Effectively Terminating an Employee

1. SETTING UP THE MEETING
Arrange a time to talk with the employee in person.  Do not procrastinate once you have made the decision.

Decide who is going to deliver the message.  The employee’s manager is the best person to terminate the employee.  The manager should be coached and receive guidance about how to conduct a termination meeting. Sometimes a witness should be present.

2PICK A NEUTRAL PLACE
Use a conference room if such is available, the conversation should be private.

Consider the day on which to deliver the news.  It is best to terminate an employee in the middle of the workweek rather than a Friday. Terminating mid-week allows the employee the opportunity to immediately begin a new job hunt.

Avoid terminating employees around holidays or dates of significance to the employee, such as his/her birthday.

3. COMMUNICATING THE DECISION
The actual meeting with the employee should be brief, respectful, and to the point.

Employer should engage in a candid, honest discussion about the reasons for the termination.

Employers who do not answer a truthful reason for a termination may risk legal exposure.

4. DO NOT EXAGGERATE
Do not exaggerate the employee’s poor performance or over-justify the decision.

Be firm and direct: Here is the decision, here are the reasons, and here is the information for what happens next.

The discharge should be carried out in a calm, professional, manner. 

5. ADDRESS ADMINISTRATIVE ISSUES
The employee’s final paycheck, including any vacation pay should be available.  The terminated employee should sign a written acknowledgement that the employee has received his/her final pay.

Employer should collect keys, badges, uniforms, cell phones and other company property, including the company’s employee handbook.

The employer should review the company’s confidentiality policy with the employee.

The law requires the employer to give the employee certain forms (see below).

6. MANAGING THE TRANSITION
After the termination meeting, notify other staff members as soon as possible to stop the rumor mill and deal with any morale issues, providing a simple, neutral explanation.  Too many details may result in accusations of defamation.

The employer should also notify customers and clients, and assure them that the transition will be smooth.

7. WARNING: TERMINATING AN EXECUTIVE/KEY EMPLOYEE OR MEMBER OF A PROTECTED CLASS
A Separation and Release Agreement should be signed by the employee.

Contact an employment attorney prior to terminating the employee.

8. PROVIDE UP TO DATE REQUIRED FORMS TO SEPARATING EMPLOYEE: FIVE FORMS AN EMPLOYER MUST GIVE A TERMINATED EMPLOYEE
1. Notice of Change in Relationship found at: Click Here

2. “For Your Benefits” brochure published by the EDD (EDD Form DE2320) found at: Click Here

3. California Health Insurance Premium Payment (HIPP) Notice found at: Click Here

4. An employee or his/her dependents losing group health coverage may be eligible for COBRA continuation of coverage and must receive a COBRA Continuation Coverage Election Notice which outlines all the rights under this extensive law. This Notice does not have to be delivered to the employee on the final work day.  However, timing and proof of delivery are very important under this law.  The employer must notify the plan administrator within 30 days of the employee’s loss of coverage. The plan administrator must send to the employee (and covered dependents) the Notice within 14 days. COBRA Notices will vary.  We suggest you contact your insurance carrier first.

Employers with 20 or fewer employees will be covered by Cal-COBRA and will have these notification services completed by the insurance carrier.  Larger employers will have to administer this notification process internally or hire a third party to do so.  Penalties for delaying this Notice are significant, ranging from $100/day for each day of non-compliance to $500,000 or 10% of the health plan costs (whichever is less) for major violations.

5. Employees who also have profit sharing, retirement funds, 401k, etc. should also receive notice of the options of the disbursement of these funds, although this does not have to be done by the last day of work.  Each plan should have a notice period set out in the plan documents.

6. An employee whose employment is separated may request a W-2 prior to the normal January cycle. If requested, the W-2 must be sent for all wages paid during the current calendar year.  The form must be sent within 30 days of the request or, if later, within 30 days of your last payment of wages to the employee.