I get this question at least once every couple of weeks. Recently, however, I finally reduced the list to writing. So, here is the benefit of my wisdom . . . if you can call it that. Follow these rules for safe termination:
1. Always have two people in the room. Two recounts of what happened are better than a he-said-she-said fight between a former employee and the employer in a later lawsuit.
2. Always have a person of the same sex, and if possible, race, religion, etc, as the employee in the room. A jury will like that person’s perspective better than the black male boss in a lawsuit against a former white female employee.
3. Do not make the employee do the walk of shame. Studies show that a former employee’s desire to sue is somewhat related to how they felt about the termination. If you humiliate the person, they will have a stronger motivation to get revenge. Fire at the edge of business hours when there are few people around and allow the employee to leave after the meeting to return later for their belongings, which you can box up, if they prefer.
4. No access to computers after the meeting. An angry employee might do damage. Cut them off and terminate any remote access before the meeting.
5. Ask them to bring in any computer equipment or other hardware they possess for the meeting. Come up with an excuse. Do something. Getting it back later can be an absolute pain in the behind.
6. Get an agreement, in writing, to collect any unpaid payroll deductions from the last check.
7. Do not give a reason. This is the hardest one for clients to follow. There is a strong urge to treat termination like a high-school break up with the “it’s not you, it’s me” excuse or some other excuse made to help the terminated employee feel better about their separation and ease the conscience of the terminating employer. For later defending some type of claim, employment lawyers are then hemmed into a polite excuse, rather than the real reason which is likely that the employee was no good. To preserve a clean slate for the employment lawyer to use, don’t give a reason.
8. If you are going to offer severance to get a release, don’t shove it down the employee’s throat during the meeting expecting a signature. For certain employees you have to offer more time for consideration by law. For the rest, you don’t want anyone arguing they were coerced. Put it in an envelope and tell them they can look at it later and consider it so long as they return it timely. DO NOT tie receipt of a final check to signing off on a severance agreement. You do not want the former employee arguing that the money paid for the release was just additional regular pay that was owed. 1099 the payment. Do not deduct payroll taxes. And, use a round number – if you want to use 2 or 4 weeks pay, round to the nearest $500 up or down as you see fit.
9. Pay the final paycheck within 6 days after termination. It is the law.