Terminating Employees

It is hard enough to start and run a business, but one of the least pleasant things to do as a boss is having to terminate an employee. It hurts to fire somebody at a personal level but then it can also expose you to lawsuits and claims. It is important to always protect yourself and your business and you can do that as follows:

Verbal and Written Warnings

Employers sometimes do not understand the importance of having proper documentation of warnings given to their employees before termination. California is an at-will state and there are no federal laws requiring number of warnings but, having documented proof of warning given to an employee before termination can help protect you from claims of wrongful termination, discrimination, retaliation and any other claim.

Warning in writing is better than oral as these can be provided as documented proof in court if a lawsuit does happen.

Paycheck

California requires employers to make the final payment to the employee when they are being terminated. It is good practice to have everything ready before you meet with your employee. If you delay the payment, you will be penalized. 

Severance Pay

Under the California law, employers are not legally required to provide severance pay on terminating an employee. The employee should read their employer’s policy. California is an at-will state and wages are not required to be paid beyond the hours an employee has worked. 

COBRA Notice

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a health insurance program that allows an eligible employee and his or her dependents to receive continued health insurance coverage in the case that employee loses their job. The employee should be provided with a written notice within 30 days of their termination explaining their rights under COBRA.

Reason for Termination

The employee should be provided with a letter explaining the true cause for termination. If you provide the employee with a vague reason and there is a lawsuit, it may appear that the employee was discriminated with and that there was an illegal motive to fire the employee.

As an employer you are responsible for unemployment benefits and the costs are high. The unemployment insurance benefits are supported by employers by paying into the state and federal taxes. The tax rate is based on the number of unemployment claims in the state. Employees who are fired and those who quit voluntarily are not eligible for unemployment insurance.

But, employees that are laid off without any reason are eligible. An unemployment claim may raise your tax rates, but this should not prevent you from firing an employee that is not performing well at work. To prevent any errors when firing an employee, it is always wise to hire someone to make sure that the claim process is done the right way.