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You’re fired!

May 1, 2015

Gary Churnovic, SPHR®, SHRM-SCPSM Senior Human Resources Consultant 

Our clients often ask “Can I fire my employee for any reason at any time without notice?”

If you employ people in an at-will state, the answer is yet, but a quick-fix decision may result in a longer term complexity. Employment is an agreement between the employer and the employee. The employer agrees to provide compensation in exchange for the labor or services of the employee. A general definition of an employee is:

“A person in the service of another under any contract of hire, express of implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed.”

So what about firing that employee? Iowa, Illinois and Wisconsin are all at-will employment states, “At-will employment is a term used in U.S. labor law for contractual relationships in which an employee may be dismissed by an employer for any reason (that is, without having to establish ‘just cause’ for termination), and without warning.

Here’s the big but. There are many risks to consider when firing an employee. Employers can fire employees, but employees can claim they’ve wrongfully discharged based on unfair discrimination. You’ll want to be certain that discrimination was not a basis for your decision to terminate.

In all 50 states, federal law prohibits discrimination based on: race, color, national origin, religion, sex (including pregnancy, childbirth, and related medical conditions), disability, age (40 and older) and citizenship status. States may have additional requirements, making it unlawful for employers to discriminate based on protected class status.*(See table at end of article)

In addition to discrimination issues there are also public policy exceptions to consider. Under the public policy exception an employee could be considered wrongfully discharged if they were fired in relation to a well-established state public policy. For example:

Getting fired for filing a worker’s compensation claim after being injured on the job. Refusal to break the law at the request of the employer. There is yet another factor to consider, the implied contract exception.

Even if you do not have a formal employment contract, many employers communicated policies, either orally or in writing, that describe workplace terminations and other rules, guaranteeing that employees will be terminated only for just cause or for non-arbitrary reasons. If your handbook is written in a way that implies contractual relationship that contradicts the at-will relationship, you may be jeopardizing the at-will status.

Whenever possible, provide your problem employee with due process by regularly and formally communicating performance and related issues and expectations. The practice of providing due process could actually result in correcting bad performance or behavior, reducing the costs of turnover. Don’t forget to document all communications. It will help you if your action is challenged in the future.

You’ll also want to consider the costs of increased unemployment compensation taxes if you don’t have a defendable reason to terminate.

Ultimately, the decision is in your hands as the employer. As an at-will employer, you can terminate for any reason, at any time without notice. But remember, this is not Celebrity Apprentice, and you’re not Donald Trump. Take your time, follow the due process, obtain a professional opinion, and make a substantiated low-risk decision you won regret.Click here for substantiated low-risk decision.

For more information or assistance, call 888-556-0123, email hrconsulting@hkpayroll.com  or submit our online form.

This article was previously published in the April 2015 Tri-State Business Times.

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