on February 26, 2016
Posted in Best Practices For California Employers
Terminations. It is not a subject you
cover in management class, or any class for that reason. But yet the
termination process is one of the more common business decisions that will
receive the most scrutiny, and are probably the most legally challenged
decisions in the workplace. In addition, terminations trigger immediate
legal obligations that the company must be ready to deal with on a moment’s
notice.
I’ve written another article about terminations recently, and
provided a webinar earlier this week on the subject (you can subscribe to
receive email updates and upcoming webinars here) because I believe the topic needs more
attention on the legal and management issues it raises. Just as companies
focus on making the hiring process as good as possible, the same attention
needs to be given to the termination process. Doing so will reduce
liability.
1) Do
not sugar coat the reasons for a termination.
Document performance as you see it. If the
termination was for cause – document that it is for cause – don’t take the easy
route out and say that the employee was laid off. It is important to
document any for cause termination (i.e. for poor performance, theft, etc.…).
to defend against potential litigation. A company does not want to be in
the position of stating that the reason for termination was a layoff, but then
if litigation is initiated attempting to explain that the true reason was for
the employee’s poor performance. This looks like the company is changing
its reason for the termination, and will affect the company’s credibility
regarding why the employee was terminated.
2)
Respect the employee during the termination process.
I do not have anything scientific here, but I’m
a true believer in good bedside manner. Most employees might not like the
termination, but probably will understand the decision if they have been given
proper performance reviews leading up to a termination.
3) If
offering severance, obtain a release of claims from the employee.
If a company is paying money in terms of a
severance payment that is not owed to the employee, the company should obtain a
release from the employee. A release can be a simple document, sometimes
a page or two, if there is not any anticipated litigation. While offering
an employee some severance pay may cost the company money in the short-term,
but doing so could save a lot of time and money in the long run. If done
properly, an employee’s acceptance of a severance agreement would effectively
waive any and all claims against the company.
4)
Documentation.
·
Keep payroll and time records for at least four years on a rolling basis
(statute of limitations for many wage claims can extend back four years).
·
Keep personnel files for at least three years after termination. Employers
are required to keep personnel files for three years under the law, but it may
be advisable to retain the files longer in order to be able to defend other
claims with longer statutes of limitations, such as wage claims than can extend
back four years.
·
Document paid sick leave – keep these records for at least one year, or
longer. As you may recall under California’s paid sick leave requirements
effective in 2015, if an employee leaves employment and is rehired by the
employer within one year, previously accrued and unused paid sick days must be
reinstated. The employee is entitled to the previously accrued and unused
paid sick days in addition to accruing paid sick days upon rehiring.
·
If litigation is expected, employers should ensure documents and files are
retained and kept safe until the litigation is resolved.
5)
Develop a checklist to follow for your company.
Checklists are used by pilots and doctors to
ensure that nothing is overlooked. I believe in checklists in order to
avoid missing simple items during a termination, and reducing liability.
Also, the process of thinking through the steps of a termination is helpful to
do when there is no pressure, and time can be taken to ensure that all aspects
are addressed. A checklist is also helpful for organizations to ensure
their managers are following all of the legal and organizational requirements
of a termination.
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