Jared Strong (name has been changed) tried very hard to soften the blow when he had to lay off an employee for financial reasons. Instead of telling her in the cold, hard office, he took her to a restaurant where he imagined the nicer setting and food would lessen the shock. After telling the single mother of two that today was her last day, she slapped him across the face and said, “I can’t believe you made me miss my son’s soccer game for this!” before storming out.
Terminating an employee is never easy, and there are no guarantees that you won’t be slapped, but there are a few things you can do to make it easier on everyone.
They should see this coming. If the termination is for performance reasons, there should have been numerous discussions about performance. Perhaps even a formal performance improvement plan (PIP) in place. In a performance termination, the person should absolutely know it’s coming. This knowledge, by the way, won’t stop a bad employee from protesting that he did nothing wrong when you actually do terminate. But, you’ll have all your ducks in a row to begin with, and all the paperwork in order.
But what about a layoff, like Jared Strong faced? While there is no way to avoid the shock that this particular employee has been chosen for layoff, the employees should be aware of the financial problems or of the fact that you’re planning to reorganize. That way, they at least understand why and it’s less of a shock.
Know your employee’s plans. Jared Strong’s employee had skipped her son’s soccer game in order to go to the restaurant where she lost her job. This was a major failure on Strong’s part. When you’re preparing to terminate someone, dig a little deeper to be prepared. For instance, does your employee carpool? If so, how do you propose that she get home from work if her ride is still working? Or, if she’s the driver, how will her passengers get home? You don’t want your just-fired employee sitting in the front office waiting until 5:00 to get a ride. If necessary, the business needs to spring for a taxi.
What about your employee’s personal life? If you know her spouse is undergoing cancer treatment and that they rely on health insurance from your business, you can be prepared with the answers to questions regarding continuing insurance through COBRA. If your employee has been talking about buying a new house and you know you’re going to terminate him in a month, it’s a kindness to give him a heads up before he signs that contract.
Sometimes, of course, you don’t know. But when you do, you should change how you notify someone to lessen the pain.
Have that paycheck ready. California has very strict laws about when people have to be paid. If you terminate someone, you need to be ready to hand them their paycheck on the last day. Even if you normally do paychecks via direct deposit, present your employee with a live check. California considers unused vacation as earned, and you need to pay that out too. In full. After handing your (former) employee his full paycheck, make sure you ask him to sign something saying he received it. The last thing you need is legal challenges over this law. Plus, it makes your employee’s life easier not to have to worry about the last paycheck.
Get all levels of approval. If you own the business, you don’t need anyone else’s approval, of course. If you aren’t the business owner, then you do. Even if you explicitly have hire/fire responsibilities for your own staff, you need your boss and HR to sign off. Why? You need your boss to be in full agreement because it’s a disaster if you say, “Today is your last day,” to your employee and she replies, “Well, Bob likes me! Let’s just see what Bob has to say about this!” and if Bob doesn’t have your back 100 percent, not only is it possible for the termination to not go through, but you have now lost the respect of all of your employees. If your boss won’t back you up 100 percent, skip the firing.
HR needs to sign off, not because they have power, but because they are charged with protecting the company from lawsuits involving employees. There are all sorts of reasons why you should be cautious about firing someone, and HR can help you navigate through that. It’s a huge pain to make sure all is are dotted and ts are crossed, but it’s absolutely necessary to protect the company from lawsuits. HR can always be overridden by the big boss, but do so at your own risk.
Offer severance. Unless the reason for termination is that the employee was selling drugs out of the loading dock (or some equally illegal activity), offer severance. Why? Because the goal of severance is to make the person go away quietly. The more severance you give, the more likely they’ll leave. People have a hard time thinking of themselves as poor performers, so when you tell them their jobs are ending, their first thoughts are often that you are discriminating against them because of race, gender, age, national origin or any number of other illegal reasons. Most likely you are not. And if you’ve gotten HR to go over the termination reasoning with a fine-tooth comb, you’re probably legally covered. That said, the person might not believe that. And any time you have to deal with a lawsuit — even one you will absolutely win — it’s expensive and time consuming.
So, enter severance. In exchange for severance (general guideline: 2-weeks pay for every year worked, but more is better if you can afford it), you have your employee sign what is called a “general release.” This needs to be written by an employment attorney because it needs to contain specific language and be up to date on all laws. This document essentially says, “If you wave your right to sue us, we’ll give you three months pay.” (Not all rights can be waived, so check with your attorney.)
Don’t lie. Firing someone is hugely stressful. As such, sometimes you’re tempted to lie about the reason to make it “easier.” Don’t. If you’re terminating the person because of performance, say so. If you’re terminating the person because the budget won’t allow you to have her on staff any more, say so. If you would never, ever, not in a million years, rehire this person, don’t say, “I really hate to let you go, but when things pick up again, we’d love to have you back!” This makes you feel better, but it gives the employee false hope. And false hope means this person will check your website every day, apply for every open position you have and eventually file a lawsuit for failure to hire. Just be honest. It solves a lot of problems.
When in doubt, double check with the lawyers. If you have a business, you need a labor and employment attorney. Not a full-time one, but you need to have one that you can contact on a case-by-case basis. Firing someone almost always requires a double check with the attorney. Employment law is complex (even more so in California than other states) and $500 to the attorney today can save you $500,000 tomorrow.
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Great information! Definitely covers all the bases on severance protocol. And I'll bet Jared never makes that mistake again ;-) Ouch!! I do feel for the single Mom though and can certainly understand her emotional response in that situation.