Avoiding a Claim: Reduce Your Risks by Taking These Steps Before Terminating an Employee

Making a mistake when firing an employee can result in a wrongful termination claim. The four steps outlined below can help guide you through the process and reduce the likelihood of a claim.

Step One: Conduct a Pre-Termination Analysis
A pre-termination analysis requires you to carefully think through your decision to terminate a particular employee. Oftentimes, the process exposes a potential risk that you had not reviously factored into our decision. Review the employee’s employment history to identify any “Red flags”. A red flag would be any fact or characteristic that tends to make the termination risky. For example, has this employee complained of harassment, discrimination, working conditions, wage and hour violations, etc.? The termination is risky whether or not the complaint has merit. Also, consider whether the employee is a member of a protected class (e.g., gender, race, age) or if the employee has taken a medical leave. Any of the above circumstances may encourage an employee to file a claim after termination.

Step Two: Get Professional Help, if Needed
If the employee you want to fire is in a protected category identified in Step One, you should consult with an HR professional or attorney prior to taking any action against the employee.

Step Three: If No Red-Flags, Complete Required & Recommended Forms/Polices
Processing a termination can be confusing. The law requires that certain forms and procedures be followed. Both federal and state laws apply to the termination process. Be sure to consult your individual state’s laws prior to terminating an employee.

Make sure you understand the following:

•  Final paychecks
•  Acknowledgment of final paycheck
•  COBRA/HIPPA notifications and information
•  Any unemployment forms
•  Change of relationship form
•  Return of company property

Step Four: Final Review
As a last step, review all the paperwork and notes that you have regarding the termination and then document your final review. The purpose of this step is twofold: one, you can verify that all the required procedures have been followed and two, you will have one last opportunity to document the steps that you have taken to minimize the risks of the termination. 

No termination is completely without risk; however, you can mitigate the risks if you follow the steps above.

© 2013 ePlace Solutions, Inc October 2013 Newsletter