Part 2: Checklist to Follow After Making a Decision to Terminate an Employee

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Once an employer has made the decision to terminate an employee, specific steps should be followed to ensure the transition goes as smoothly as possible, and the business is protected. This post discusses what an employer should keep in mind after making a decision to terminate an employee.

Step 1: Make sure the employee file has all documentation.

If an employee is being terminated for poor performance, make sure that the employee file includes all performance reviews, improvement plans that were put in place, and evidence of that employee’s failure to meet clearly communicated expectations. If termination is being based on a single serious event, such as a moral failure, document that event. If there has been an investigation, include a summary document in the personnel file. If it is a layoff, reasons for that can be documented. If this evidence does not exist, consider whether the termination may be premature.

Step 2: Determine benefits due to the employee.

Determine what benefits are due to the employee so you can add that monetary value to the employee’s last check, if necessary. It’s best business practice to prepare a letter for the employee noting the status of benefits and availability of benefits like ongoing COBRA. For example: does the employee have any accrued, but unused vacation or sick days? If so, the employee may be compensated for the monetary value of those days.

Step 3: Give notice of termination to the employee.

Once a decision to terminate an employee has been finalized, give notice of termination to the employee. Consider appropriate timing, such as at the end of the work day or work week. If a proper process was followed before termination, it should not come as a surprise to the employee that he or she is being terminated. And for a neutral termination, such as a layoff, the employee may know well in advance. To learn more about this process refer to Part 1, linked above, of this two-part series.

Step 4: Conduct a final interview.

At the last meeting with the ex-employee, whether this is the termination or an exit interview, it is helpful to have two people present, such as a manager and the HR Director, to witness the meeting and make sure it stays professional. The HR representative will want to give the final check for salary, vacation or reimbursements, and explain ongoing and transitioning benefits and other details. This also provides the employer with the chance to verify the current mailing address and determine how the employee will update the employer of any changes of address within the year.

If the employee will participate in one, exit interviews are a good chance to discuss the employee’s work experience with the company.

Step 5: Address all employee agreements with the employee.

Review previous employment agreements with the employee before he or she leaves. Did the person sign a non-compete? If so, how long is that agreement in place? Did the person sign a confidentiality agreement? Has he or she signed a non-disclosure agreement, non-solicitation agreement, or an intellectual property agreement? Discuss how each of these agreements, if signed by the employee, limit next steps for the terminated employee.

Step 6: Ask for company property to be returned.

Create a list of all company property issued to the employee and make sure all property is returned. That list may include phones, computers, badges, books, keys, customer lists, credit cards, tools, safety equipment, uniforms, price lists, company files, company financial information, company manuals, company cars, or even software programs. Be sure to document all returned company property.

Also, the employee will need clean out his or her office and take personal property home. Approaches range from giving the employee time (and perhaps help) to clean out the same day, to setting up an appointment after hours or on the weekend, to escorting the person off the premises immediately, with the office contents to be boxed up and shipped later. The method chosen should reflect the degree of risk the employee presents to the company. But treat the employee with as much dignity and courtesy as possible—it makes the transition easier for all.

Step 7: Discontinue employee access to building and property.

Collect all company keys from the employee. Alarm codes should be changed if all employees use the same code.

Step 8: Transition all IT accounts.

Next, employers will want to address all IT concerns. If there may be risk, notify IT even before the termination to make sure nothing can be permanently deleted by the employee. Set an end date for the employee’s access to the company network, usually the same day the employee is terminated. The employee’s work computer, work phone, or any other electronic work device should be wiped and reset. Passwords should be changed so the employee has no further access to employer software. Transition all clients of the departing employee to a different employee. Phone lines and email accounts are typically kept active and monitored for at least 60 days past termination date to make sure no client information is lost in the transition. After that period, shut down all employee accounts.

Conclusion

A termination checklist is valuable because it makes the termination process go more smoothly. It is also a good idea to consult with legal counsel if there are any potential problems with the termination, an employer is unsure about exactly what benefits are due to the employee, or to see if any particular federal or state laws apply to terminating this employee.