Involuntary Termination Practices for Small Businesses

By Spartina Staff     Add your comments

If your small business doesn’t have an HR department, it falls to you to take care of details for terminating an employee.

When faced with the need to lay-off employees, it is essential to do it right. This includes following your state laws, being compassionate, and giving enough information to the employee so that they can take the next steps.

Here are some useful points.

1. Be sure to formally, in writing/email document the termination. Language such as the following is helpful: “This email is a follow-up to our conversation of ______Date____. With regret, as we explained, we have terminated your employment with ______ effective xxx. This is to formally acknowledge that your employment as (title) with (company name) will be terminated effective (date), due to (include a reason).

2. Explain what they can expect in their final paycheck. For example, it may include payment for any accrued and unused paid time.

3. Provide information about the state unemployment program. 4. Let the employee know how to proceed with health coverage. For example, if they were enrolled in a company-sponsored group health plan, normally their health benefits coverage remain in effect through the end of the month in which they are terminated. Also let them know about the option to continue benefits under COBRA. If they were participating in a Flexible Spending Account participant, let them know how long after termination they can request reimbursements.

5. Be sure to get an accurate home mailing address for sending W-2 and COBRA notices correctly.

6. Insure that prior to the last day at work, they return any company property, including • Keys • Credit card/calling card • Manuals • Portable phone/ pager • Equipment at home • Computer • Company proprietary information

7. Remind them to turn in a final expense account if there is anything outstanding.

8. Be sure that there are no pending work-related injury or illness claims.

9. Most of all, don’t forget to acknowledge their work and express appreciation for their service to the company.

Also see our other article, Terminating an Employee

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