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Employee Termination Compliance

Learn about firing employees without breaking laws with our training products

Employees leave organizations. Many times they leave on their own to pursue better opportunities or switch careers but, on other occasions, the organization may consider firing an employee. There could be tens of reasons for considering that option, including inappropriate behavior with colleagues, consistently poor performance, extraordinary bad economic conditions, etc. In every such case, however, the employer has to demonstrate ample caution, consideration, and due diligence before terminating an employee.

Firing an Employee without Due Diligence

In every instance where an employer fires an employee, there is a sizeable risk of retaliation. This could come in the form of a lawsuit, which is the usual course of action when a terminated employee feels they were unfairly removed from their employment. In some cases ? and these are situations where high-profile organizations and professionals have a public falling out ? the employee may start a smearing campaign through the forms of media easily accessible today.

In either case, the resulting circumstances can cause lasting damage to the employerís reputation in the industry and brand. A lawsuit may take a long period of time to unfold and conclude, during which time external stakeholders may not readily do business with an organization that is involved in a lawsuit of wrongful employee termination.

For these reasons, organizations have to be careful with decisions of firing an employee. They must follow stringent protocols and ensure they have exhausted all options before removing the person from their job.

Employee Termination Compliance Resources

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Termination Compliance

Proper termination compliance is the only way employers can reduce the risk of facing legal issues for their decisions. The law protects the rights of both the employer and the employee and, as the employing organization, it is your job to ensure you do your part before terminating the employment contract. Organizations must follow the applicable law and establish clear procedures of due diligence to ensure termination compliance. However, there are a number of reasons why an employer may feel the need to let an employee go immediately. These reasons may include:

  • MISCONDUCT AT WORK: This includes breaking rules after sufficient warnings, harassing a colleague, misusing office property, etc. Misconduct is one of the reasons why immediate termination often happens. However, this may lead to retaliatory litigation and such consequent problems. The employer may instead use a temporary suspension policy in times of employee misconduct. This allows the employer to examine the incident in detail and take necessary steps to ensure termination compliance while the employee is absent from office premises.
  • ECONOMIC LAYOFF: Another major reason for immediate employee termination may be an economic layoff. An example of this situation would be the numerous organizations that went bankrupt during the recession of 2008 and hundreds of thousands of employees in the US were laid off. More complex examples would be times when an organization fails, or joins another organization in a merger, with conditions that include employee layoffs. While employees could not gain much from litigating against a whole countryís economy in a recession, layoffs due to an organizationís circumstances can cause legal issues.
  • There may be other situations as well where an employer would decide to terminate an employee. However, termination compliance requires them to take a number of steps to demonstrate due diligence:

    1. Document the complete process, including details of incidents that led to the termination and any warnings or notices issued to the worker previously.
    2. Address benefits appropriately and make sure a final paycheck is issued that includes all kinds of outstanding wages, bonuses, and payments.
    3. Offer severance pay if appropriate.

    Terminate Employees with Appropriate Severance

    Situations like economic layoffs, and others, where there is a risk of legal action, employers find it beneficial to arrange an exit interview and offer the terminated employee severance pay. This payment is based on the position they are leaving and an estimated value of losses their legal action could result in. In return, the employee signs a release waiving all rights for legal action.

    This information must help you understand the complexities of employee termination. However, we have more detailed knowledge to share with you with our numerous webinars and online courses about the various problems associated with employee termination, including:

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