QUESTION: I have some questions regarding terminating someone’s employment. I’ve never let anyone go before, so I’m not sure where to start. Here are my questions: Do I have to give them something in writing or can this be verbal? What do I have to pay out—remaining paid time off (PTO), severance? Also, do I have to give the person a reason? Are there things that I should not say because they can be used against me? Should this be done at the end of the day? I look forward to your guidance.
ANSWER: Termination can be difficult, especially if you’ve never done it before. In most cases, there is no specific right or wrong way to do it. It depends on the circumstances of each situation. To answer your specific questions:
No federal law requires you must put anything in writing. However, in some cases this is required by state or local law, so you should check to see if this is applicable to you or not. If no regulation requires it, we still recommend that you document the end of the employment relationship with a form or letter. This is just good documentation practice for everyone.
Depending on your state, you may be required to pay out accrued and unused vacation and/or PTO. If no state law exists, then payout will depend on your policies and procedures. If state law or your policy requires payout of these benefits, then you must do so. If your policies allow for forfeiture of these benefits and no state law exists, then you do not have to pay it out.
If you provide sick leave benefits, these can be forfeited unless your policy requires payout. State laws on sick leave generally do not require payout of these benefits, but it would be a good idea to double check this. Paying out severance or providing any other extra pay is not required.
As an at-will employer, giving a specific reason for termination is not required. However, in general, it is best to do so. When left to their own thoughts and conclusions, employees generally do not blame themselves for the termination. They look for reasons other than their lack of performance to blame for the situation. This can lead them to draw inaccurate conclusions, and perhaps result in some kind of claim against the employer. Therefore, it's a good idea to present your reasons upon termination.
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- If you give a reason, it does not need to be elaborate or detailed. It could simply say that work performance, though addressed several times throughout the employment relationship, was not satisfactorily improved upon, and this does not work long-term and results in termination.
- Keep it short and professional. Avoid defending yourself and going into details about everything. Since the issues should have been addressed prior to the termination, going through it all at the time of termination serves no real purpose. The decision is made at that point.
- Don't let the employee derail you by arguing, accusing you of things, or otherwise being insubordinate. Be prepared to shut that down by ending the conversation and asking the person to leave.
- Just about anything can be used against you, which is why it's best to be overly professional and to keep the conversation as brief as possible.
Whether you carry out the termination at the end or start of the day is up to you. It's a matter of what will work best overall. If doing this will hang over you throughout the day until it’s done, do it at the start of the day. If doing it at the end of the day before everyone has left works better in terms of managing it with your staff or minimizing disruption, then do that. There is no right or wrong.
One final note—state law determines when the final paycheck is due. You should determine those rules in advance in order to comply. The final check should include all wages through the last day of work in which the termination occurs, plus payout of benefits and any other extra pay that you’ve chosen to provide.
