Employee Termination Law

To protect yourself against a lawsuit by a
former employee, consider having that employee sign a release from liability as
he or she is departing. Include a clause where the employee grants you
permission to provide information to any future prospective employers and
promises not to sue you for providing such information.

In return for the release, offer some sort of
benefit. A court is much more likely to uphold an agreement where the employee
got something substantial in return for giving up his or her rights. Finally,
check with an attorney in your state, as each state requires specific language
to be in a valid release.

I just fired an employee, what do I tell the
other employees?

In most cases, it’s best not to tell other
employees that you fired an employee, or the reasons behind the firing. Rather,
tell other employees that you simply had to “let the employee go” or
say that “so and so is no longer with the company” and don’t go into
any detail. Consider making a brief statement to the other employees, in a
neutral tone that lets existing employees know who will be taking over the
departing employee’s duties.

Avoid the temptation to gossip or speculate
and don’t be spiteful towards the departing employee, no matter what they did.
Gossiping or bad mouthing a former employee can land you in court for
defamation, so play it safe and be professional.

Should I be careful in giving an employment
reference for a worker I had to fire?

When you fire the employee, tell them up
front that you won’t be able to be a positive reference for them. This alone
can avoid potential problems, since most employees will get the hint and not
use you as an employment reference.

If you do end up serving as an employment
reference for a former employee whom you fired, then the best practice is to
keep your comments brief and factual. Telling a potential employer anything
about the former employee that you can’t verify as factually accurate is
grounds for a defamation lawsuit, so be very careful what you say.

Do I legally have to give severance pay to
employees when they leave?

Generally, there is no legal requirement to
offer severance pay unless you’ve led your employee to believe that they are
entitled to receive some form of severance. Common ways this can happen are
promises made during an initial interview, employment contracts, talking about
offering severance in an employee handbook or simply offering severance pay
routinely to other employees. If you do routinely offer severance to employees
but don’t want to offer it for certain other employees, make sure you put it in
writing, because offering severance in a routine fashion may create a legal
basis for an employee to believe that he or she is also entitled to severance
pay.

Many employers do offer severance pay for
long-time employees because severance pay can help a fired or laid off employee
make the transition to a new job much easier. Severance packages also reduce
feelings of anger among former employees which can lead to fewer lawsuits and
can also serve to soothe any guilt from employers for having to let employees
go.

Are there any legal requirements about when I
have to give employees their final paycheck?

Most states have laws that require employers
to send out final paychecks by a certain date after an employee has been
terminated. This may mean that normal payroll processing time would be too
slow, so make sure that people in payroll are aware it’s a final check that
needs special attention and priority. Finally, in many states the time you have
before the final paycheck is due is often based on how the employee was
terminated, so check your state’s laws to find out how long you have.

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