How can you avoid the anger of fired employees that might later manifest itself as a lawsuit? Follow these guidelines …
Termination pay is one of your most complex and confusing duties. Don't go it alone … and don't try to guess at the compliance rules. The risks are way too high. Make sure you have the information you need to make the right decisions and avoid expensive fines and lawsuits. Attend our new webinar on termination pay.
1. Keep your cool. Avoid heightening an already emotional situation. Don't spring the news suddenly, shout names or berate the worker in front of other employees.
2. Avoid surprises. Workers should never be completely surprised by a termination. Give your employees regular feedback on their performance, and suggest methods for improvement.
At the very least, progressive discipline proves to a court that you had valid reasons for terminating a worker.
3. Play by the rules. Follow your established discipline policy. If your handbook says you'll provide a verbal warning, a written warning and a probationary period, then do each step.
Of course, your handbook also should give you the right to immediately terminate workers who engage in serious misconduct. But before skipping progressive discipline, be sure of your facts. It's not enough to hear rumors of wrongdoing from others. Conduct a thorough investigation, and then ask the employee for his side.
More lawsuits and fines are triggered by termination mistakes than at any time during the employees' tenure. And pay mistakes lead the way. Make sure you're in compliance.
4. Watch what you say. Workers will remember whatever you say on the day you fire them—or in the preceding weeks—in the worst possible light. While you should always avoid making statements that could be construed as discriminatory, you should be especially cautious if you may have to fire a worker.
5. Don't be too kind. Sometimes you may feel compassion for a worker you must fire, but don't express your feelings in the wrong way. If a worker's performance is substandard, don't offer compliments on his job performance. Doing so may make you feel better, but it will only infuriate the worker because it will appear that he is being fired for no reason. And that can easily spark a wrongful termination suit.
Also, when hiring workers, don't make promises you can't keep. Some courts have taken general statements, such as "We hope you'll be with us a long time," as a promise of perpetual employment.
6. Keep quiet. Don't discuss your reasons for the termination with other employees. It's enough to say, "Jamie will not be working with us anymore." Some employers have spoken too freely about the reasons for a departed worker's termination, only to find themselves in court defending a defamation of character suit.
To find out if your termination pay practices are correct and compliant with federal and state employment tax regulations, join payroll expert Mark Schwartz on Thursday, January 12, for Termination Pay: When to Pay It, How to Pay It, and How to Tax It.
You'll learn answers to questions like: - How quickly must you deliver that final paycheck? State laws vary: 14 days? 7 days? 72 hours?
- What records should you retain for departing employees?
What are the rules on severance pay: Is it taxable for federal purposes? How about for state? If severance is paid, can the employee receive unemployment benefits?- Is there a difference between providing wage continuation versus lump sum severance?
- Can you deduct from an employee's final paycheck to recoup for lost company equipment? Can you deduct amounts owed to you by the employee?
Understanding answers to questions like these is essential to your HR and payroll compliance.
Mark will also answer your questions during our interactive Q&A session. And because this is a webinar, there is NO LIMIT to the number of attendees you can invite at one location. Register now.
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