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EPLI: How to Go About Terminating Employees – Part II


 

EPLI How to Go About Terminating Employees – Part IIIn our previous blog, we discussed some of the issues and concerns employers need to be aware of prior to taking the steps to terminate an employee. This is vital in helping to stem possible employment practices-related lawsuits. Also important to staying out of court when it comes to ending an employee’s employment is how one goes about the termination and what is said.

There is no way to get around causing some emotional pain when letting go of an employee. Therefore, it’s important to state the reason for termination with the utmost care. In fact, a short statement indicating that it is no longer in the best interest of the company to continue the employment relationship suffices. There is no reason to go into a long explanation that will only serve to drum up more questions. All of the concerns and issues involving the employee’s employment should be well documented in his or her file. It’s also considered good practice to have the employee’s direct supervisor be the one to inform the employee of the termination, and have a member of the company’s management team or HR and/or an attorney present as well. This will demonstrate that the decision was made collectively, rather than by an individual, but nevertheless with input and approval of someone who has firsthand knowledge of the employee’s job performance.

The timing of the termination should be immediate and carried out prior to the end of the workday if possible. If not, then the termination should be conducted at the start of the following workday (for which the employer will still have to pay the terminated employee). Letting someone go at the end of the workday is generally not recommended. When a terminated employee is leaving the premises the same time as all other employees there is a potential for employee interactions that might encourage inappropriate behaviors and other avenues for litigation.

All outstanding wages, salaries, expenses, and unused vacation pay owed to the employee must usually be paid immediately upon termination. It’s also a good practice to have the final paycheck available at the termination meeting to avoid claims of withholding pay. An employer may offer the employee additional payment in exchange for the employee’s agreement to waive their right to bring a lawsuit for wrongful termination and related claims. This is commonly known as “severance pay.” Whenever possible, it is best to reach a severance agreement with the employee who is to be terminated. This will help ease the transition for both the employee and the company. In particular, it will help the employee by providing them with extra income to bridge the gap.

At the termination meeting, the employer should ask for the employee to immediately turn over all company property in their possession. This includes key cards, keys, and other devices used for employee access to the company’s premises as well as any other company property that the employee has at their home or work station. The employer should gather all of the employee’s personal belongings before the meeting and turn them over to the employee during the meeting. The terminated employee should not be permitted to return to their work area to “gather” their things or to speak to other employees. The employee must also be notified that they have a duty to maintain the confidentiality of all company trade secrets and passwords.

Care should also be taken to delete and remove the terminated employee’s name from company letterhead, stationary, emails, and/or websites following the termination.

You should also have the employee review all signed agreements from their time of hire to remind them you intend to enforce these agreements.

There are also company policies regarding future references and COBRA among other issues to consider. In addition to sound employment practices, make sure your business has a comprehensive Employment Practices Liability Insurance (EPLI) insurance program in place. At Axis Insurance Services, we specialize in EPLI coverage and would be happy to review your insurance policy and provide you with an analysis and recommendations. Give us a call at (877) 787-5258.

 

 

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Blogged on: September 16, 2015 by Mike Smith
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