How to Manage Employee Termination in the US


HR Insights for ProfessionalsThe latest thought leadership for HR pros

Monday, August 7, 2017

Firing employees is never easy, but there are certain steps you need to take to ensure you are protected legally, and to make the situation as painless as possible.

Article 5 Minutes
How to Manage Employee Termination in the US

One of the most difficult things you will ever has to do as a manager is to fire an employee. Dismissing someone can often have a number of consequences, and not just for the individual concerned.

As well as potentially putting pressure on the employee's financial, mental and even physical health, losing a member of your staff can have ramifications for the rest of your team. They are likely to be the ones that have to pick up the slack, and they may even become concerned about the security of their own job in the company.

This all means that it is essential to make sure the firing process is as simple and straightforward as possible. It may be extremely difficult to be clinical about terminating someone's work contract but it is the best way of ensuring that everyone understands what's happening and what the next steps are.

Aside from the pastoral side of firing an employee, you also need to make sure the necessary legal steps are taken so there won't be any negative backlash after they leave. This simple guide should help you better navigate the process of firing employees and ensure your own company is protected.


Deciding that your company needs to be smaller is one of the most common reasons employees are fired. The Federal Government supplies a number of resources to help businesses in this scenario.

The Worker Adjustment and Retraining Notification Act (WARN) is the federal statute that outlines the period of notice you have to give staff before you can actually end their contract. For example, if you have more than 100 employees you need to give them at least 60 days written notice when the termination will be affecting 50 employees or more.

However, there are a number of situations where this won't apply, such as if staff have worked at your company for less than six months or do less than 20 hours a week.

As a federal statute, this is the least that companies have to do and many states have enacted legislation that veto some of the exclusions, such as the 100-employee benchmark.

Performance-related dismissal

It's much easier to be legally sound in your decision to fire someone if your expectations have been clearly stated from the beginning. If your reason for letting an employee go is their performance or behaviour, you should keep documents of reviews or meetings where this has been discussed and objectives have been identified.

This makes it much less complicated should the employee in question accuse you of firing them because you are discriminating against them or because you just feel like it. If your employee has an employment contract then the reasons for termination are usually outlined. However, if you have a verbal contract, it is implied that you can only fire staff for cause.

That means that your reason for terminating the contract must come under one of the following categories; poor performance, dereliction of duty, an act of dishonesty or insubordination, or because the company needs to eliminate the employee’s position.

Avoiding unlawful termination suits

Implementing a progressive discipline policy can help protect your company against claims of foul play when it comes to firing staff. Although there is no federal or state law requiring you to have one, courts often judge those who don't more harshly as its absence can make it easier for staff to say they weren't given a fair deal.

This is because progressive discipline systems outline the necessary steps that must be taken to fire any employee. However, it's important that you also make it part of the policy that certain circumstances negate the need for this process and would lead to instant dismissal.

Typically, the policy will also dictate the penalties that employees will receive when they fall short of the your company's standards. This can start with oral warnings, which progress to written warnings, suspensions and then termination.

Understanding constructive discharge

Employees can claim constructive discharge if they feel their working conditions were so bad that they were forced to leave. This can be the actual physical environment in which your business operates or how they were treated. Being aware of the federal employment laws and the standards they outline will help your company stay within its boundaries and avoid lawsuits.

The exact wording can vary between states but broadly speaking it means employees have been forced to resign because actions and conditions were so "intolerable or aggravated" that any "reasonable person" would have resigned. This also usually includes that the employer must have had knowledge of the issues and chose not to remedy the situations.

Any action intended to humiliate, harass, or harm their career, can also be considered cause for constructive discharge. This can be an unexplained demotion or reduction in salary, assignment to menial work, encouragement to retire and threats of termination.

What else should you consider?

There are a few other things that you may not think of, as you're likely to be focused on the task at hand, but are important to make the process easier on both parties in the long run:

  • Location - Ideally you should officially terminate someone's contract in an area that is discreet and allows them the privacy they need. It's also worth thinking about how they will leave, they're unlikely to want to walk past all their ex-colleagues after hearing the news.
  • Witness - Having an HR representative with you when you fire someone can protect you should they say you did/didn't do something that you shouldn't/should have done. If you don't have an HR department, have a fellow manager accompany you.
  • Language - You need to make sure the words you say are clear and can't be misinterpreted. If in doubt, keep it short and simple, such as "I'm sorry but we're going to have to let you go." You should also ensure you don't make any misleading or unrealistic promises about offering them help in the future.
  • Don't argue - Some employees may get a little heated during the firing. However, you shouldn't engage with them and instead remain as calm as possible. Phrases like "I'm sorry that's how you feel" and "I understand it's difficult for you" can help to diffuse the situation.

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