. Plan for enough time so you don’t have to rush through anything.
4. Offer a brief but specific explanation.
Start with the bad news. Be polite, but firm. Sugarcoating the decision or being vague drags out a difficult process, and won’t protect your business from legal claims. After telling them that you’re letting them go, clearly state their last day of work.
Give them a moment to respond to the news. This is a critical piece. Feeling dismissed or silenced could create resentment.
As we mentioned earlier, whether you need to provide a reason for termination will depend on your state and local laws. But it’s a natural human response to ask “why.” Be prepared for questions, and know how you’ll respond.
If you do answer, don’t walk them through their failures. Give an objective description of the subpar behavior or unchanged performance. If you put a PIP or development plan in place and the goals weren’t met, this part is simple.
Once you’ve made the decision to terminate, do it quickly and smoothly.
5. Make sure the employee knows the decision is final.
Avoid giving your former employee false hope. An unsure tone or wishy-washy language leaves the door open for the employee to object or argue.
If the decision isn’t open to discussion (and it shouldn’t be by this time), say so.
6. Go over final paycheck and employee benefits.
Let the individual know when and how they’ll get their last paycheck. You can bring the paycheck to the meeting, for example, or send the last payment via online payroll.
Refer to this convenient chart of final paycheck laws and dates to get this right. In some states, if you don’t pay the ex-employee on time, you may have to pay penalties, interest and any legal costs.
If you offer health insurance, provide information on how they can continue their coverage. It’s a good idea to send a follow-up email with all of these details.
Finally, it’s an option to ask your employee to sign a release form waiving their right to sue. If you do, remember that you have to provide something the ex-employee isn’t already entitled to receive, like their final paycheck. Severance pay is typically offered if it’s not already company policy.
7. Collect any company property.
If the ex-employee has any equipment at home—like a laptop, work phone, uniform or key—ask them to list it. Set a deadline for the individual to return the items, whether by mail or in person.
Consider walking with the employee to their work area to collect other work items. That way, you ensure business documents aren’t taken at the last minute. Of course, allow them to collect their personal belongings, or offer to send them.
Follow up consistently if you don’t receive all of the company equipment.
8. Change passwords and remove employee access.
It’s due diligence to change passwords after letting an employee go.
But with the adoption of business technology like point-of-sale (POS) systems, guarding your business information is even more crucial. A disgruntled employee could easily steal the credit card information of thousands of customers if you forget to remove their access.
Make sure you change the Wi-Fi passwords, business software logins, door codes and even the locks, if necessary. Don’t forget any spare keys hidden outside.
It’s important to be clear on the facts, and your official reason for termination.
What to do after you’ve let someone go
After completing the above steps, there are a few important follow-up tasks.
First, tell your other team members that the individual is no longer employed there. You should handle this with the same level of care as you did the termination. It’s vital to maintain employee confidentiality by not giving too much detail.
Avoid describing the reason you terminated the employee or the circumstances that led up to it. Furthermore, it’s best not to offer any information about how the termination meeting went. These actions could give the ex-employee a reason to claim they were wrongfully terminated or that you violated their privacy.
Try this simple explanation:
“I wanted to let you all know that Allison is no longer working with us. It was a tough decision, but we think it’s for the best. We don’t plan on any more personnel changes.”
This helps you clamp down on rumors and maintain employee morale. Next, you’ll need to reassign your former employee’s job duties. Spread out the work as evenly as possible, and thank your staff for handling the temporary changes.
It’s tempting to try to fill the open position right away. Before you do, use this opportunity to take stock. A termination can be caused by a combination of internal and external factors. Make sure you’re equipping your new hires—and longtime staff members—for success.
The bottom line
When you hold a high bar for your business, inevitably, you may have to let someone go. Sometimes there’s an opportunity to work with an employee to improve weak areas, but it won’t always work out.
In every scenario, it’s critical to ensure your firing process is fair. This shields your former employee and your business from stressful and time-consuming legal issues. And you don’t want to lose good employees in the fallout.
Now that you know how to fire someone, you can properly prepare for the unfortunate possibility—and continue working toward a stronger team.