{"id":225273,"date":"2023-05-09T16:49:24","date_gmt":"2023-05-09T16:49:24","guid":{"rendered":"https:\/\/www.markperlbergcpa.com\/perlbergs-best-practices-for-terminating-an-employee\/"},"modified":"2023-05-09T16:49:24","modified_gmt":"2023-05-09T16:49:24","slug":"perlbergs-best-practices-for-terminating-an-employee","status":"publish","type":"post","link":"https:\/\/prosperlcpa.com\/blog\/2023\/05\/perlbergs-best-practices-for-terminating-an-employee\/","title":{"rendered":"Perlberg\u2019s Best Practices for Terminating an Employee"},"content":{"rendered":"
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We\u2019ve all got a bit of FOMO about FOMC\u2019s (Federal Open Market Committee\u2019s) big meeting this week<\/span><\/a>, waiting to see if yet another interest rate hike will be coming. Most indicators say likely.<\/p>\n

Since March 2022, there have been NINE such increases to interest rates all in an effort to deter a recession, which the Fed is still optimistic about being able to do (even though most of the economic recession indicators are blinking red). We\u2019ll reserve any enthusiasm until we see Q2 results (and beyond).<\/p>\n

My reservations are even more fully enforced by witnessing First Republic Bank<\/span><\/a> go belly up and get gulped up by bigger fish JP Morgan this weekend. Looks like the banking \u201ccrisis\u201d is holding on a bit.<\/p>\n

It\u2019s difficult to not get panicked in these moments. But hear me on this: Don\u2019t panic.<\/u><\/i> Instead, let\u2019s talk about what this means for you and your Atlanta business right now<\/strong>. <\/p>\n

More belt-tightening is a good start. <\/p>\n

But maybe you\u2019re not sure exactly what to tighten up and still keep profits moving forward. Or maybe you\u2019re not seeing a trend in your numbers over the past year because you haven\u2019t actually sat down and analyzed them. <\/p>\n

That\u2019s where my help begins. <\/p>\n

Now, one of the first ways that many Atlanta businesses often think to cut expenses in a difficult economy is staffing. It\u2019s an unfortunate reality of running a business. And one that a lot of businesses (including big ones like Google and Meta) are in the throes of right now.<\/p>\n

But as a small business owner who often feels that kind of action personally, you know there\u2019s a right and a wrong way to do it. Take a look at these best practices for terminating an employee\u2026<\/p>\n

Perlberg\u2019s Best Practices for Terminating an Employee<\/strong><\/span>
\u201cSo many amazing opportunities arise when a chapter of our life ends.\u201d – Miya Yamanouchi<\/i><\/span><\/p>\n

As you well know, running a company is both a joyful and difficult thing. One of those uncomfortable aspects is figuring out how to fire one of your workers. Even though it\u2019s not one of the sweeter parts of being a boss\u2026 sometimes you just have to do it.<\/span><\/p>\n

And when you do \u2014 you want to do it well. That\u2019s why I\u2019m sharing the best practices for terminating an employee that I\u2019ve learned over the years.<\/span><\/p>\n

It doesn\u2019t have to be a headline heave-ho like<\/span> <\/span>Tucker Carlson or Don Lemon<\/span><\/a> to ignite problems for your business. Walmart\u2019s been hit with<\/span> <\/span>lawsuits<\/span><\/a> after firing workers who have chronic medical conditions. Delta Airlines came to the brink of trial before<\/span> <\/span>settling an age-discrimination claim<\/span><\/a> after a termination. Grievances both in and out of court mushroomed after Twitter\u2019s<\/span> <\/span>recent purges<\/span><\/a>. But terminations have also stood up in court despite accusations as serious as discrimination and lack of documented cause. <\/span><\/p>\n

Although these stories may make it sound impossible, you can<\/i> let an employee know it\u2019s time to move on without creating a headache for you and the company. It just takes a little bit of intentional thought.<\/span><\/p>\n

Best practices for terminating an employee: Do you need to?<\/strong><\/span><\/p>\n

Before you put in all the work needed to substantiate a firing, make sure the move is necessary and that all the signs are there. <\/span><\/p>\n

Is the employee engaged in his or her own work? Or are they spreading problems among your customers and bad behavior among your other employees? Have they lost their professionalism or been disrespecting your senior staff? Have they <\/i>consistently failed to hit their documented KPIs?<\/i> <\/span><\/p>\n

If so, it\u2019s time to have the conversation \u2014 but don\u2019t fire someone on the spur of the moment by the Keurig machine in the break room. You have to prepare. <\/span><\/p>\n

We mentioned documented KPIs. Did you know that <\/span>only half<\/span><\/a> of workers in a recent survey said they know what was expected of them on the job? Don\u2019t even think about letting someone go unless you\u2019re certain they knew their duties and simply failed to perform them. <\/span><\/p>\n

Also realize that you, the employer, do have some advantages in this situation. Most states are \u201cat-will,\u201d meaning you can fire an employee at any time for any reason. (If the employee is under contract, you will have to follow the guidelines spelled out in it, though.) <\/i><\/span><\/p>\n

There are potential potholes in at-will terminations. For instance, if you told an employee at hiring that you can only fire them for \u201cjust cause,\u201d guidelines have been inadvertently set for a future firing \u2014 and you can open the door to a lawsuit if you fire an employee for reasons outside that agreed-upon definition. <\/span><\/p>\n

It\u2019s also worth mentioning that \u201cdiscrimination\u201d based on age, race, religion, sex, national origin, or a disability that doesn\u2019t interfere with work violates federal (and maybe state) law. It\u2019s the same for firing someone in violation of \u201cpublic policy,\u201d aka a protective statute or constitutional right.  <\/strong><\/span><\/p>\n

Best practices for terminating an employee: Five (legal) steps<\/strong><\/span><\/p>\n

If you\u2019re going to fire, here\u2019s what you should do, in order: <\/span><\/p>\n

1. Document in writing<\/i> their violations of company policy or accepted behavior and make sure the employee acknowledges having read the document. You\u2019ll also need a performance-improvement plan that gives your employee the chance to correct themselves. <\/span><\/p>\n

2. Review your employee handbook<\/i> (which your employee should have received at their hiring) and its firing policies. This book should spell out disciplinary policies, potential reasons for termination, and consequences you now have to oversee and administer. Follow this book\u2019s procedures precisely<\/i>. (If you don\u2019t have these policies in writing, now would be a good time to do that. Your future self will thank you.)<\/span><\/p>\n

3. Collect interviews, documents, and evidence to back up your decision.<\/i> Also assemble your list of what you\u2019ll have to collect from the employee, such as the company ID and any company equipment. <\/span><\/p>\n

4. When the talk comes (don\u2019t fire via email or text), keep it to the point and stick to facts.<\/i> Sit down in a quiet spot with one witness, preferably from HR. Don\u2019t bully or belittle the employee \u2014 but also don\u2019t sugarcoat your reasoning, and do not debate your decision. <\/span><\/p>\n

5. Give the employee information<\/i> about their benefits, including COBRA insurance continuation, their last paycheck and payment for PTO time, and unemployment options, among others. <\/span><\/p>\n

This isn\u2019t a legal point, but consider having them kindly escorted off your premises after you meet. People can get upset when they get fired, and when upset, even people you think you know can behave in surprising ways. <\/span><\/p>\n

Best practices for terminating an employee: Final paperwork<\/strong><\/span><\/p>\n

The termination letter officially declares the termination of employment \u2014 and, when clearly written (i.e., it can stand up in court), it legally protects your company in the future. <\/span><\/p>\n

The letter should cover the reason for termination, when it takes effect, final compensation, anything expected of the employee now, and contact information if the employee has questions. If you fired the employee for cause, give details such as the policies violated, a timeline of events, and performance reviews. <\/span><\/p>\n

The entire letter should sound professional and direct. Have your Atlanta lawyer look it over before you send it.<\/span><\/p>\n

 <\/p>\n

If you are considering letting an employee go, please know you can go beyond these best practices for terminating an employee, and you\u2019re welcome to ask us to look at any termination documents. We\u2019re here to make the process as smooth as possible for you.<\/span><\/p>\n

Supporting you,<\/span><\/p>\n

Mark Perlberg<\/strong><\/p>\n

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