Last month, I discussed how to hire a new employee. To complete the cycle, this month I will discuss how to fire an employee. If you’ve hired an employee, odds are you will have to fire an employee. As I cautioned in the prior articles, an employment decision should not be made rashly. Firing an employee will cost you money, and I am not referring to possible legal ramifications. When you make the decision to fire an employee, you will need to search, replace and train a new employee. This will cost money out of pocket as well as lost productivity.

What to say

You should always give feedback to your staff. If an employee engages in objectionable behavior or poor performance, you should try to correct the problem. If the conduct persists, you should provide progressively more intense feedback. This should be documented in writing. When you meet with an employee, your decision to terminate him or her should not appear to come out of the blue to the employee.
Get right to the point and do not engage in pleasantries or small talk. There is no easy way to tell someone they are fired. Be unambiguous and avoid phrases like, “things are not working out.” If you have made the decision to terminate someone, you must be direct so there is no confusion. You must make clear that your decision is final and not subject to negotiation. There is nothing you can say which will make the employee understand your decision or make it easier for them to accept. Do not feel like you need to justify your decision. You should explain the basis of your decision as reflected in your written documentation and leave it at that. While this may seem harsh, the decision to terminate someone should not be made lightly.

Where to say it

You should hold the meeting in a place where the employee feels comfortable. If they have their own office, that is usually the best place to break the news to the employee. It provides privacy from other employees, it allows you to leave when you feel the conversation is over, and it allows the employee a place to collect his or her thoughts after hearing the news.

Be sure your reasons for firing an employee are strong since it will impact the rest of your staff. If the staff feel you are terminating an employee unjustly, it will affect the remaining employees’ morale. Firing an employee can have a positive or negative effect on other employees.

What to do next

Give thought to answering questions the employee may have. Even if you give the employee time, i.e two weeks, most employees will want to leave immediately. It is wise to bring their final paycheck with you to the meeting. Review whether they are owed any accrued vacation time or possible overtime (time and a half) which should be paid. It is better to pay this now than deal with it in the future. It is wise to provide a written severance agreement for the employee to sign. Do not pressure them to sign it, but condition any severance payment on signing it. I have a very good agreement, if you want a copy, e-mail me. Remember, even a written agreement does not waive a possible workers’ compensation case or a unpaid overtime claim. Both of these claims are common from ex-employees.

Repercussions

Yes, there can be legal implications for firing an employee. Once again, be sure to document your decision to avoid a legal claim of discrimination. Be sure to pay the employee everything they are owed to avoid a wage claim. Expect the employee to file for unemployment regardless of the reasons for termination. You must make the decision whether to contest the unemployment. If the employee was terminated for cause, they will not be entitled to unemployment. However, cause is a surprisingly high standard for an employer to meet and if there is any doubt, the employee is likely to win an unemployment claim. Like any insurance claim, if an employee wins unemployment, it will affect your unemployment rate for several years. How you handle the termination meeting can impact your likelihood of the ex-employee bringing a legal claim against you.

Employees are typically your biggest overhead expense in your office. They can be your biggest headache. But they can also make you much more productive. Be sure to wait to hire an employee until absolutely necessary, be sure to hire the right employee, and if you make a mistake, be sure to terminate an employee properly.