Termination? Do You Have the Correct Policies?

The most lawsuits occur when employers terminate an employee.  Your termination policy is critical!

Types of Termination:

  • Voluntary: Written resignations, job abandonment, extended absences without proper notification, retirement, refusal of a transfer after job elimination, failure to report for light duty, failure to report status during a leave of absence, and failure to return after leave of absence.

  • Involuntary: Permanent layoffs, discharge for cause, disability or death. 


  • Severance Pay: What are your guidelines (how many years of service to obtain certain levels of severance)? Are there any situations where severance will not be granted?

  • Unemployment Compensation: Do you have required procedures or paperwork?

  • Sick Leave/Vacation/PTO: Does a terminating employee receive pay in lieu of unused time?

  • Health/Life Insurance:  When does insurance terminate? What opportunities exist to continue coverage? How about COBRA coverage?

  • Compensation: What rules govern final paychecks? What will be the status of bonus payments and commissions? Stock options, etc.?

  • Repayment of Debt: What provisions will cover repayment of loans or advances or other outstanding debts?

  • Perks: What policies govern the return or purchase of company cars? What will happen with club or gym memberships?

  • Dismissal Procedures and Responsibilities: Who makes the final decisions about terminations? Who must approve? Who must be notified, when and how?

  • Company Property: Whose responsibility will it be to ensure that the employee returns all company property, drawings, reference data, tools, uniforms, ID cards, credit cards, keys, etc? Computers, cell phones, and other electronic equipment?

  • Reference Letters: What will the policy be with respect to letters of reference?

  • Exit/Termination Interview: Will you require exit interviews? Who will conduct them?