By Jared Nusbaum
Terminating employees is an uncomfortable topic, even for seasoned employers. Myths abound about whether employers can terminate workers who enjoy protected status, such as disabled workers, or whether employers have to give two weeks’ notice of termination. Many employers don’t realize that under the law, they have very broad authority to fire employees.
This article reviews federal rules for when it’s permissible to fire employees, including part-time, seasonal and temporary employees. Please note that the state where you live will also have laws about employee termination.
Under the federal Fair Labor Standards Act (FLSA), which applies equally to full-time employees and to part-time/seasonal/temporary employees, you don’t have to give an employee notice prior to termination or layoff. Although outgoing employees will probably appreciate as much forewarning as possible, you can lawfully terminate them on the spot.
Under the WARN (Worker Adjustment and Retraining Notification) Act, you may need to provide a 60-day layoff notice for certain mass layoffs. The U.S. Department of Labor (DOL) provides an overview at www.doleta.gov/programs/factsht/warn.htm
Severance and final paycheck
Severance pay is not required under the FLSA. If an employment contract provides for severance pay, the FLSA does not say when that severance needs to be paid. Normally the contract itself will contain a payment deadline.
Similarly, there is no federal requirement on when an employee’s final paycheck needs to be paid. However, pay special attention to state law, since states may require a turnaround as short as 24 hours. The DOL’s Wage and Hour Division recommends that employees seek state or federal assistance if they don’t receive a final paycheck within the applicable pay period.
Employers may not terminate employees for an unlawful discriminatory reason. The most common types of unlawful discrimination are those based on race, color, religion, sex, national origin, pregnancy, genetic information, armed or uniformed services, veteran status, age, or disability, or in retaliation for conduct such as reporting workplace violations of labor laws or participating in an agency investigation of a workplace.
Other federal or state laws may create protections for additional characteristics or activities. Depending on your location, federal courts may interpret certain terms more broadly (for example, sex-based discrimination may include sexual harassment and/or discrimination based on sexual orientation). State courts may also interpret these terms broadly.
Note that you can terminate employees who have these characteristics. You can certainly terminate employees who abuse the protections that the law provides them (e.g., those who falsify their need for disability or maternity leave). You simply cannot terminate employees because of their protected characteristics. For disabled employees, you are required to try to reasonably accommodate their disability before taking adverse action.
We strongly recommend that you consult with an attorney in your state before terminating an employee with protected characteristics. In many instances, if an employer has exhibited previous behavior that could be interpreted as discriminatory, the exemployee may be able to convince a court that their termination was at least partially motivated by discrimination. Partial motivation is often enough to make the employer’s decision unlawful.
Explaining the termination
Federal law doesn’t require you to tell an employee why they’re being fired. However, it’s wise to do so. State laws may require you to provide a truthful reason, for example, if an ex-employee submits a written request for explanation. Having an objective explanation for the termination minimizes ill will that might cause an employee to disparage your company. It also minimizes an employee’s ability to bring a legal claim for unlawful discharge.
Jared Nusbaum is an attorney with Zlimen & McGuiness, PLLC. His practice is focused on small business contracts, employment law, litigation, bankruptcy and appeals. Contact him at firstname.lastname@example.org. Law Clerk Alex Zabinski also contributed to this article.