Four Steps For Handling Employee Terminations The Right Way

See how OnPay stacks up against other providers with reviews from real users. Sit back and let our pros handle the hard stuff (for free.) See how OnPay stacks up against other providers with reviews from real users. Sit back and let our pros handle the hard stuff (for free.) One of the most stressful and least pleasant HR tasks in business is terminating an employee. But it’s still common, even when labor markets are tight.

In 2020, 5.3 million employees were either fired or laid off, but regardless of the reason for the departure, it can be an uncomfortable conversation for both you and them. Home U.S. Labor Laws How to Terminate an Employee Master employee termination with this step-by-step guide for compliance and business safety. Ensure fair, respectful, and legally sound terminations. In September 2024, 5.2 million employees separated from their jobs in the U.S., with 1.8 million of these due to layoffs or discharges​.

This high rate of turnover underlines the importance of handling employee terminations carefully and in compliance with U.S. labor law to protect your business. Terminating an employee is one of the toughest tasks a manager can face. Beyond the emotional and interpersonal challenges, there are complex legal requirements to follow. In the U.S., both federal and state laws regulate the termination process, requiring businesses to adhere to guidelines under U.S. labor law to avoid wrongful termination claims.

Firing an employee represents one of the toughest duties business owners and HR managers must confront. Employee termination generates significant stress while draining emotional reserves and creating numerous legal complications. In March 2025 U.S. employers disclosed 275,240 job cuts indicating an alarming 205% growth from 2024. The problem? Most companies are doing it wrong.

Poor handling of terminations can expose your business to costly legal battles, harm your reputation and lower morale among current employees. Employee termination isn’t just about saying goodbye. Employee termination follows a lawful procedure that includes specific requirements that differ depending on the state. Here are some best practices for handling employee terminations: Before terminating an employee, it is crucial to have a paper trail that outlines the reasons for the termination. Document any performance issues, disciplinary actions, or warnings given to the employee.

This documentation will serve as evidence if the termination is ever challenged legally. Having proper documentation is essential in any termination process. It helps ensure that the decision is fair and justifiable, reducing the risk of potential legal disputes. Whether it’s poor performance, violation of company policies, or misconduct, be sure to thoroughly document each issue and the actions taken to address them. Include specific dates, times, and details of incidents or discussions with the employee. This will provide a clear timeline of events and support your decision to terminate if needed.

Remember to maintain confidentiality when documenting sensitive information, keeping it secure and accessible only to authorized personnel. Adhering to company policies and applicable employment laws is crucial when terminating an employee. Familiarize yourself with the local labor and employment laws and regulations to ensure that the termination process is carried out in compliance with legal requirements. Review your company’s policies and procedures regarding terminations to ensure consistency and fairness in handling employment terminations. Be mindful of any contractual obligations, such as notice periods or severance packages, and ensure they are properly followed. It's easy to get excited about bringing a new team member on board.

It's a lot harder to garner the same kind of enthusiasm for terminating an employee. It is an uncomfortable situation for all parties involved that, unfortunately, is a part of working life. We asked members of the Forbes Human Resources Council what an employer should keep in mind when preparing to terminate an employee. Empathy and dignity are at the top of the list to guide any other decisions made by HR. Think about the person at the end of the decision and do what you can to keep them in mind as you craft your approach. Is there a day or time of day that fewer people are in the office and this person could have more privacy during this difficult time?

Is there a location that better serves this conversation and gives this employee the ability to not have to walk through the office after learning this news? Think of ways you can add in some thoughtfulness and intent in this process. - Lisa Whealon, GL group, Inc. A culture of consistent enforcement of clear policies and procedures is essential here. This means that either well-communicated progressive discipline has led to the final meeting, or the employee is undoubtedly aware of a zero-tolerance policy. No one should be surprised by dismissal.

The meeting should be kept short and to the point. Arguing the facts at this time is counterproductive and should instead be met with a simple, "the decision is final." - Cristin Heyns-Bousliman, Blake's Lotaburger, LLC No one likes to separate employees from their job. Taking a humane approach can provide a valuable soft landing for the employee and mitigate risk for the organization. Offering severance for all separations (except for cause), out-placement, and above all treating them with dignity and respect will go a long way to making the transition more palatable. - John Sigmon, johnsigmon.com

Terminating an employee is never easy, but handling the process with professionalism, empathy, and legal awareness can prevent costly mistakes and protect your company’s reputation. Whether it’s due to performance issues, misconduct, or company downsizing, the way you approach an employee’s departure matters. Here’s a step-by-step guide to ensure a smooth and compliant termination process. Before making a termination decision, review employment laws to avoid wrongful termination claims. Some key areas to check: ✅ At-Will vs.

Contract Employment – In Arizona and many other states, employment is “at-will,” meaning employers can terminate employees for any reason (as long as it’s not illegal). However, contracts or company policies may impose additional requirements. ✅ Anti-Discrimination Laws – Ensure the termination is not based on protected characteristics such as race, gender, age, disability, or religion. Terminating an employee is never easy, and if you're in this position, you're likely feeling a mix of concern and uncertainty. You want to do what’s right for your business, but you’re also worried about the legal risks of making the wrong move. The last thing you need is to face a lawsuit because of a misstep.

In this article, we’ll walk you through exactly how to navigate the termination process—ensuring it's handled professionally, fairly, and within the bounds of the law—so you can protect your business and your peace of... Let's get started. Whether you're an employer dealing with poor performance, misconduct, or simply downsizing, knowing the proper legal grounds for employee termination will help you handle the situation reasonably and protect your business. During the termination meeting, inform the employee of the reason for their termination and provide details about their final paycheck and any severance package they are entitled to. Handling the process carefully and using best practices will help reduce the risk of legal consequences. Before you even begin the termination process, ensure you're putting yourself and your company in a safe spot to avoid unlawful termination.

Here's how to do that. Letting an employee go is tough for any manager or HR professional as it can affect the person concerned, their coworkers, and the whole company. It's important to handle this carefully and legally to keep a positive workplace and protect the company's image. Learn a step-by-step process on how to manage a smooth employee termination in this short but insightful guide. Before you start, understand and carefully assess why you're terminating the employee. There are two most common reasons: performance issues or misconduct.

These terminations happen when an employee doesn’t meet the company’s standards. Document these issues through reviews, feedback sessions, and any formal warnings. This involves behavior that breaks company rules, such as theft or harassment. Keep detailed records of these incidents and any investigations. Aside from the two most common reasons for termination mentioned above, there is also another one: redundancy and restructuring. There are instances when you need to let employees go because of business changes, such as downsizing or automation.

Make sure to be clear about the business reasons behind these decisions to avoid issues.

People Also Search

• Four steps to handle employee terminations the right way | OnPay
• How to Terminate an Employee: A Step-By-Step Guide for ... - Workyard
• Essential Steps for Handling Employee Termination Legally and Fairly
• Best Practices for Handling Employee Terminations - From an Employment ...
• 11 Ways To Gracefully Handle Employee Termination - Forbes
• How to Handle Employee Terminations the Right Way
• PDF A Guide to Handling Employee Terminations Professionally and Legally
• How To Terminate an Employee (And What Not To Do) - Indeed
• How to Properly Terminate an Employee Without Legal Risk
• How to Properly Handle Employee Termination - Salary.com