The Beginners Guide to Firing Employees

Firing employees is part of running a business. Yet, many managers are hesitant to fire employees for both legal and personal reasons alike.

Some employers fear wrongful termination lawsuits, while others are just too stubborn to cut the dead weight from the operation. The truth is that firing someone is never easy—but it’s often necessary.

Regardless of the scenario, this guide will teach you how to fire people with ease. Whether you need to fire a single person or lay off an entire department, you’ll be a pro if you follow these tips and best practices.

What it Means to Fire Employees

There are two types of employment termination—voluntary and involuntary.

Voluntary termination occurs when the employee decides to leave their job by quitting, resigning, or retiring. Involuntary termination is a choice made by the employer.

Firing an employee is just one form of involuntary employment termination, and it occurs when the employee is at fault.

The Basics of Firing Employees

Let’s take a closer look at the core components of firing an employee.

Understand the Differences Between Fired, Laid Off, and Furloughed

Some employers incorrectly fire employees because they don’t understand their options. Classifying the difference between being fired, laid off, and furloughed comes down to two things—employment status and who is at fault.

When someone gets fired, it means they did something wrong. The decision could be related to poor performance, a policy violation, or other reasons, but the employee is at fault, and employment is terminated.

For example, a manager might fire an employee for chronic tardiness and unexcused absences.

Layoffs are another form of employment termination but at no fault of the employee. An employee who has been laid off must be rehired before working again at the same job.

Organizational restructuring would be an example of a layoff. An employee could lose their job if the company decides to get rid of a specific department, even if that person did nothing wrong.

Furloughed employees are still employed, but they cannot work or receive pay. This is a temporary but mandatory leave of absence. Depending on the situation, furloughed employees might still be eligible for employee benefits and unemployment collection.

Employees could be furloughed during slow seasons when there isn’t enough work to keep them busy. Rather than terminating employment, employers can furlough employees with the expectation and intention of putting them back to work when there is work to be done.

Before you fire someone, verify that this is the appropriate action. If the employee isn’t at fault or in violation of anything, a furlough or layoff might be a better option.

At-Will Employment

The majority of states in the US offer “at-will” employment. This means that either an employer or employee can terminate the relationship for any reason—or no reason—at any time.

Both parties are free to terminate employment without legal consequences, as long as the root cause wasn’t illegal. For example, you can’t fire someone based on race, religion, age, or pregnancy.

In short, you can fire someone without giving them a reason if you’re operating in an at-will employment state.

Of course, that doesn’t mean you won’t get sued for wrongful termination. So it helps to keep accurate documentation that legally supports your reason for firing someone.

Policy Violations

Policy violations are one of the top reasons why employees get fired.

As mentioned above, you should be prepared to defend the cause of firing an employee if it ever becomes necessary. Even if employment is at will, this will make your life easier if you’re sued.

Make sure to clearly document all policy violations in the employee’s personnel files. Examples of these documents might include:

  • Formal written warnings for employee handbook violations
  • Time cards showing tardiness, absences, and unapproved long breaks
  • Signed and dated meeting notes for conversations about policy violations
  • Emails supporting the cause for termination
  • Customer complaints about the employee
  • Written documentation of all verbal warnings

If the employee you plan to fire has a long history and pattern of bad behavior, this documentation will make it significantly easier to defend your action.

It’s also important to collect signatures on employee handbooks. So if there’s a policy violation, the employee can’t plead ignorance, claiming no one ever told them the rules.

Poor Performance

Generally speaking, poor performance is usually easy to defend as a termination reason. That’s because the business should have sufficient records and data showing performance issues.

For example, a sales rep could have several months where they failed to meet their quota. Mistakes, performance reviews, complaints, and other performance metrics should be pretty easy to find as well.

When it comes to poor performance, just make sure you tread carefully with the reason. Certain work-related performance issues could be viewed as a violation of state or federal labor laws.

Examples include:

  • Discrimination
  • Retaliation
  • Sexual Harassment
  • Safety
  • Pregnancy
  • Whistleblowing

Let’s say a laborer refused to dig a hole on a job site. You might think that this is insubordination and grounds for termination. But the employee might see it as exercising their OSHA rights, which wouldn’t be an appropriate reason to fire them.

If you run a restaurant, you can’t use “the waiter kept forgetting orders because he’s getting old” as a reason for firing them—that’s age discrimination. Instead, stick to the performance issue without mentioning age.

Termination Documents

While managers usually verbally fire employees, it’s still important to prepare official documents and have physical firing documentation for both you and the employee.

  • Termination Letter — Termination letters are created based on state mandates. They typically include the company’s information along with the employee’s name and termination date.
  • Severance Agreement — If you’re planning to offer a severance package, you should formally document the agreement and terms for payment. For example, employees might need to return company property or sign an NDA before receiving severance pay. All parties will sign this.
  • State-Mandated Paperwork — Each state has different laws for the documents required when an employee gets fired. For example, California employers with 20 or more employees must provide an additional HIPP (Health Insurance Premium Payment) notification.
  • Benefits Paperwork — If you offer employee benefits like health insurance, you need to provide documents that show coverage options to the fired employee. COBRA (Consolidated Omnibus Budget Reconciliation Act) paperwork would fall into this category.
  • Unemployment Documents — Depending on the firing circumstances, you might need to provide documents to help the former employee apply for unemployment pay.
  • Final Paycheck — Some states require employers to provide employees with their final paycheck on the termination date. Other states allow employers to wait until the next pay period or business day.

Again, the required documents depend on your local laws. So it’s always in your best interest to consult with an employment attorney to verify which documents you’re required to have.

3 Tools to Improve The Way You Fire Employees

Using modern tools like HR software can make your life much easier when firing employees. Here are a few of the top options to consider.

#1 — Freshteam

Freshteam is a modern HR platform trusted by over 5,000+ businesses. You can use this solution to organize all employee data and files securely, so it’s easy to access documents when it’s time to fire someone.

After someone has been fired, Freshteam has built-in tools for applicant tracking and employee onboarding. This makes the transition seamless as you’re finding a replacement. Freshteam is free for basic use, and paid plans start at $50 per month. Try a 21-day free trial to get started.

#2 — BambooHR

BambooHR is one of the few HR platforms with specific features designed for employee offboarding. The software makes it easy for you to plan and execute compliant offboarding with checklists, automation, and more.

You’ll also benefit from performance management tools, an employee database, and applicant tracking. To get started, sign up for a free trial or contact BambooHR to request more pricing information.

#3 — Namely

Namely is an all-in-one solution for human resources, payroll, and talent management. The feature-rich platform offers everything from time and attendance tracking to recruiting and onboarding.

I like Namely because it has an integrated performance review system. This makes it easy to track your staff’s performance and establish a clear history or problems before firing them. You can define custom competencies, collect peer reviews, and manage other aspects of tracking employee performance. Pricing isn’t available online, but you can request a free demo to get started.

5 Tricks For Firing Employees

Firing someone is never easy. But these quick tips and best practices will make your job much easier when it’s time to have that dreaded conversation.

Trick #1: Get Straight to the Point

Avoid the small talk when you’re firing someone.

Start by inviting them into a private office or meeting room. This protects the person’s dignity and helps prevent a big scene or distraction that can disrupt the rest of your staff.

Rather than telling jokes or asking about their family to break the tension, skip straight to the point with something along the lines of, “Unfortunately, I have some bad news for you.”

Don’t sugarcoat the phrasing or provide insincere cliches. Saying “I know how you feel right now” or “someday you’ll realize that this was the best thing that happened to you” isn’t going to make everything better. Just be honest and get to the point.

Trick #2: Be Calm and Professional

It is a life-changing conversation for the person you’re firing. As a manager, you need to make sure that your emotions stay in check.

Employees will feed off of your tone and delivery. The last thing you want is to get into a back-and-forth debate or a screaming match with the person you’re trying to fire.

Have some compassion, but remain professional at all times.

For example, it would be highly inappropriate to get up and hug an employee you just fired as a way to ease their pain. But you can let them sit in the room for as long as they need until they gain composure. You don’t need to fire them and immediately show them the exit.

Trick #3: Avoid Surprises

If an employee is surprised by getting fired, it’s usually an indication of poor management.

Your employees aren’t mind readers. If they’re doing something wrong or having performance problems, it is your job to address those issues and give them a chance to correct them. You should have a documented pattern of behavior or work issues and how you’ve addressed them throughout the employee’s tenure of employment.

After you’ve given them repeated chances, warnings, and poor performance reviews, it shouldn’t come as a surprise when they’re fired.

Firing someone who has no clue that their job is in jeopardy can be problematic. These people are more likely to have a bad reaction to the news.

Trick #4: Don’t Waiver

In some cases, the employee might beg or plead for their job. They’ll promise to change if you give them another chance.

By the time you decide to fire someone, they should have already run out of chances. Changing your decision in the middle of a firing is one of the worst things you can do as a manager.

You’ll likely lose respect as a leader, and have bigger problems in the future.

Trick #5: Keep the News Quiet

Don’t leak that you’re planning to fire someone to anyone who isn’t on a need-to-know basis.

Upper-level management and executives will know to keep this news quiet. But there’s absolutely no reason for you to tell other employees that you’re planning to fire someone.

Not only is this unprofessional, but if news gets back to the employee before you fire them, they could take drastic actions and try to sabotage the business.

What to Do Next

You’ve fired an employee—now what? Rather than replaying the conversation in your mind for the next week, you need to move on and get your business back on track.

If you need to hire someone as a replacement, make sure you list the job and review qualified candidates ASAP. Using ATS (applicant tracking system) software or recruiting software can make your life much easier as you go through this process.

Learn from this experience and recognize that this won’t be the last person you fire. Remember what went wrong or didn’t go smoothly so that you can avoid those problems in the future.

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