There are two types of meetings that an employer may have with a departing employee. An employee who is retiring or voluntarily resigning is generally requested to participate in an exit interview. In that meeting, the employer can cover the details of getting keys and company property, explaining any benefits to which the employee may be entitled, and generally facilitating the departure.
In contrast to the exit interview is the termination meeting. This, too, is a type of exit interview, but it occurs in the context of an involuntary termination. Consequently, the dynamics of the meeting tend to be less congenial.
There are at least three fundamental reasons for holding termination meetings. First, employers do not want disgruntled employees remaining on the premises. In too many instances that is a recipe for conflict of various kinds. Second, as in the exit interview, the employer should get keys and company property from the employee and inform the employee about matters such as COBRA continuation health coverage. Finally, in some instances the employer will be able to offer severance pay or some other consideration in exchange for execution of a release by the terminated employee. A well drafted release which the employee knowingly and freely signs may protect the employer from future lawsuits or other claims by the employee.
Preparation Before The Meeting
- Review the employee’s personnel file. Thoroughly review the employee’s file in order to become familiar with the employee’s work record and the reason for termination. It is critically important that the employer clearly explain to the employee the reason for termination. Failing to provide an explanation or providing a false explanation may later support an employee claim that the reason was a pretext for unlawful discrimination or other unlawful treatment.
- Identify property to be returned. Identify items in the employee’s possession that should be returned, e.g., keys, access cards, and company credit cards.
- Prepare final paycheck. Prepare the employee’s final paycheck. In many jurisdictions the final check must by law be delivered at the time of termination. In some jurisdictions, accrued but unused vacation time or paid time off (PTO) must also be compensated in the final check at termination.
If the employer is providing severance pay as a matter of company policy and without a release, then severance pay may be paid at the termination meeting. However, if the employee must sign a release, severance pay should not be paid until the release is signed. Employees over 40 years of age generally will have at least 21 days to decide whether to accept the severance and an additional seven days after signing the release to reverse their decision. Consequently, in some instances it may be as much as four weeks before severance is paid. See Last Paycheck (payment) chart for states’ timing requirements.
- Prepare a termination packet to be hand-delivered at the termination meeting. The packet should include a termination letter and benefits notices:
- Termination letter. The termination letter should state the effective date of termination and explain the final payment being made at the time of termination. If there is to be a delay in paying severance, address that in the letter. Generally if the termination is a disciplinary one, the employer should not recite the details of the reason for discharge in the letter, and such an explanation is not required in most states. If the employee is being laid off as part of a reduction in force or the like, the employer may wish to articulate that reason in the letter.
- Benefits Summary. The employer should provide the employee a clear statement of accrued benefits and notices regarding post-termination benefits, such as continuation of health coverage and 401(k) plan information. See the sections on COBRA and HIPAA regarding post-termination benefits.
- Unemployment compensation. Generally, employees who lose their jobs are entitled to unemployment compensation benefits. Employers may not be obligated to provide benefits, however, if the employee is discharged for “cause.” Although definitions vary from state to state, an act that an employer considers “cause” for discharge, e.g., insubordination, may not be considered “cause” by the unemployment agency. Moreover, an employer may decide as a matter of policy not to oppose a claim for compensation by an employee discharged for cause. The employer may wish to provide information regarding claims for unemployment benefits. Check state law to determine specific obligations.