Offboarding Involuntary Terminations
Offboarding is the process of transitioning former employees out of the organization. Similar to employee onboarding, employee offboarding is a crucial time for employers. To offboard employees, organizations must complete a great deal of work in a short time frame, including finalizing payroll, completing tax paperwork and retrieving company property. Offboarding is triggered by an employee’s voluntary or involuntary departure. In particular, involuntary termination can be not only uncomfortable and emotional but also logistically complicated and full of legal risks. Often, these terminations take place after misconduct. However, these behaviors aren’t always predictable, which is why it’s important to have a plan in place.
An effective offboarding process can help ensure your organization complies with relevant laws and regulations and that necessary tasks are completed in an orderly manner. When done successfully, offboarding can protect your organization from potential liabilities and bring certain benefits, such as knowledge retention and relationship maintenance. Due to the complexities of terminating an employee, including several applicable federal, state and local laws, employers are encouraged to seek legal counsel to discuss and address specific issues and concerns.
This article discusses the reasons for involuntarily terminating an employee and outlines steps to take in the offboarding process.
Reasons for Termination
There are several reasons why an involuntary termination—a termination initiated by the employer, not the employee—may occur. Common reasons include:
Performance—Employers may release an employee if they are not meeting performance standards, including attendance expectations.
Layoffs—Employees may be let go because of financial difficulties or downsizing needs due to no fault of their own.
Malfeasance—Employees may be dismissed for engaging in misconduct, such as policy violations, insubordination, theft and workplace violence.
Forced retirement—Employers may require employees who stay beyond retirement age to leave their roles and retire.
When evaluating potential legal risks and obligations, employers should consider the reason for terminating an employee when assessing their offboarding obligations because they may differ in each instance.
Planning the Offboarding
The offboarding process for involuntary terminations generally begins when an organization decides to terminate an employee. Before offboarding can begin, employers should discuss the termination decisions with leadership and potentially legal counsel to ensure the termination is warranted and complies with federal and state laws. During and leading up to this time, employers should be sure to document any performance issues or disciplinary actions pertaining to the departing employee so they can be referenced later if needed.
Once it has been determined that an employee will be released, there are several steps organizations should take before notifying the employee. This includes:
Notifying relevant parties, such as HR or IT, that the employee is being terminated
Preparing final paperwork and paychecks
Deciding whether to offer the departing employee severance to reduce legal risks
Compiling a list of all devices and systems that the employee will need to return
Revoking the departing employee’s access to systems and facilities
Creating a transition plan for the departing employee
Scheduling a separation meeting with the employee
Terminating the Employee
Once everything has been prepared, employers should hold a separation meeting with the employee and notify them of the decision to terminate. Separation meetings are an important time for employers to ensure they provide the terminated employee with all required information and tie up any loose ends, such as requesting the individual’s current address, to limit potential issues later on. Some organizations may consider recording the events of this meeting if it’s legal to do so in their jurisdiction.
During this meeting, employers should consider taking the following actions:
Communicate clearly and straightforwardly.
Explain the reasons for the termination, if appropriate.
Provide the departing employee with information regarding any final payments, bonuses, state unemployment benefits, termination of group health benefits and severance, if applicable.
Remind the departing employee of any post-employment obligations, such as noncompetition and confidentiality agreements.
Discuss a severance package or request that the departing employee enters into an agreement with post-employment obligations, if applicable.
This is also a time to collect all company devices, equipment and passwords and let the employee know how their departure from the organization will proceed. If the departing employee uses their personal devices for work, all files and access should be removed. Once the meeting has concluded, it may be prudent to escort the employee from the premises in certain situations.
Finalizing the Termination Process
After the employee has been notified of the separation, employers should notify the departing employee’s team, the larger organization and company clients, if needed. It should be clear who will take over the employee’s responsibilities and obligations and who will be the new internal point of contact for external people or clients who communicated with the employee.
At this time, employers can revoke all access to systems, reset all software and deactivate the departing employee’s accounts and profiles. However, employers should retain and store any information needed to comply with organizational or legal requirements, such as HR-related information. Employers should finalize the process by updating the employee’s contact information and all organizational charts affected by the departure.
Takeaway
Establishing an involuntary offboarding process is necessary to help ensure employers don’t miss key steps. Conducting a successful offboarding process can help employers to create a well-ordered exit and help protect their organization from potential liability. Employers should carefully review their legal obligations throughout this process to ensure compliance with all applicable laws and internal policies.
This HR Insights is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. © 2023 Zywave, Inc. All rights reserved.