Firing an employee is never fun. But even less fun is a lawsuit from a former employee who sues you for wrongful termination. So if you need to fire an employee from the job, it’s best to protect yourself from future legal trouble by taking detailed records throughout the process. That way you have the documentation you need to prove your reason for firing the employee was indeed valid and wasn’t due to discrimination or retaliation.
Start running payroll and benefits with Gusto
As a reminder, common reasons for firing an employee include if they broke a law or company policy, or if they failed to meet the requirements of the job. Records are important for both reasons. The key is to document everything about their time with you. As a best practice, keep records that show:
- The employee knows what is expected of them
- Times that employee didn’t meet expectations, and
- Incidences when that employee violated policies or laws.
Here’s a step-by-step guide to getting documentation in place:
1. Start on day one
Believe it or not, it’s best to start documenting an employee’s performance on their very first day. Greet each new employee with a comprehensive employee handbook that explains your company’s policies and procedures. Then hold an onboarding session to review the material.
Documentation step: after the onboarding session, have new staff sign a document that acknowledges their awareness of all the policies in the employee handbook. Having them sign it can keep employees from using the, “I didn’t know that was against the rules” defense later.
2. Keep track of issues
If an employee begins violating policies and procedures, or if they are warned that their work is not up to par, make sure to record each and every incident.
Documentation step: after each incident, gather as much information—the who, what, where, when, and even why—as you can from those who were involved. Have each person sign and date their statement.
3. Issue warnings
Call the employee into your office and discuss their behavior. Depending on the incident, you might do this more than once. Discuss next steps, if any, and make sure the employee understands the consequences of their actions and the repercussions of continuing their behavior.
Documentation step: create a document that details the infraction(s). Have the employee sign that document after each meeting to capture the fact that they were warned about their behavior and its consequences.
4. Terminate the employee
If the employee does not change their ways, or if any of their infractions have hurt individuals or the company, it’s time to fire them.
5. Draft a separation agreement
If you need to fire an employee, it’s best to have them sign a separation agreementupon termination. The signed separation agreement waives that employee’s rights for, among other things, suing you for wrongful termination or additional severance pay.
How do I terminate an employee?
When it’s time to terminate an employee, get your ducks in a row before you have the conversation. Review this checklist for the full list of what documentation you need in place when you need to terminate an employee.