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How to Fire an Employee: Tips for Letting Go

Updated Oct 24, 2023

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Letting go of a problem employee is easier said than done. Before you fire someone, make sure you have everything in order and are going about the process in the right way. Firing someone too hastily or without taking the proper steps could lead to an uncomfortable situation or legal issues that could damage your business. By following the advice in this guide, you can make sure you’re within legal and ethical bounds when letting an employee go.

11 reasons to fire an employee

The following are reasons to terminate employment for a worker. If you can document the following, you are likely on sturdy ground when it comes to firing an employee. You should always consult with human resources (HR) professionals and legal counsel before doing so, however.

1. Sexual harassment, bullying, violence or disregard for safety

Employees who sexually harass or otherwise discriminate against a fellow employee typically are subject to an immediate firing. So are employees who disobey workplace safety policies or bully their colleagues. It’s also acceptable to fire employees who are violent or threaten violence toward other employees immediately.

FYIDid you know

If you have a team member who discriminates against or sexually harasses other employees, you can fire them immediately. It’s also typical to fire employees who commit or threaten violence toward clients or other employees promptly.

2. On-the-clock drug or alcohol use

It’s one thing if your employee has a glass of wine at the company holiday party. It’s another if the employee is so inebriated they can’t perform their work functions. Employees who are intoxicated in work settings not only reflect poorly on your company but also pose a danger. Drug and alcohol use in the office, at a worksite or at a work function is a valid reason to fire someone.

3. Unethical behavior

Unethical behavior encompasses infractions like falsifying company records, lying about work tasks and hiding information that could, if revealed to the public, lead to disastrous public relations. It can even include expressing strong, disagreeable political stances inside or outside the workplace. Any instance of unethical behavior, no matter how severe, is grounds for firing.

4. Company property damage

If an employee damages company machinery, computers or office space that results in significant financial or operational consequences, you can fire them.

5. Theft or misuse of company property

Theft is illegal, even if your employee takes a small bag of rubber bands home from your supply closet. That said, workplace theft is common, so you may want to only fire individuals who pilfer expensive items or property that represents a great cost to your business. Similarly, certain instances of company property misuse — for example, extensive use of company computers for personal purposes during work hours (or any amount of company computer use for morally dubious or illegal purposes) — may be a fireable offense.

6. Misleading job application

A Checkster study found that 78 percent of job applicants lie on their resumes. If you learn that a current employee’s resume contained fabricated information when they were hired, you can fire them. However, if the employee overstated some minor qualifications and is doing their job well, you may want to think twice before firing them.

7. Poor job performance

Poor job performance is a reasonable and legal reason to fire someone. Before firing an employee for poor job performance, however, meet with the employee, inform them of the areas they are struggling in and ways they can improve. While you still can fire an employee without taking these steps, doing so can decrease employee morale.

8. Excessive absence

It’s fine for an employee to take an occasional vacation or sick day. But they shouldn’t arrive late constantly or rarely work a full week. Excessively absent employees prevent your company from meeting deadlines and goals — excessive absence is an acceptable reason to fire someone.

9. Poor culture fit

A poor culture fit could mean many things. Maybe your employee is constantly negative. Maybe they don’t commit to their work or have a passion for it. Maybe they’re making jokes constantly, talking to their colleagues or otherwise distracting your team. All of these are acceptable reasons to fire someone. [Related: How to Hire an Employee for Cultural Fit]

10. Violations of other company policies

While a violation of company policies can merit firing, think carefully before dismissing employees for this reason. If your employee violates your social media policy by posting something that could harm your company’s public image drastically, you can justify firing them. However, if your employee checks their personal social media accounts during work hours, that’s not a severe enough infraction for dismissal. Instead, gently remind the employee of the policy. If they continue to do so after your warning, more extreme measures may be warranted.

11. Downsizing

While termination due to downsizing or budget cuts is often grouped separately from firing, it is a valid reason for employee dismissal. If you need to let employees go, it’s courteous to give them ample notice. The federal Worker Adjustment and Retraining Notification (WARN) Act requires certain employers to give advance notice ahead of layoffs.

Key TakeawayKey takeaway

The most common reasons for firing someone are poor performance, property damage, misleading or unethical behavior or statements or violation of company policies.

Illegal reasons to fire an employee

When faced with a choice to fire an employee, make sure you’re on the right side of the law. If you’re in doubt, consult an attorney.

To ensure the termination is performance-motivated over another reason that may breach labor or termination laws, ask yourself these questions before moving forward:

  • Is the employee failing to live up to job expectations? You need a valid reason why you’re firing an employee. If they aren’t keeping up with their responsibilities or fitting into the company culture, there may be cause for termination.
  • How long has the employee had a poor job performance? If an employee has had one or two infractions on their performance, that’s not enough of a reason to fire them. Everyone makes mistakes; however, repeat instances of poor performance after numerous meetings, probation periods and more are a cause for concern.
  • Have I documented these issues and notified an employee of their poor performance? Consider termination after informing the employee; otherwise, they won’t know why they’re receiving warnings. Documenting the issues on paper and electronic communication, such as email, is an HR best practice as well. If the situation ends in termination, you’ll have a paper trail of evidence and final warnings.
  • Was the employee given sufficient time and clear instructions to improve? It’s important to provide the employee enough time and direction to correct their actions before a company moves forward with a termination.

There are entirely illegal and impermissible reasons to fire someone, even in situations of at-will employment:

  • Discrimination: You are breaking federal law if your firing practices are discriminatory. Read more in our article about equal employment opportunity compliance.
  • Retaliation: You cannot fire employees who threaten lawsuits, whether for alleged discrimination, workplace safety violations or other reasons. You also cannot fire employees who don’t comply with illegal requests.
  • Refusal to take lie detector tests: In most cases, your employees have the right to decline lie detector tests. Refusal to take these tests is not a fireable offense.
  • Immigration status: As long as an employee can legally work in the United States, you cannot fire them due to their immigration status.

How to terminate an employee

Regardless of your reason for letting an employee go, remain respectful and tactful when doing so. Take the following steps when notifying an employee that you are terminating their employment.

1. Communicate openly and honestly with the employee well before the firing.

If you have an employee who isn’t performing well, try talking tactfully and respectfully about these challenges with them in private without mentioning anything about discipline or firing. In some cases, the employee may agree with your assessments and leave on their own.

2. Set a time, date and place.

Choose a time and date to meet with the employee in a private area away from other staff. Figure out a meeting time that allows the employee to gather their belongings discreetly, out of sight of other employees, immediately afterward.

3. Prepare beforehand.

Write a script for what you want to say. Outline your reasons for firing them, whether it’s because of a one-time offense or a series of long-term infractions. Make sure the reasons aren’t behaviors for which you’re letting other employees off the hook, though. Your script should state that the decision is final and there isn’t a chance that you will change your mind.

4. Have a colleague with you.

Ideally, a business partner, direct supervisor or HR employee should be present to keep affairs calm if the employee becomes angry or upset. Having another person in the room is also important in case the terminated employee makes any legal claims about what was said in the termination meeting.

5. Don’t make it personal.

If an employee isn’t a fit for your company’s culture, be kind about it. Don’t insult the employee — just because they don’t fit your company culture doesn’t mean they won’t fit in elsewhere. Likewise, if an employee is performing poorly, don’t say they’re bad at their job or insult their intelligence. Inform them that their performance doesn’t meet your expectations.

TipTip

Don’t make firing an employee a personal endeavor. Avoid insults or bad-mouthing an employee just because they don’t fit in with your company culture. Inform them that their performance isn’t in line with your company’s expectations and you wish them the best at another place of employment.

6. Keep it short.

Plan a sufficient amount of time to present your case and for your employee to ask questions — perhaps no more than 10 minutes total. If they ask questions, keep your answers short and to the point.

7. Retrieve the employee’s company materials.

When you fire an employee, you’ll need to retrieve any company materials in their possession. That means keys, ID cards, work computers and more. Change all company software passwords that the employee has access to.

8. If applicable, provide and explain severance benefits.

If your company offers severance pay or COBRA insurance to fired employees, explain how the employee will receive these benefits. Be clear about when the employee can expect to be paid their final wages — you must pay for all work done, even if it’s of poor quality. If the employee must sign any nondisclosure agreements, have them do so before leaving.

Tips for firing an employee from HR experts

When weighing your reasons for firing an employee, the severity of the incident may determine whether a firing is justified. In some instances, you may be inclined to issue a written warning rather than terminate the individual’s employment. Regardless of justification, you may be best served by discussing the situation with your attorney before you terminate an employee to ensure you aren’t at legal risk for a wrongful termination lawsuit.

We asked HR experts and professionals for their best advice on firing employees. These 15 tips should make the process a little bit easier.

1. Give the employee the opportunity to improve (or leave) first.

“Realizing that you’ve made a bad hire or that the candidate you had high hopes for is less than enthused with their current position, is tough — especially for small businesses. Even though it may seem easier to just cross your fingers and hope it gets better, the truth is that you need to take control of the situation. The best thing to do is have a conversation with this individual and express your concerns. Give them the opportunity to realize on their own that perhaps this isn’t the best fit. In some instances, after just that conversation, the employee may quit on their own.” — Rikka Brandon, recruiting and hiring consultant

2. Get everything in order beforehand.

“Practice what you plan to say to the employee and have all the required documentation in order so that you can make the process as smooth as possible. If you’re afraid that your nerves will get in the way, jot down a few talking points. At a minimum, you’ll need to explain the process to the employee about leaving the building, returning company-owned items, how long benefits will continue, etc.” — Amanda Haddaway, managing director of HR Answerbox

3. Choose a proper time and place.

“Plan the date, time and place — I prefer earlier in the week, [and] never on Friday. [Do it] during lunch or at another time when business impacts are minimized. Conference rooms are good places.” — Greg Szymanski, director of human resources at Geonerco Management

4. Don’t rush into the meeting.

“Make sure that you have at least 15 minutes before the meeting to relax and get clear about your objective.” — Jennifer Martin, business coach at Zest Business Consulting

5. Focus on the facts (and the law).

“When firing an employee, you need to focus on specific facts and … not attack the employee as a person. You also need to follow laws specific for your region for notice and, in some instances, severance pay.” — Chantal Bechervaise, HR writer and publisher of Take It Personel-ly

6. Protect your business.

“Document, document, document. Without proper documentation of company rules, position requirements [and] expectations, infractions and disciplinary policies, you will lose most lawsuits.” — Aaron Ziff, director of HR information technology at Parker Hannifin

7. Don’t go it alone.

“Don’t fire an employee alone … a firing is an emotional and sensitive situation and so you never know how someone will react. It would be wise to have an HR representative present during the meeting. If you don’t have dedicated HR staff, just make sure you have someone else you trust in the room with you when the firing takes place.” — Lisa Brown Morton, CEO of Nonprofit HR

8. Don’t let it be a surprise.

“A termination should never come as a surprise to an employee. The employee should have been receiving constant and real-time feedback from management all along. When an employee is taken off guard and doesn’t know and expect that termination is imminent, [that’s] when lawsuits arise.” — Joe Campagna, owner of My Virtual HR Director

9. Be consistent.

“Be sure your decision to fire is consistent with your past behavior and practices. Firing Bob today for being late to work three times while you did not fire Carol for the same behavior is a red flag.” — David Lewis, president and CEO of OperationsInc

10. Keep it short.

“Firing someone is never pleasant, regardless of the reason. I always recommend to be resolute with your decision, clear with your reasons and brief with your interaction.” — Steve Smith, president of GrowthSource Coaching

11. Don’t make up excuses.

“It’s OK to fire someone who simply doesn’t fit in with your organization and who never should have been hired in the first place. Don’t get sucked into trying to build a case on nonexistent performance issues. Be honest. This employment relationship isn’t working for any of the parties involved and it’s best to end it sooner rather than later.” — Richard Hadden, employee engagement consultant at Contented Cow Partners

12. Keep it private.

“If you do need to fire the employee, allow the person to leave with dignity. Don’t make the employee empty out his or her desk in front of colleagues, for example. Arrange for after-hours or Saturday packing.” — Leigh Steere, Senior Marketing Content Manager at Risk Strategies Company

13. Assign someone to escort the employee out.

“Have someone with them while they pack their personal items and then have that person collect keys [and their] personnel ID card and escort them out of the building.” — Kathi Elster, executive coach and co-owner of K Squared Enterprises

14. Make sure it’s them, not you.

“Do a self-assessment. If you’ve gotten to the point of having to fire someone, it’s a great time to evaluate your hiring, supporting and developing processes. Is this a pattern you’re seeing? If so, you need to address the root causes of your talent management issues.” — Rory Cohen, founder and president of Take 10 Now

15. If you’re making layoffs, give employees time.

“If you know that you will be having layoffs in three months, let your employees know after a month and give them the two months as severance. If you need key people to stay for a specific time, give them a bonus reward for continuing to produce until a set time.” — Tracy Vistine, vice president of talent acquisition at Messina Group

Advantages and disadvantages of layoffs

Advantages of laying off employees

Disadvantages of laying off employees

It reduces employment costs, saving your business money in the immediate term.

Terminating, recruiting and hiring employees is expensive if you later find you need a larger workforce again.

You can part ways with employees amicably and maintain a positive reputation.

Laid-off employees might file claims or lawsuits against you for wrongful termination.

It gives employees a clean break, with no ambiguity as to their employment status with your company.

It can reduce company morale and increase the risk of employee burnout.

It can stabilize your business for future growth.

It can reduce your company’s production capabilities.

Terminating an employee is tricky — do it the right way

Firing an employee is never pleasant and it is often complicated. Be sure you have just cause for letting an employee go and make sure you check with your HR team and legal counsel before making the final call. Even if the situation seems cut and dried, it’s important to be careful when firing someone. If you cross your T’s and dot your I’s, though, you’ll be able to do what’s best for your business without consequences.

Tejas Vemparala and Skye Schooley also contributed to this article.

Sean Peek
Business Ownership Insider and Senior Analyst
Sean Peek is the co-founder of a self-funded small business that employs more than a dozen team members. His years of hands-on entrepreneurial experience in bootstrapping, operations management, process automation and leadership have strengthened his knowledge of the B2B world and the most pressing issues facing business owners today. Peek uses his expertise to guide fellow small business owners and aspiring entrepreneurs in the areas of marketing, finance and software technology. Peek excels at developing customer bases and fostering long-term client relationships, using lean principles to drive efficiency and cost-saving, and identifying growth areas. He has demonstrated his business savvy through collaborations with Forbes, Inc., Entrepreneur and the U.S. Chamber of Commerce.
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