What you need to know about terminating an employee in California
Hello again. Today we are going to talk about a tough but necessary subject for any California business owner to know. How do you terminate an employee in California? How do I reduce my risk for a wrongful termination claim from an employee? After reading this post you should know the answer to these questions and more, including the importance of developing a formal termination process for your business!
First Determine Your Employees Status
The first thing you need to do is to determine which category your employee falls under. This can either be a contract employee or an at-will employee. Most California employees are at-will which is exactly what it sounds like. They are there under their and your will and can leave or be terminated at any time. This of course is not as simple as it sounds. They can only be terminated provided its not for any reason that falls under wrongful termination.
A contract employee is a little different because they can only be terminated based on what their individual contract says. With a contract employee you will usually be bound by what the contract says regarding their termination. If you feel you need to fire a contract employee, immediately review the contract you have with that person in detail.
Have a formal process for terminating employees… and FOLLOW IT!
There are plenty of potential pitfalls and landmines when terminating an employee. The BEST WAY to minimize headache and risk associated with this is to have a formal process already defined. Do not wait for an unpleasant situation to come up where you need to terminate an employee right away with no formal process to follow. This can lead to mistakes and potentially open you up for a wrongful termination suit by the terminated employee. Another benefit to having a formal termination process is you are much less likely to miss any steps in the termination process.
Create and Keep Records!
Make this process as formal and professional as possible! Create written documentation of the separation process between you and this employee that includes dates, reasons and (hopefully) signatures from the employee expressing their understanding of the situation. Keep those records on file! I cannot stress enough how important it is you keep this information on the employee for access later! An employee can make a wrongful termination claim against you 6 months or even a year or two later! We have also seen some of clients have a claim made against them who were shocked because they did not expect it from the employee. Having these records if you end up with a claim will be very, very valuable!
Settle all outstanding issues with the employee (remaining salary…etc)
With your employee leaving you will need to make sure you handle all the details and get them everything they are owed. Most employees will be most concerned with their final paycheck. Remember you owe them their final pay check on their last day not on the next scheduled pay period! You will also owe them any of the vacation time they accrued but did not use. Getting them their final paycheck in a timely manner with little hassle will greatly reduce their desire to come back later with a complaint against your company.
Try to leave on the best terms possible with the employee
No matter how contentious the situation becomes with your employee try to stay calm and professional! This is where a formal termination process will come in handy. If you are following company policies its a little easier for the parties not to take things personally. Remember your goal is to separate the employee from your company quickly, legally and without hassle! If you make things personal with the problem employee they are much more likely to want to get back at you with a complaint. Even if you personally dislike the employee try not to let that effect your decision making (harder said then done I know). Think about it. If you do things by the book and professionally the termination should go smooth and you will not have to deal with the person any more. If you make things personal and upset the person they are more likely to try to file a complaint which will not only waste your time and money but keep the person who is causing you stress in your life for a while longer!
Much better to take the higher road and get the situation over and done with as soon as possible.
If you follow these tips you should have most of your bases covered.
If you are a California business owner who has questions on the process of terminating an employee or any other employment matters contact our professional labor attorneys today. We specialize in Employer defense and only protect business owners!
We are professional labor attorneys who specialize in defending California business owners. Contact Us Today!