This Is When to Fire an Employee

When to fire an employee is one of the hardest calls a business owner makes, and if you are not careful, a year or more can go by with someone who should no longer be working for you. It is easy to become complacent and overwhelmed by the thought of finding someone new and training them. Maybe you do not fully grasp what they do, so cutting ties feels risky.

This article is meant to help you with that decision. It covers the reasons you can and cannot fire an employee, the flags that tell you it is time, how to prepare, and how to handle the day itself. It also includes a free termination readiness checklist.

These are general guidelines, not legal advice. Laws vary by state and situation, so consult an employment lawyer for guidance specific to your business.

Are There Laws That Prevent You From Firing an Employee?

Yes. Most U.S. employment is at-will, which means you can generally end employment for any lawful reason. The key word is lawful. Federal law prohibits firing someone because of who they are or because they exercised certain rights, and employees who believe they were fired unfairly can file a charge with the Equal Employment Opportunity Commission (EEOC).

To stay compliant, make sure you have a cause for the termination that is unrelated to any of the reasons below, and that you can show it.

Reasons You Cannot Legally Fire an Employee Under Federal Law

This list covers the main federal protections and is not all-inclusive. Many states and cities add more, such as protection for political activity or for filing a workers’ compensation claim, so check the rules where your employees work.

The employee counts come from the EEOC’s coverage rules, which count employees who worked for you for at least 20 calendar weeks in the current or previous year.

Reasons You Can Fire an Employee

Assuming the reason is applied consistently and is not a cover for one of the protected reasons above, these are common, legitimate grounds for termination.

9 Signs It Is Time to Fire an Employee

These are the flags to watch for, with examples of each.

1. You Have Given Time to Correct a Problem, and It Is Not Changing

Say you gave the employee 90 days to turn around a problem with lateness, and they are still showing up late. That is cause to terminate.

A 90-day plan works for a variety of issues because it sets a clear window, longer than the roughly two months it often takes to form a new habit. Our performance improvement plan template helps you set one up.

2. The Employee Is Dragging Down Morale

The employee may be creating anxiety for the people who have to deal with them, causing stress and lowering productivity in every area they touch. By accepting this behavior, you are telling your other employees it is okay to act this way and cause distress to others.

3. The Employee Is Not Contributing Their Share

If other employees cannot finish their projects because this person keeps holding things up, overall productivity suffers. If you have given time, discussed it, and it is still not changing, it is time.

4. They Are Violating Company Policies

This can tie back to any of the reasons you can fire someone. Say they bring a weapon to work or use drugs during the workday, and you have weapons and drug policies. It is time.

You may find employees dating in violation of policy, especially a senior leader and a direct report. They should not be surprised to be let go, because these policies are in the employee handbook they signed.

5. The Employee Loves Drama

If one person always stands out as the center of problems and drama, it is time. They take away from other people’s ability to get their jobs done, may be causing stress, and cost the company management time. If there is one common denominator, it is time.

6. It Is a Poor Culture Fit

You may have an employee who brings negativity, or who distracts the team because they have no passion for the job. They may post things on social media that harm the company’s image.

Try to turn it around first, including training on what is appropriate to share on social media. If that does not work, it is time.

7. You Find Out Their Job Application Was Not Accurate

This falls under lying, but it may not be an obvious lie. It can take time to discover that someone does not have the qualifications they claimed, which makes quality work in the role impossible.

To prevent it, run basic background checks to confirm education and reference checks to verify previous job titles. Even then, some still get through.

8. The Role Has Changed and They Have Not

As the company grows, employees need to grow with it. If you have offered continuing education and training and the employee is not taking it, by choice or by ability, that is a reason to let them go. They can then find a role that suits their skills.

9. You Know You Would Not Hire Them Again

This is a clear flag that it is time to cut ties. If, given the choice to hire this person again, your answer is a hard no, you need someone else in that role. It is not working out.

How to Prepare to Fire an Employee

Document Every Detail and Communicate It

First and foremost, document every single detail and share it with the employee. This protects you if the employee files a complaint with the EEOC, because you have a record of a series of issues, and it means the termination is not a surprise.

Include the date and time of each event, the issue in detail, the action taken, and the result. Follow up after each conversation by email or in writing so the employee acknowledges they were talked to, warned, or whatever your process calls for.

Allow About 90 Days Before Firing

Make sure you have documented notes on each incident, the employee was spoken with about each one, and there is proof they acknowledged the discussion. This approach is best for attendance, poor performance, and other issues that can be given time to improve.

The exception is serious misconduct, such as stealing, leaking trade secrets, or bringing drugs or weapons on site. Those can justify immediate termination. For how many warnings to give, see how many write-ups before termination.

Plan for the Month Before Firing

Once you know a termination is coming, take an inventory of what this person does each day if you do not already have one. Note the tools they use and how much contact they have with customers and vendors, so you can shut that off immediately at termination.

These are things you should already have, but make sure. You may want to post a confidential job opening if the role is critical, so the gap is shorter. Some employers make the hire first, have the departing employee train the new person, and then let the employee go.

How to Fire an Employee on the Day

Do not send a meeting invite. Instead, call them to your office at the last minute, near the end of the day, and include HR if you have it. I prefer a Friday over a Monday so office drama has a couple of days to calm down.

The employee should know a termination is possible because you have had multiple talks, warnings, and discussions, but not on the day itself. Advance notice of the meeting can cause problems and disruption with other employees.

Tell them they are being let go, and be very clear about it. Wish them luck, collect company equipment like phones and laptops, and provide any paperwork. Some companies mail personal belongings, or have someone like an HR rep gather them, so there is no further opportunity for conversations with other employees.

There is no negotiating, and no further discussion. Keep it short; experts suggest the meeting take no more than 10 minutes.

If you can stay calm and collected, speak with the rest of the team sooner rather than later. If you cannot, HR or another appropriate person can help. A firing will likely bring relief to the team, but if the reason was not public, such as theft, other employees may worry that more people are being let go.

Free Termination Readiness Checklist

Use the checklist below before you make the final call. Check each item you can honestly say is true. Two items are required: the reason must be job-related, and it must have nothing to do with a protected characteristic or protected activity. If either is unchecked, the checklist tells you to stop.

Log each documented incident with its date, the issue, the action you took, and the result. The checklist counts the incidents and how many days your documented history covers, and it warns you if that history is short for a performance or attendance issue. Mark serious misconduct to skip the improvement-period item.

In the example, three incidents over 73 days and nine of 12 items in place put readiness at 75%. The missing items are the employee’s written acknowledgment, the duty inventory, and the plan for final pay and access, all fixable before the meeting.

Copy it to Excel, where readiness, status, and days of history stay live formulas, or print it for your HR file.

Letting an Employee Go When It Is No Longer Working

No one wants to be in the position of firing someone. Sometimes, though, you have tried everything, and the person is not a good fit. You do yourself, the employee, and the team a disservice by continuing the employment when you see the flags above.

Remember that your whole company is watching what you choose to accept, and that sets the tone for what is acceptable. One bad hire can damage an entire company.

Keeping documentation in one place makes every one of these steps easier. Updoot is business management software for $5 per user per month with an HR vault, performance reviews, and SOP sign-offs, so warnings, acknowledgments, and policies are on file when you need them.

These are general guidelines, not legal advice. Consult an employment lawyer for guidance specific to your state and situation.

Written by Nicole Hullihen

Sources

Prohibited Employment Policies and Practices (U.S. EEOC)

Coverage of Business and Private Employers (U.S. EEOC)

Immigrant and Employee Rights Section (U.S. Department of Justice)

Employee Polygraph Protection Act (U.S. Department of Labor)

Concerted Activity (National Labor Relations Board)

Family and Medical Leave Act (U.S. Department of Labor)

When and How to Fire an Employee (Trakstar Hire)