In general, most management advice tends to focus on things like hiring, managing, and motivating employees. There\u2019s good reason for that\u2014after all, the point of management is to move your business forward, and the way to do that is with a motivated, professional workforce.<\/p>\n
But sometimes, for different reasons, it just doesn\u2019t work out with an employee, and the time comes where it’s best to part ways. It\u2019s typically not a fun experience, but it\u2019s something that is occasionally necessary. And, as an employer, it\u2019s critical that you not only know when to let someone go, but what your business owner responsibilities are before, during, and after the termination.<\/p>\n
The first thing to understand, before terminating any employee, is that employee\u2019s status in regards to any Employment At Will policy or statutes in your state. \u201cEmployment At Will\u201d is a term that means that an employer or employee may terminate their employment at any time, for any reason.<\/p>\n
However, while almost every state allows at-will employment policies, there are differences between states in terms of the specific conditions (and exceptions) of their at will statutes. Many states and the Federal Government have likewise taken steps to curb the breadth of the at will concept, so it\u2019s critical to understand exactly where your state stands in the regard before moving forward.<\/p>\n
Further, employment contracts may be in place, which supersede any at-will employment guidelines. These contracts may also spell out additional business owner responsibilities, so make sure you fully understand the terms of any such agreement before commencing with the termination.<\/p>\n
Let\u2019s assume that no employment contract is in place, and your state has an at-will employment policy in place, which (for the vast majority of scenarios) is likely to be the case. During the termination, you as the business owner still have certain responsibilities in protecting your company.<\/p>\n
Even though your state likely allows Employment At Will, that doesn\u2019t mean that you\u2019re automatically without any liability whatsoever when terminating an employee. For instance, you\u2019re not permitted to terminate employees for any discriminatory reasons, such as race, religion, sex or age, among others. Also, some states have modified their at-will employment statutes to include concepts like good faith employment, which provides additional protection for employees from wrongful termination.<\/p>\n
Assuming you’ve completed the employee termination successfully, the law still mandates ongoing business owner responsibilities after the termination. Some of these responsibilities include:<\/p>\n
Even though most states don\u2019t require that severance payments be made to terminated employees, they are often paid in order to reduce wrongful termination lawsuits and other related actions. However, you should consult an attorney before agreeing to make any kind of severance package.<\/p>\n
Under federal law, business owner responsibilities for companies with 20 or more employees include providing COBRA healthcare benefits to employees that have been terminated. And even in companies with fewer than 20 employees, individual states may mandate coverage be provided anyway.<\/p>\n
If you have a group health plan for your employees, and you terminate an employee, you’re required under HIPAA to provide a Certificate of Creditable Coverage for the period in which the employee was covered under your plan. This certificate will aid the employee in obtaining future healthcare coverage.<\/p>\n
Many companies utilize independent contractors and consultants at various times, and there are a lot of benefits to utilizing them. In most cases, contractors are not subject to the same healthcare coverage and termination protections of regular employees. However, there are considerations to take into account when terminating contractors.<\/p>\n
Remember, as indicated by the name, contractors work under a contract. And, as we mentioned above, an employment contract typically supersedes Employment At Will statutes. As a result, it\u2019s very important to review the contractor\u2019s agreement prior to termination. Hopefully, there\u2019s a provision in the contract stating the agreement is subject to Employment At Will, but if there is anything different in the agreement, that language will likely take precedence.<\/p>\n
The key takeaway from all of this is to remember that there are business owner responsibilities prior to, during, and after terminating employees. And what\u2019s more, failure to meet some of these responsibilities can expose your company to significant liability and legal costs. Look into your insurance policy to see if your business \u00a0owner policy covers employment practices liability insurance.<\/p>\n
That\u2019s why it\u2019s critical to meet with an attorney who specializes in employment law well in advance to understand your rights and obligations under state and federal law, so that you can take steps to protect your company and assets. Remember, terminating employees can be hard, but it\u2019s made much harder if you don’t take steps to protect your business first.<\/p>\n","protected":false},"excerpt":{"rendered":"
In general, most management advice tends to focus on things like hiring, managing, and motivating employees. There\u2019s good reason for that\u2014after all, the point of management is to move your business forward, and the way to do that is with a motivated, professional workforce.<\/p>\n
But sometimes, for different reasons, it just doesn\u2019t work out with an employee, and the time comes where it’s best to part ways. It\u2019s typically not a fun experience, but it\u2019s something that is occasionally necessary. And, as an employer, it\u2019s critical that you not only know when to let someone go, but what your business owner responsibilities are before, during, and after the termination.<\/p>\n","protected":false},"author":5,"featured_media":2652,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"inline_featured_image":false,"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[76,117,69,107],"tags":[95,118,52,24],"class_list":["post-2648","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-insurance","category-business-owner-responsibilities","category-frequently-asked-question","category-insurance-policy","tag-business-insurance","tag-business-owner-responsibilities","tag-professional-liability","tag-small-business"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t