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Employee Termination Checklist: What to Include In the Termination Process

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What to do when terminating an employee?

Employee terminations can be tricky and are dreaded by most managers and human resources professionals, but having a consistent termination process can help make the termination easier. Before you meet with your employee for the termination, take a look at the employee’s previous performance reviews to see if the issues have been documented. There should be documentation that the employee has been spoken to about the concerns the manager or employer has, so they are not taken by surprise that they are getting terminated. If the employer has decided that they have exhausted all options and they want to continue with the termination, then they will want to contact payroll to prepare the employee’s final paycheck to hand them at the time of termination. 

How to legally terminate employment in California?

Terminations are not easy in California; employers must have a detailed process to limit litigation. So how can employers protect themselves during a termination? Follow these steps below to practice a safe termination process: 

  • Create and Implement Clear Company Policies- Make it clear in job announcements, interviews, and the employee handbook that you’re an at-will employer, and the relationship may be terminated without notice.
  • Exhaust all options- Have you tried to coach the employee and provide them with feedback? Have you set the employee upon a performance improvement plan to help them succeed? 
  • Don’t Discriminate- Be consistent across the board. If you are terminating an employee for one thing, then that should be the standard for all employees. 
  • Put the reason for the termination in writing- Document the reason for the termination and provide previous examples that were addressed with the employee.

What is Involuntary Termination of Employment?

Involuntary termination is when an employee is let go because of a business decision that is outside of their control. For example, a company may be going through a large layoff due to economic purposes. 

Involuntary termination may include a severance agreement for the employee. An employer’s severance agreement should address the terms and conditions of the layoff and offers the employee a sum of money to help them in their transition period between jobs. 

What forms should be provided at the time of termination? 

California law requires employers to provide employees certain documents at the end of their employment. When going through the termination process with an employee, make sure they are given these required documents:

  1. Final paycheck acknowledgment- Signed by the employee
  2. For your benefit (Form 2320)
  3. COBRA notice
  4. Health Insurance Premium (HIP) notice 

This is not a comprehensive list; for the complete list of documents or an industry-specific termination checklist, please consult with your Bizhaven Business Partner. Termination forms will differ from state to state. 

How do employers comply with final paycheck laws at the time of termination?

When are final paychecks due? If an employee quits without notice, they must receive their final paycheck within 72 hours of leaving the company. If an employee provides their resignation with at least a 3-day notice, then the employer must provide the employee with their final paycheck on their last day on the job. 

Employers firing an employee must receive their final paycheck at the time of termination. Employees who quit and don’t receive their final paycheck within 3 days can recover the same penalties. 

Don’t forget to include the following in your final paycheck: 

  1. Pay for all hours the employee worked, including any overtime and double time. The final paycheck must also include payment of any unused vacation hours or PTO.
  2. Employers can not make the employee wait until the next pay period to receive their paycheck.
  3. If the employee requests to receive their last paycheck via mail, employers must comply.

How to invite an employee to a termination meeting?

When inviting an employee into a termination meeting, you should keep in mind that this should be done in person instead of over the phone or email. It is important for managers or employers to keep the employee’s emotions in mind. An employee who is getting terminated may act out or cause a scene; therefore, the best time to have this meeting is towards the end of their workday. Termination meetings should be held in a private office or conference room to provide privacy, even if most employees have left for the day. When having these meetings, it is a good idea to have a third party or an additional manager in the room as a witness. If the employee requests to have a witness in the room, it is best that the employee is allowed an observer, so they feel secure that they are not wrongfully terminated. 

Can an employee be terminated while on medical leave?

California law does not allow employers to terminate employees due to having an illness or medical condition or due to the fact that the employee is on medical leave. Although, an employee may be terminated while on medical leave if the reason for the termination is not related to the employee’s illness, medical condition, or reason for taking a medical leave. 

Can you terminate an employee while on workers comp?

Under California, law employees do have legal rights and protections from being terminated because of injuries or disabilities related to their work injury. Employers can NOT terminate an employee simply because they applied for Workers comp. Although being on workers’ compensation does not protect you from being fired or laid off. 

For example, if an employer had already planned to do a large layoff before an employee went out on Workers Comp, then they can still be laid off while on leave. 

This termination isn’t directed towards the employee for taking Workers Comp leave but rather because the employer had this layoff already planned. 

How to terminate an employee for poor performance?

Can an employee be terminated for poor performance? Yes. But what is the process for employers dealing with this situation? Employers should: 

  • Compile all of their documentation- Gather documentation of poor performance, violations of company policies, or warnings that the employee has received.  Document all performance issues building up to the termination. 
  • Coach the employee- Provide the employee with feedback to give them the tools to be successful in their position.
  • Create a Performance Improvement Plan (PIP)- If the employee has not taken the employer’s feedback into consideration, implement a PIP to provide detailed goals for the employee. 
  • Conduct a termination meeting- If the company has exhausted all resources, plan a termination meeting with the employee in the office. Provide them with examples for the termination along with their termination letter.

When it comes to terminating an employee for poor performance, the most important step is documenting issues along the way. Documentation, documentation, documentation!

How to write a termination letter to an employee?

A termination letter is a letter to the employee notifying them that their time of employment has come to an end. This letter is essential because it confirms the details of the termination and provides the employee with information about their final paycheck, employee benefits, and their termination date. 

Make sure that you have met with the employee prior to the termination letter meeting. The employer should have met with the employee prior to the termination letter meeting to discuss the issues and give the employer and employee an opportunity to address their side. 

Here are the components that should be included in your termination letter:

  • Employee name
  • Company name
  • The manager overseeing the termination
  • Date of termination
  • Reason for the termination
  • List of warnings that were given
  • List of items to be returned before leaving
  • Details about final pay and additional benefits

Terminations are never fun for a manager or employer to handle, but having a consistent and compliant process can help with a smoother transition. 

If you have more questions about your internal termination process, please feel free to contact Bizhaven at [email protected] or (916) 409-7677. 

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