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Terminating Employees in California

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Presentation on theme: "Terminating Employees in California"— Presentation transcript:

1 Terminating Employees in California
Business & People Strategy Consulting Group Free Webinar Series

2 Agenda Common Mistakes Types of Termination
Making the Decision to Terminate Final Paychecks & Notices Penalties Best Practices

3 Your Presenter Dr. Carlyle Rogers
President & CEO of Business & People Strategy Consulting Group, LLC 25+ years’ HR and compliance experience Expertise in labor & employment laws Doctor of Jurisprudence (JD; Law) Doctor of Psychology (PsyD) Certified Interviewer & Interrogator

4 Common Mistakes Failure to properly investigate the facts upon which the termination is based. Not examining prior documentation. Mishandling the termination (i.e., apologizing, providing inaccurate or too much information). Mishandling internal and external communication of the employee’s departure (defamation). Employer doesn’t pay employee wages at time of termination. Employer withholds or deducts from the employee’s final paycheck. Employer miscalculates when to offer severance to reduce risk. Employer doesn’t seek assistance prior to terminating employees.

5 Types of Termination Involuntary (Employer Decision)
At-Will With/For Cause Without Cause Lay-Off Voluntary (Employee Decision) Resignation Retirement

6 At-Will and Termination
Either party can terminate the employment relationship at any time, with or without cause, and with or without notice. Exceptions Terminating contrary to public policy Employment contract Emphasizing the at-will relationship Offers of employment Employee handbook Separate policy Avoid using language that could void the at-will relationship. Verbiage and statements reflecting potential job security or permanence.

7 Lay-Offs Requires 60 days notice of layoff or plan closure to affected employees and other required state/local offices Federal WARN California WARN 100+ FT employees; 6/12 months 75 FT/PT employees; 6/12 months Plant closing 50/30 Plant closing, layoff or relo 50/30 Layoff %FT/30 (single site) Layoff 500+

8 Remote Employees In-person terminations not always available or practical. Can be terminated by video conference or phone. Be sure that payment of final wages is consistent with the state’s law where the employee works. It is a good practice to let the employee know who will be participating on the call/conference and to be cognizant of time zone differences.

9 Making the Decision

10 The Road to Termination for Cause
Employees are often subject to termination due to the following: Poor hiring decision by the company Lack of training, resources, & equipment to perform job Lack of understanding of expectations Inability to perform Poor decision making Don’t care

11 The Decision to Terminate
Good reasons to terminate employees: Violations of policies, procedures, and practices Poor performance Not a fit Company restructure Company reductions Objective reasons

12 What to Avoid Avoid terminating employees based upon: Emotions
Subjective information Their engagement in protected activities Protected classes Retaliation Limited information

13 Considerations Before Terminating
Is the employee pregnant? Have they recently returned from a leave of absence? Have they made complaints against a manager in the past 6 months? Have they complained of sexual harassment (or other harassment), discrimination, retaliation, workplace safety issues, etc. in the past 6 months? Have they been injured on the job? Is there a pattern of termination in the company or department based upon a protected class?

14 Considerations Before Terminating
Is there paperwork to support the events leading to termination? Does the termination make sense? Is it consistent with other employees who have engaged the same behaviors or issues? Is the reason tied to clearly defined policies, practices, procedures or expectations? Has the terminating manager (or employee’s manager) been subject to complaints of harassment, discrimination or other issues in the past 6 months by any employee?

15 Severance Agreements Not required by law
Good to use in high risk situations such as: Protected classes Recent engagement in protected activity Employment contracts If used should include General Release Provides additional compensation, benefits, etc. in exchange for agreeing not to sue the employer Employees 40 and older required terms consistent with ADEA and OWBPA Provides 21 to 45 days to consider the agreement

16 Documentation Not required by law (except for Notice of Change in Employment Relationship) Definitely a best practice Use for: Verbal & written warnings Demotions, probation & suspension Termination Should include only: Violations/Issues (tie them to written policies when possible) When it occurred, what the issue is, etc. Expected changes Timeline for changes What happens if not accomplished Objective information only (don’t get creative)

17 Documentation: PIP Performance Improvement Plans SMART Methodology
Assume that the employee doesn’t know how to correct/change If not accomplished, then confirms that they can’t, don’t want to, or don’t care

18 Documentation: Signing
Often employees will refuse to sign the document provided (whether a warning or PIP). Not signing the document doesn’t diminish its value or validity If the employee refuses to sign, simply note on the document: Date & time of the discussion Parties present That the employee was provided the document and refused to sign it

19 Final Paychecks & Notices

20 Final Paychecks: Timing
Terminations and Layoffs Must be paid on last day of work Resignations 72+ hours notice…final check due on last day Less than 72 hours notice…final check must be provided to employee within 72 hours (date of mailing is considered the date of payment) It is advisable to use a method which tracks and confirms receipt. Weekends and holidays are considered in the 72 hours deadline

21 Final Paychecks: Wages
Employers must include all of the following in the final paycheck: Pay for all work performed. All accrued, unused vacation, PTO, and personal/floating time that isn’t attached to a specific date or event. Commissions If earned and are able to be calculated on or before the date of termination, must be included in the final check. Not permissible to delay until next regularly scheduled date. If not earned and unable to calculate, then must be paid at the time it is.

22 Final Paychecks Notes If the termination is unforeseen and the check can’t be provided on the same day, the employer should consider paying an additional number of days of wages representing he date the paycheck will be ready for the employee. For employees requesting the final check to be direct deposited, CA Labor Code 213(d) provides that it is permissible if the employee has voluntarily provided written authorization for that specific deposit. Keep in mind that the rules related to timing of pay still apply.

23 Final Paychecks: Prohibitions
Employers may not withhold a final paycheck. It is illegal to withhold a final paycheck due to an employee owing money, not returning company property, and not turning expense reimbursement forms. Absent a written agreement at the time by the employee, employers may not deduct from the final paycheck for money owed, non-returned company property, etc. Thought: Have the employee sign a promissory note for repayment. If during employment, have them pay with a check or other method. If not able to get in place, you may need to seek out repayment in court.

24 Required Notices DE 2320: For Your Benefit: California Programs for the Unemployed Change of Status Notice The reason for termination does not have to be included in the document. Notice of COBRA Rights (20+) or Cal-COBRA (2-19) Health Insurance Premium Payment Program (HIPP) Notice (applies to employers with 20+ employees who provide health insurance)…DHCS 9061

25 Penalties

26 Penalties DLSE and DOL claims to collect wages due and penalties
EEOC and DFEH claims Civil lawsuit (individual and class) Wrongful termination Retaliation

27 Penalties Waiting time penalty…Employee’s daily rate of pay X each day not paid (up to 30 calendar days). Liquidated damages Emotional distress damages Lost wages Other statutory penalties Punitive damages Attorney’s fees …and potential audits from the DLSE and DOL

28 Best Practices

29 Best Practices Decisions should be impartial, objective and fair.
Best practice is to tie the decision to an established policy, practice, or standard. Terminations should be consistently applied. Documentation, although not necessarily a requirement, is preferred. Stick to the facts…avoid subjective remarks. Have a process of review. The terminating manager provides their basis and support for review. Can help identify retaliation and wrongful termination situations. Determine if severance agreement should be used.

30 Best Practices When possible, have a member of HR or another manager present as a witness. Be calm and professional…even if the employee get’s angry. Remember that this is often a life-changing event. Separate the employee from the action…in other words, think “the employee isn’t bad…they just made a bad decision”. Don’t argue. Don’t get drawn into challenges or demands. Treat them with respect and dignity.

31 QUESTIONS

32 Thanks for joining us today!
To download a copy of today’s presentation or to listen to it again, please visit our website at and check out our Free Webinars tab. If you need assistance with terminating an employee or have any other HR & compliance needs, please feel free to contact us at: Phone: Next Webinar: Overview of Managing Workplace Disabilities in CA May 13, 2015 at 10:00AM


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