At some point during your business’s growth, you will be faced with the termination of a team member, whether it’s involuntary or a voluntary resignation. By following an off-boarding process, you will find it easier to carry out the termination, protect the rights of your business, and ensure a smooth transition for both you and your team member. Plus, you’ll want your team member to walk away feeling respected and valued.
Below is an off-boarding guide to help you through this process. I’d recommend using this information to create a checklist that’s specific to your business.
– Before the Termination –
Official Resignation and Documentation
Voluntary: Ask your team member to write an official resignation letter or email to keep on file that states they’re leaving and their last day
Involuntary: You’ll want to have documentation of previous coaching and performance conversations on file.
Company Access
Voluntary and Involuntary: Once you know the date and time of the termination (whether immediate or an agreed upon time), schedule to have your team member’s network access shut off effective their last day. Put a plan in place for how you will reroute these different accounts, so you don’t lose any business.
Prepare a Final Paycheck
Voluntary and Involuntary: Check the final paycheck laws that your state has in place for whenever a team member leaves your company. Some states, like California for example, require that an exiting team member get their last paycheck on their final day (involuntary) or within 72 hours (voluntary). Are they owed overtime, a bonus, or vacation time? Will they be receiving severance pay? These are all things to consider.
Prepare a Separation Agreement and/or Termination Paperwork
Voluntary and Involuntary: Work with your attorney to create a separation agreement and/or termination paperwork. Doing this can help release your business from any binding claims and is a way of saying both you and your team member have reached an amicable end to your working relationship. Having an agreement isn’t required by law and your team member doesn’t have to sign it. However, after signing (if written correctly), they can’t sue your business for wrongful termination or severance pay.
Prepare a Benefits Letter
Voluntary and Involuntary: Immediately following the termination meeting you will want to send a letter that outlines the status of their benefits. This letter will include everything from life insurance, health coverage, stock options and retirement plans. Also, if you have more than 20 employees and provide group health coverage, you will want to be sure you comply with the Consolidated Omnibus Budget and Reconciliation Act (COBRA) to offer continuation of coverage (at their own expense and at full cost).
– The Termination Meeting –
Format of the Meeting
Voluntary: Have either HR, operations, or a founder (depending on the size of your company) schedule an exit interview on your team member’s last day.
Involuntary: You’ll want to be sure that you don’t terminate anyone without a witness in the room with you. It can be a co-founder, director, or advisor.
Status of Benefits, Final Paycheck, and Next Steps
Voluntary and involuntary: Use this time to go over the information in your prepared benefits letter and answer any questions your team member might have regarding next steps. Give your team member their final paycheck (if applicable).
Collect Company Property
Voluntary and Involuntary: At this point, you’ll want to be sure to collect any items that belong to your business. Some examples are a laptop, charger, cell, keys or key card, company books and materials.
Passwords
Voluntary: Have your team member provide you with their passwords and other information for accessing any electronic files. Be sure to update those passwords too.
Involuntary: Change any passwords (social media, company emails, etc.) the same day, if not immediately following the meeting.
Confirm Contact Information
Voluntary and Involuntary: Confirm that you have current contact information for future communication (W2’s in particular). I’d also recommend a backup and verify your team member’s emergency contact information is up-to-date.
– After the Termination –
Separation Agreement, Benefits Letter, and Next Steps
Voluntary and Involuntary: Send your prepared separation agreement and benefits letter to your team member and outline next steps.
Terminate in HRIS and Payroll Systems
Voluntary and Involuntary: Process the termination in any HRIS and payroll systems that you use.
Backfill the Position
Voluntary and Involuntary: Look at your current team and your business’s goals to determine if you want to backfill this position. If you do decide to backfill, be sure to follow a process to help get the right person on your team.
As you can see, there are many moving parts to a termination, and you will thank yourself later for putting a process in place that’s specific to your business. Comment below if you’ll be creating a checklist to ensure a smooth transition for both you and your team member!
This guide is for informational purposes only and not for the purpose of providing legal advice. You should always contact your attorney to determine if this information, and your interpretation of it, is appropriate to your particular situation and state laws.