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5 Tips to Improve Your Termination Process

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With the exception of well-planned and executed exits and retirements, most employee terminations can be incredibly uncomfortable, awkward, and stressful for all parties involved. Managers rarely enjoy delivering the bad news to their employees, especially when the termination is a result of a company’s mass layoff or downsizing effort. The conversation can be just as uncomfortable if the employee has made the decision to move on, especially if the news is sudden and unexpected.

In most cases, organizations need to think about finding someone to fill the vacancy that will be created. For positions that are difficult to fill, this could mean that the other employees have to pick up the slack for extended periods. This can lead to burnout, which might, in turn, lead to more employee turnover.

On top of this, there are also some special payroll considerations to address when employee separations occur. Your business has to adhere to rules and regulations for the timing of final payments, as well as rules and restrictions on what items should be paid and what deductions may or may not be allowed to be taken. In some cases, there may be stipulations outlined in specific employment agreements for clawbacks or repayment of bonuses or special awards. Different states also have different rules; final payments might need to be issued on and may require certain payouts of unused paid time off and other benefits.

With so many items to consider, a termination checklist can be a useful tool to make sure nothing is missed and make the process of employee termination a little less uncomfortable. Here are some helpful tips:

  1. Double-check with your HR and/or legal department for any special agreements that may be in place, such as bonuses or special awards that are contingent on the employee remaining employed. If a clawback or payroll deduction is required, you’ll want to process this along with the employee’s final pay.
  2. Notify system administrator(s) and/or security of the employee’s last day of work, so system access can be disabled accordingly. If special clearance or credentials are required for physical access to company facilities, those can be deactivated as well.
  3. Arrange for the collection of any company property from the employee, and vice-versa. Keys, company cards, laptops, and other company property issued to the employee should be collected. It may also be a good idea to allow the employee some time to clear their work area of any personal property.
  4. Communicate with your team. Let your team know about the termination. Depending on the situation, the timing of the notification may vary, but proper communication will allow others on your team to route calls and requests accordingly.
  5. Prepare materials for the termination meeting. Every organization and situation is different so not all of the following may be applicable, but some items you may want to prepare are: COBRA notices, documented performance issues, severance package details, the separation agreement, and any non-compete or non-disclosure agreements.

Employee departures are rarely easy and can be emotional and challenging to deal with. A checklist and standardized process can keep things on track, help to manage the logistical details, and help make the transition go as smoothly as possible.



Christina Hageny

Christina Hageny

President - Valor Payroll Solutions

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