How To Fire an Employee: Everything You Need To Know

Did you know that the way you handle an employee’s termination is often the deciding factor in that person’s decision to sue you or not?

There are lots of ways to handle firing someone, but very few of us know which way is the best way. It’s an emotional situation, which not only affects the person being fired but also your business and your entire team. This is why terminating someone makes it extremely difficult to lead with your intellect instead of your emotions.

Fortunately for you, we have personal insights and conducted in-depth research on workplace termination. We’re going to share what we learned and how to fire an employee in the best and most compassionate way possible – in a way that will not make them want to retaliate against you.

We broke down the firing process into three phases: before, during and after. Then we provide you with tips, warnings and a handy dandy checklist to ensure you do this right. 

Before

Make a plan.

Before you ever hire someone, you should have a plan in place to fire them – a termination letter and complete documentation will be required. This sounds horrible, but it’s the best thing to do for everyone.

Action item:

Write a list of reasons why an employee would ever be fired. Turn it into a cohesive, easy-to-digest document. Share it with new hires so they know what you expect at the very minimum from everyone on your team.

Define the role.

The next document you should have is clearly defined list of employees’ responsibilities and key performance indicators (KPIs), i.e. the items or metrics you’re judging them on.

Action item:

Sit down with current and new employees, and go over these expectations of positions’ documents with each person individually. Give them monthly goals to hit and monthly performance reviews so everyone knows where they stand with you.

Document religiously.

The very first time and each time after that, issues with employees should be documented and dated. Of course, it is best to email this person the issue(s) at hand so you leave a paper trail, and they can have ample amount of time to digest and improve.

Action items:

  • When a problem is noticed, first email your employee and then set up an in-person meeting to discuss it.
  • In the meeting, be nimble. Try to get to the root of the problem, and see what could be the cause behind their poor performance.
  • Focus on the facts, adding zero comments or opinions.
  • Outline specific improvements that must occur by a certain date. Possibly create a project plan to help get them back on track.
  • Ask what you can do to help them improve their performance.

Be Transparent.

It is pertinent to be completely transparent with employees, who are on the road to termination.

Action item:

Clearly state the next step is termination if x, y and z is not done, completed, improved and/or met by a specific date. Don’t beat around the bush. Use the word “termination.”

Prepare.

Once you know you’re going to fire someone, it’s time to make another plan. One that answers the following questions:

  • How will your team function without this employee?
  • Will you hire or reassign their work to another employee?
  • Will or should I provide them with severance?
  • How and when will I share this information with my team and the person?
  • Where will you tell him or her?
  • What questions may they ask me?
  • What is my reasoning(s) for firing them?

Action item:

Answer the questions listed above and any others that may pop up in the meantime. These should be easy to answer if you’ve been transparent with your employee as we recommended in the aforementioned steps.

During

This is the hardest part – actually telling someone they are no longer employed. It can be absolutely painful and definitely emotional.

This is why it’s pertinent to not torture them with small talk, but rather just lay the blow within the first 30 seconds of being in the room.

Action items:

  • State your case and the reason for it.
  • Do not drag things out. All of the details should have been previously discussed in prior meetings, which led up to this.
  • Spit it out. Don’t torture them.
  • Concisely explain the details of the termination.
    • Remind them of any legally binding agreements they initially signed with the company, such as NDAs, confidentiality agreements, etc.
    • Tell them how and when they can pick up their belongings.
    • Collect company collateral.
    • Allow them to take any legal documents you want them to sign home to review.
    • Include any details about severance packages, benefits, health insurance, etc.
  • Consider offering complementary services if the person is genuinely a good person, but just wasn’t right for this particular job. This could include:
    • Recommendation letter for their soft skills
    • Simply thanking them for what they did do
  • Answer any questions they have professionally and concisely.
  • Be prepared for emotions. 

After

Whew. That was tough. Now, all you have to do is break it to your staff and monitor your reputation for the time being.

Tell your employees.

Don’t embarrass the former employee because chances are they have friends in the company.

Consider letting people know on a need-to-know basis or by simply stating in the next meeting that so-and-so will no longer be working with us.

Give few details as to why, and let them reach their own conclusions.

Monitor.

In today’s socially connected world of the Internet, it’s important to set up tools to monitor what a potentially disgruntled ex-employee might be saying about you.

Action item:

  • Set up Google Alerts to get notified immediately when something pops up for your company’s name.

That’s essentially it. This is the high level bullet points of what we believe you should do when you need to fire someone. One last thing though – let’s talk legalities.

Legalities

Regardless of whether or not you’ve handled everything the right way, you still may have an upset ex-employee on your hands; therefore, it’s important to know what you need to do to stay within the law.

Here are six answers to the most frequently asked questions surrounding employee rights and the law.

1. What is the Employment at Will Policy?

According to the Small Business Administration, every state except Montana allows employers the option to create an “at-will” employment policy. This means you can let someone go at any time during employment, without explanation, at any time.

2. When is it illegal to fire an employee?

You cannot fire someone for the following reasons:

  • Discrimination, i.e. firing based on race, gender, religion or disability
  • Whistleblowing, i.e. firing for speaking up about the company’s illegal activities, health and safety violations or discrimination or harassment (This reason does vary by state)
  • Legal requirements, i.e. firing for taking medical, military or family leave or taking time off for jury duty or to vote

3. What benefits are your employees legally entitled to if they are fired or terminated?

Employees may be entitled to the following benefits upon termination:

  • Health insurance coverage continuation
  • Unemployment insurance
  • Vested retirement plans

You can read in-depth details on this question here.

4. Am I required to immediately give the employee their final paycheck?

No, you are not required by federal law to immediately compensate your former employee, but some states do require so check with a lawyer to be certain. The state will be specific about what should be included in that final paycheck. You can contact your State Labor Office here. Also, here is a last paycheck guide.

5. Am I required to offer severance?  

The Fair Labor Standards Act does not require you to provide severance pay.

What other questions do you have for us? Leave a comment below!

How To Fire an Employee: Everything You Need To Know