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An Employers Guide to Layoffs and Terminations

written by: N Nayab•edited by: Jean Scheid•updated: 9/16/2011

All employers will at one time or another need to either layoff or terminate some employees. If you're lost on how to go through this process with ease, this one-stop guide to both will assist you in decision-making. We invite you to bookmark this web page so you can visit it often for assistance.

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    Termination is firing the employee on a permanent basis, and a layoff is either a temporary suspension or permanent termination of an employee from work. These terms find use interchangeably. The reasons for terminations or layoffs may be many, including but not limited to employee performance or attitude issues, poor company performance, strategic restructuring of the company, etc.

    Regardless of the reason, terminating or laying off employees are delicate processes. Not only is each step in the termination or layoff process fraught with legal implications, the process has deep emotional ramifications on the motivation and morale of employees that remain, and puts corporate reputation at stake. Before terminating employees, employers need to build up a proper case and document the same, ensure the termination or layoff complies with all statutory provisions and rules, avoid possible discrimination charges, and make sure that the process takes place correctly.

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    How to Terminate an Employee the Legal Way

    A Guide to Employee Terminations and Layoffs Terminating an employee is a big challenge for the employer. Not following the proper procedures could mean the court setting aside the termination, should the employee challenge the matter in court. Follow a systematic approach by setting the rules, document everything, adhere to the recommended procedure, and benchmark best practices.

    Employee Termination Checklist: What Should Be Included?

    Employee attrition is unavoidable in any company. Some employees are fired for cause, some others quit, and still others move on to another job. An employee termination checklist maintains documentation of the reasons for firing the employee, and serves as a record of previous employees. Take a look at what to include in such a checklist. You'll also find a free employee termination checklist form you can download and modify to fit your specific needs.

    Defining Employment-at-Will: Avoiding Wrongful Termination Lawsuits

    The employment "at-will" policy states the employee or the employer may terminate an employment relationship at any time, for any reason, or for no reason at all. Employers, however, need to understand the finer details on this clause, how to enforce this clause, and other relevant information. Failure to do so may result in charges of unlawful dismissal.

    Employment-At-Will States: How Does Each Differ?

    Most employment is at-will, but it does not give employers the right to hire and fire arbitrarily. The three major exceptions to the employment at will concept are the 1964 Civil Rights Act, employment contracts, and principles of fair play. Also important is how the at-will doctrine plays out in different states. Learn what's legal in your state here.

    Pros and Cons of the Employment-At-Will Doctrine

    A Guide to Employee Terminations and Layoffs The employment at will concept has both advantages and disadvantages for both the employer and the employee. Employers looking to take advantage of this doctrine should have a good knowledge of the advantages and disadvantages. They should also understand how it will protect the company.

    Valid Reasons for Firing an Employee

    Most states allow "at-will" employment, but a company still needs valid reasons to fire an employee to avoid legal complications. This post explains how the company may develop a proper case for termination that will stand up in court, the legal considerations to follow when terminating, how to terminate without being sued for discrimination, and related information.

    The Right Way to Layoff Employees

    Layoffs are usually a messy and emotional affairs. The process becomes as important as the decision. Adopting industry tested tips and best practices to conduct the exercise in a professional manner helps. Some elements employers should consider is honest communication and even help for anger management, emotional and financial issues.

    Common Examples of Wrongful Termination: What to Watch Out For

    Terminating employees for reasons such as discrimination, retaliation for whistle blowing, exercising union rights, or on breach of good faith all count as wrongful dismissal. The courts, the Equal Employment Opportunity Commission (EEOC), or other statutory bodies may strike down such dismissals. What could possible construct such wrongful terminations? Learn more here.

    Famous Cases of Wrongful Termination

    A Guide to Employee Terminations and Layoffs There are many instances when employers have terminated employees but the courts have struck down such terminations and offered the company to reinstate the employee or pay compensation. Such cases usually pertain to whistle blowing, and implied contracts. A few of such cases have become famous as landmark judgments.

    What Happens to Whistleblowers?

    Whistle blowing is an individual employee reporting a fraud or deception committed by the employer. Very often the people at the receiving end consider it as an act of treachery and fire the employee from the job. More than fifty-five US laws incorporate an “anti-retaliation" clause that protects such whistleblowers, but still people lose their jobs for whistle blowing. This article explains the reasons why employees lose their jobs owing to this reason and explore actual cases of wrongful termination filed by whistleblowers against their employers.

    What the Union Can Do if an Employee is Fired

    From the perspective of an employee who is terminated from a job, unions cannot always protect the job. Unions can nevertheless, ensure the employer complies with legal requirements such as the WARN Act, pay the stipulated termination benefits and allow employees their rights such as COBRA. Unions may also assist the employee to fight the case in court if they suspect unlawful or discriminatory termination.

    Employee's Layoff Rights

    Employees laid off are within their rights to claim any promised severance pay, settlement of outstanding salary, and COBRA benefits. Employers also need to provide advance notice for mass layoffs. How can employers ensure that employees are treated fairly and legally during this process? We answer this question here.

    Payroll Deductions from Severance Pay: What the Law Allows

    Severance pay is what an employee receives when they leave employment of a company for any reason, including terminations and layoffs. The law lends clarity on severance pay, whether employees are obliged to pay any severance pay at all, tax implications, allowable deductions and more. Follow such dos and don'ts to avoid legal complications.

    Issuing a Final Warning Notice to Employees

    The principle of fairness dictates employers to inform employees of their wrong doings and provide them with an opportunity to mend ways. An employee final warning notice serves this purpose as a formal letter on the culmination of disciplinary proceedings, as a legal record of the misconduct and any previous warnings. Employers need to know how and when to serve this letter, and explain what should go inside the letter. Download a 100 percent free sample warning notice here.

    Sample Layoff Letter: What to Include

    Laying off employees is a delicate issue and a wrong step can be costly in more ways than one. The letter informing the employees of the layoff decision is an important legal document and requires preparation with much care. Take a look at a checklist of what needs inclusion in such a letter. We also provide a sample layoff letter you can download for free in this post.