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BFS Capital Blog

Small Business Tips: Do’s and Don’ts for Firing Employees

May 6, 2015

If every small business were a reality TV show hosted by a guy in a bad toupee, then firing employees would be a lot easier.

But luckily for Donald Trump, and unluckily for you, simply saying “you’re fired” isn’t going to cut it when dismissing employees from your business. Despite at-will employment laws, the litigious nature of the United States – and common decency – still demand that you follow certain protocols when you fire someone.

So how do you get rid of an employee who’d hindering your business without setting yourself up for a lawsuit? Here’s a handy small business guide with do’s and don’ts for firing employees.

DO take your time to figure out if firing an employee is warranted. It usually is. But run your thoughts past another manager or a partner before bringing down the hammer.
DON’T fire an employee on the spur of the moment. Don’t overreact, even for a zero-tolerance offense. Sure, you might be tempted to just say “That’s it, you’re fired!” when an employee needs to go, but even a zero-tolerance offense needs investigation. Take time to breathe, and see if this really is the right decision.

DO make a plan for all work in progress. Once the employee you fired is gone, there will invariably be team work, clients and projects that need to be dealt with. As you piece together your firing strategy, make sure there are no gaps in productivity and that you keep your employees motivated.
DON’T make that plan with other employees. When it comes to firings, employees are about as good at keeping secrets as a high school cheerleading squad. So unless you want your soon-to-be-fired employee to steal every secret you have, don’t let anyone in on it.

DO collect all necessary documentation for your termination meeting. These include employee handbook, and documentation of wrongdoing, counseling sheets, video evidence, etc.
DON’T show up alone to fire an employee. Your paperwork can’t tell a judge what was said during your firing meeting. So bring along someone from your business’ HR department or, lacking that, another employee to witness.

DO ensure you conduct any termination face-to-face. Getting fired over email is kind of like getting dumped via text message. And do you really want your former employee going all Taylor Swift and writing songs about what a terrible boss you were?
DON’T do it in front of the entire company. As bad as it makes the employee that is being fired publicly look, screaming at them that they’ve got ten minutes to get off the premises in front of your entire staff actually makes you look even worse.

DO conduct the meeting in a quiet, private place. The employee’s office is always a good option. Or you can use your office, or a closet with good lighting. Just be sure it is somewhere comfortable.
DON’T let the employee go back to his desk immediately. If you don’t fire someone at their desk, letting them go straight back doesn’t give the person time to collect him or herself. Set a time when the office is empty to the employee to go back and collect personal effects.

DO say the employee is being fired “for cause.” Nearly every state allows employees to be fired “at will.” But you absolutely must say that they’re being fired “for cause” in the meeting or you open yourself up to a lawsuit.
DON’T violate any laws. What opens you up to a lawsuit? Firing someone in a protected class, as defined by the Civil Rights Act of 1964, could lead to legal action. Also, firing someone for going on maternity leave, military duty, or for whistle blowing, among other things, could also lead to a lawsuit. Familiarize yourself with the laws and make sure you’re not leaving the door open for a discrimination suit. That doesn’t mean you can’t fire people in protected classes, it just means you’d better have your ducks in a row when you do.

DO make the firing short and succinct. Walking in and saying “you’re terminated” is only ok if you happen to be a cyborg from the year 2025. But don’t hem and haw around the bad news either. Open the meeting by saying the person is being let go, explain why, and make sure they understand that the decision is final.
DON’T get into an argument. If the employee requires explanation, fine. But don’t debate the issues as that only opens you up to more lawsuits.

DO state the reasons for firing. You don’t need to go into too much detail, but simply state “You’re being fired for coming to work smelling like onions,” and move on with it.
DON’T make the reasons up to avoid looking bad. If it’s a cost-cutting measure, tell the employee that. But if it’s just a case of them not being a fit, disguising a firing as a layoff is just plain unethical

DO offer to answer any questions or give logistical assistance. Switching the focus from “you’re fired” to “here’s how to extend your health insurance” actually makes the process easier. So let the employee know you’re happy to help with information about benefits, severance if applicable, or other logistical concerns.
DON’T offer to help them find a new job. Unless this is a layoff and part of the severance is job placement assistance, don’t offer help that you don’t intend to give.

DO make arrangements for final paychecks and return of company property. Bringing the paycheck with you isn’t a bad idea. And if the employee has stuff like laptops at home, give them a drop-dead date for its return. And offer to pay the shipping costs.
DON’T do it after your state law stipulates. You must deliver a final paycheck within a legally stipulated amount of time. Find out when your state’s limit is and follow it.

It’s never easy to let someone go, but it is part of being a business owner. Following these guidelines when firing employees will lead to a smoother process for your small business and everyone involved.