Owning a business is a rewarding and challenging experience. Perhaps one of the most challenging responsibilities for business owners is hiring quality employees and—when necessary—knowing when and how to fire employees. This article briefly discusses 7 tips that will help you avoid legal and other issues when you let an employee go.
- Clearly Define Work Expectations at the Outset
If you decide that terminating an employee is necessary, the fired employee should not be surprised—or should at least know that being fired based on established expectations was a real possibility. To establish proper work and performance standards, clear training at the outset is important, and progressive disciplinary measures are also crucial. All employers, big and small, should keep detailed records of the training and disciplinary process to avoid claims of improper conduct, as discussed in more depth below.
- Fire for a Legal Reason
Employees in Utah can fire at-will employees for almost any reason, such as arriving 5 minutes late to work, performing tasks poorly, or acting abrasively to other employees. An employer generally doesn’t even need a basis at all to fire an at-will employee. Any reason is fine—so long as it isn’t an illegal reason.
One illegal reason is firing based on a protected class. Protected classes in Utah include race, color, sex, national origin, and gender identity—qualities or traits that all people have—as well as other traits such as religious affiliation, being pregnant, being over the age of 40, or having a disability. Federal laws are similar. Avoid any appearance of firing an employee for a reason associated with a protected class.
There are other prohibited reasons for firing an employee, such as firing in retaliation against an employee who reports an employer’s violation of law or firing an employee who takes time off under the Family and Medical Leave Act. And perhaps it goes without saying that an employer cannot fire an employee for refusing to engage in an illegal act.
- Be Consistent with Discipline and Firing
Be consistent on how you handle employee issues, whether large or small. For example, if you allow one person to arrive late without any consequence but then you fire or discipline another for being late, this may create a potential discrimination claim. Every person in Utah fits into a protected class (explained above). The mere fact of being male, female, or asserting no sexual orientation makes you a member of a protected class. So, each person has some trait or quality that an employer cannot use as motivation for any adverse action, like discipline, demotion, or discharge.
Even if an adverse action is not based on a protected class, it may give an appearance of discrimination. For instance, if all males regularly arrive 20 minutes late without consequence, but all females are punished for the same behavior, the employer has created an appearance of violating laws against discrimination. Even if the employer wasn’t motivated by gender, it has acted dangerously under the law.
- Fire Based on Facts and for Business Reasons
Although you can generally fire at-will employees for any reason (so long as it isn’t an illegal reason, as discussed above), you should avoid firing based on hunches, emotions, or other subjective motivations. It is best to fire based on facts and for business reasons. If there is no clear, explainable basis for firing, suspicions and emotions can create allegations and issues that employers want to avoid. The more emotional the firing events are, the more likely the reason for firing is questioned and scrutinized legally.
It is generally best to explain these reasons to the employee in a short, professional, in-person meeting, as discussed later.
- Pay the Employee Everything Owed
When you fire an employee, it is usually wise to pay the employee every cent that he or she has earned—or arguably earned. If timecards aren’t clear for whatever reason, err on the side of overcompensating. If you are tempted to deduct wages for damages the employee caused to company property, think twice. If the employee fails to return employee property, you probably don’t want to deduct the costs from the final paycheck.
Employees are generally entitled to their pay, and after being fired, an employee is more inclined to retaliate against an employer who hasn’t paid everything. For instance, such a disgruntled employee is more likely to file a lawsuit or initiate an investigation by the Utah Labor Commission. Dealing with a lawsuit or investigation, even if you prevail, likely isn’t worth the headache and associated costs.
- Document the Actual Firing Process in Writing
When you fire an employee, you should carefully document in writing the firing process, in addition to documenting prior disciplinary action and issues that occurred leading up to the actual firing. The reasons the employee is fired should be well documented in company records. Such a written record will help protect you from claims that the termination was based on an improper, illegal reason—a reason you did not state or intend and a reason that did not exist (such as reasons based on gender, age, disability, etc.).
If you have a contemporaneous record that explains the reason for the firing, it will be good evidence later—perhaps months down the road—to counter an employee’s claims that you fired him or her for an illegal reason. Your statements after the claim is brought will not carry as much weight as statements and records you created at the time of the firing. Good records help combat “he said she said” situations.
- Implement a Plan for the Firing Process—And Follow It
Implement a plan setting forth procedures for all employees you fire. The experience of being let go will be very memorable for each employee. You’ll want it to go as smoothly as possible. Most employees respect—or at least deserve—an in-person conversation explaining in brief and professional terms the reason for the firing. Emails, texts, or telephone conversations are not favored. Keep the conversation short, and be very clear that the firing is final. Rip the Band-Aid off.
Set up procedures that allow you to recover all company property from the employee. Don’t allow the employee to keep company documents, equipment, etc.
Also, implement procedures that make the firing less visible to the rest of the company, which helps make the process less public and emotional. It may be respectful to allow the employee to immediately leave work, with the ability to gather his or her belongings on a later date. Or you can offer to send the employee’s belongings to his or her house.
It may be wise to ask the employee to immediately leave work, without further mingling with the other company employees or spending the day working (or crying) at his or her desk. After being fired, an employee likely won’t contribute to the work environment and may do or say something harmful. For this reason, it is probably wise not to allow the employee continued access to the company property and information after being fired.
It is often appropriate to have another person present when an employee is fired. This additional witness can help combat false claims of how the firing process occurred and what was said or done.
Help with Employment Issues
If you have issues with an employee, are considering firing an employee, or have general employment law questions, give me a call. I am happy to help. I offer a free consultation. My direct dial is 801-365-1021, and you can e-mail me at [email protected].