How to Let An Employee Go

Is termination the best option?

Are you in a position where you have to choose whether it is more cost effective to retain an employee or let them go, but you are nervous about a lawsuit? Hiring employees is expensive, but law suits can cost much more. It’s best for employers to make every effort to retain employees, though sometimes termination is unavoidable. Before you fire an employee it is important to protect yourself and your business from a lawsuit. Following the suggestions below will ensure that you take the necessary steps to protect yourself and the company when terminating an employee.

Documentation is Your Best Friend

Documentation lets employees know where they stand. When you discipline an employee without recording the specifics of the event, chances are, the employee will not take the matter seriously. However, when you put the case in writing, it sends a clear message that the issue is not trivial and that you expect the employee to change his or her behavior accordingly. Even the fact that a verbal warning was issued should be put in writing.

Documentation makes it easier to track employee performance and behavior. Managers and supervisors come and go. Furthermore, employees don’t always stay in the same role. Therefore, an employee may have more than one manager/supervisor during the course of his or her employment with the same company. Proper documentation makes it easier for present and future managers/supervisors to track employee performance, examine corrective measures taken thus far, and impose additional disciplinary actions if necessary.

Note that it’s easier to administer progressive discipline when there’s a written trail of prior disciplinary actions. If you have not been documenting past conduct or disciplinary measures taken, it will be hard to establish that the behavior has gotten worse over time and therefore calls for stricter levels of discipline.

Documentation can protect you (and the organization) in court. If an employee files a lawsuit claiming that he or she was terminated in a discriminatory manner or suffered retaliation because he or she filed the lawsuit, accurate and consistent records can save the day. For example, documentation can establish that the employee breached company rules and was treated no differently from other employees in similar situations.

The following is a non-exhaustive list of employee behaviors that may be subject to progressive discipline:

  • Unable to meet deadlines
  • Poor quality work
  • Too many absences
  • Excessive tardiness
  • Insubordination
  • Willful abuse of company property
  • Substance abuse
  • Harassment
  • Violence
  • Sleeping on the job

Progressive discipline typically involves the following steps:

Verbal Warning(s) > Written Warning(s) > Performance Improvement Plan > Termination

Depending on the severity of the issue, immediate termination may be warranted.

Records Retention and Access

Employee discipline is a private matter between the employer and employee. Consequently, progressive discipline records must be kept in a secure, confidential location at the worksite. Such documents should be retained in the employee’s personnel file, as well as in the manager’s/supervisor’s desk file. Also, the employee should receive a copy of each disciplinary action. Hard copies should be kept in locked storage.

Per the Society for Human Resource Management (SHRM), employers can “maintain their records in any format they wish.” However, when it comes to progressive discipline, the best way to cover your bases—and ensure easy access to the right documents when you need them—is to retain both hard copy and electronic records.

Employers often use a Human Resource Management System (HRMS) for storing documents electronically. The system simplifies documentation of employee discipline, tracks performance issues, and automatically stores the information for an indefinite period of time.

With lawsuits being an ever-looming possibility, employers should follow federal and state record retention requirements, which dictate what type of employee records should be kept and for how long.

According to SHRM, employers should keep electronic and paper-based personnel records for seven years after termination. This practice will come in handy if a terminated employee sues you for discrimination further down the road. Or, you might need the records later to prove consistency in your progressive discipline process.

Moving Forward

Once you’ve exhausted corrective/disciplinary measures, you may be left with only one option. You’re ready to terminate, now what?  If you’re not sure you have enough documentation or have questions regarding the termination, it is always good to run it by a human resources professional or an attorney.  This is especially true if you feel the employee may consider filing a minority claim based on their age, race, sex, national origin, sexual preference, etc.  You may also want to consider a severance agreement with an agreement to not sue the company.

When meeting with the employee you will want to keep the conversation as brief as possible to avoid getting into a disagreement over the details of the separation. This is an emotional situation in most cases and you want to keep the meeting professional. It is best to come to the meeting with the employee’s last paycheck ready taking things such as deductions (benefits, tools, etc.), paid time off or vacation pay (unless your handbook policy says they do not get it for termination), etc. into consideration before processing their final pay. Be sure to withhold any severance pay you may have offered until you get a signed severance agreement returned to you.

Tools & Training

Having a separation checklist prepared ahead of time will ensure you don’t miss an important step when terminating an employee. If you do not have a termination checklist, we’ve created one for you that can be downloaded below!


If you’re interested in further information, or if you’re interested in additional training for managers on progressive discipline and termination, contact us by clicking below.


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January 25, 2018




< 50 employees Article Culture HR Professional