Minimum payroll frequencies are determined by each state and can be quite confusing. I’m often asked “How often do I have to pay my employees” during a Certified Payroll Training Webinar. State minimum paycheck frequencies are shown below – this information comes directly from the U.S. Department of Labor’s website.
It’s difficult to thoroughly cover the requirements of all 50 states in a 2 hour webinar, but it has crossed my mind that a series of blog posts on the differences between what State Laws are for how often payroll must be generated and how that can effect the generation of a certified payroll report would be a good thing to do. While I could have simply started this series and talked about the complexities of generating certified payroll reports when issuing employee payroll on anything other than a weekly basis – I first wanted to display the requirements by state, rather than just put off a link to the U.S. Department of Labor website.
Under the Federal Davis-Bacon and related Acts; contractors and subcontractors performing work on Federal or Federally-aided construction-type contracts are required to submit weekly payrolls. The Copeland Act provides further/clearer requirements; indicating that contractors and subcontractors performing work on Federally financed or assisted construction contracts “furnish weekly a statement with respect to the wages paid to each employee during the preceding week”.
Obviously, contractors and subcontractors who issue their payroll on a weekly basis find the necessary information easier to obtain; therefore, making compliance simpler to obtain.
State |
Weekly |
Bi-Weekly |
Semi-Monthly |
Monthly |
| Alaska | X | X | ||
| Arizona | X 3 | |||
| Arkansas | X | |||
| California | X 9 | X 9 | X | |
| Colorado | X | |||
| Connecticut | X 4 | |||
| Delaware | X | |||
| District of Columbia | X | |||
| Georgia | X | |||
| Hawaii | X | X 5 | ||
| Idaho | X | |||
| Illinois | X | X 2 | ||
| Indiana | X | |||
| Iowa | X | X 6 | X | X |
| Kansas | X | |||
| Kentucky | X | |||
| Louisiana | X | X 7 | ||
| Maine | X 8 | |||
| Maryland | X | |||
| Massachusetts | X | X | ||
| Michigan 9 | X | X | X | |
| Minnesota | X 10 | |||
| Mississippi | X 11 | X 11 | ||
| Missouri | X | |||
| Montana 12 | ||||
| Nebraska 13 | ||||
| Nevada | X | X 2 | ||
| New Hampshire | X | |||
| New Jersey | X | |||
| New Mexico | X | X 2 | ||
| New York | X 14 | X 14 | ||
| North Carolina 15 | ||||
| North Dakota | X | |||
| Ohio | X | |||
| Oklahoma | X | |||
| Oregon | X | |||
| Pennsylvania 13 | ||||
| Rhode Island | X 16 | |||
| South Dakota | X | |||
| Tennessee | X | |||
| Texas | X | X 17 | ||
| Utah | X 18 | |||
| Vermont | X | X 19 | X 19 | |
| Virginia | X 20 | X 20 | X 2 | |
| Washington | X | |||
| West Virginia | X | |||
| Wisconsin | X | |||
| Wyoming | X |
- Alabama and South Carolina – No regulations or not specified.
- Illinois, Nevada, New Mexico and Virginia – Monthly payday requirements for Executive, Administrative, and Professional personnel.
- Arizona – Payday two or more days in a month, not more than 16 days apart.
- Connecticut – Longer interval (up to monthly) permitted if approved by Labor Commissioner.
- Hawaii – Employees may choose to be paid on a monthly basis under special election procedure. Director of Labor and Industrial Relations also may grant exceptions to the general semi-monthly payday requirement. Payday requirement applies only to private sector employment.
- Iowa – Any predictable and reliable pay schedule is permitted as long as employees get paid at least monthly and no later than 12 days {excluding Sundays and legal holidays} from the end of the period when the wages were earned. This can be waived by written agreement; employees on commission have different requirements.
- Louisiana – Applicable to entities engaged in manufacturing, mining, or boring for oil, employing 10 or more employees, and to every public service corporation. Payment is required once every two weeks or twice during each calendar month.
- Maine – Payment due at regular intervals not to exceed 16 days.
- California and Michigan – Frequency of payday depends on the occupation.
- Minnesota – Employees engaged in transitory employment, i.e. migrant workers, which require and employee to change the employee’s pace of abode, because the employment is terminated wither by the completion of the work or by the discharge or quitting of the employee must be paid within 24 hours.
- Mississippi – Applicable to every entity engaged in manufacturing of any kind in the State, employing 50 or more employees and employing public labor, and to every public service corporation doing business in the State. Payment is required once every two weeks or twice during each calendar month.
- Montana – Wages must be paid within 10 business days after the wages are due and payable.
- Nebraska and Pennsylvania – Payday designated by employer.
- New York – Weekly payday for manual workers. Semi-monthly payday upon approval for manual workers and for clerical and other workers.
- North Carolina – None specified, pay periods may be daily, weekly, bi-weekly, semi-monthly or monthly.
- Rhode Island – Childcare providers shall have the option to be paid every two weeks.
- Texas – Monthly payday for employees exempt from overtime provisions of the Fair Labor Standards Act.
- Utah – Payments are to be paid at regular intervals but in periods no longer than semi-monthly.
- Vermont – Employers may implement bi-weekly and semi-monthly payday with written notice
- Virginia – Employees whose weekly wages total more than 150% of the average weekly wage of the Commonwealth may be paid monthly, upon agreement of each affected employee.
NOTE: South Carolina – Employers with 5 or more employees are required to give written notice at the time of hiring to all employees advising them of their wages agreed upon, and the time and place of payment along with their expected hours of work. The employer must pay on the normal time and at the place of payment established by the employer.
Stay tuned over the next week to find out some of the problems that can occur when a company follows various state payroll requirements {bi-weekly, semi-monthly, and monthly paychecks} and how the pay frequencies affect the submission of their certified payroll reports.
Payroll can be one of the most complex duties of any bookkeeper’s job – especially when you need to OR want to track your Worker’s Compensation costs for job costing purposes and pay your employees Vacation, Holiday and Overtime wages. Just take a look at this question, submitted by one of our blog subscribers!
I have set up the Workers Compensation tracking in QuickBooks for a construction company with no problem, it seems to be working fine. My question is – how do you keep track of Holiday, Vacation, and Overtime pay? Do I set up each payroll item with the Workers Comp {WC} rate for each class? For example Carpenter-Holiday and Carpenter-Vacation? Thanks, Kathleen
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Answer:
Hi Kathleen;
That’s an excellent question!
One of the first things that you should do is contact your Worker’s Compensation Insurance carrier and ask them if there is a reduced Worker’s Comp rate for when you pay your field workers for non-field related time such as Vacation or Holiday pay. I once asked this question of the Insurance underwriter and much to my surprise he told me {grudgingly} that Vacation and Holiday pay for field employees was computed at a lower experience rate than their normal wages; mainly because there was “no risk” involved for those wages – he quickly followed this up with “but this will involve more tracking on your part” for the annual audit/review.
The QuickBooks payroll module is pretty darn flexible; but like the rest of the program it’s generic – so sometimes it’s a little “lacking” when it comes to some specific things like the situation above.
Even if I didn’t fall into the special situation of a reduced WC Experience Rate for Holiday and Vacation time, I would still create specific payroll items based on Work Classification/type of wage: so Carpenter-Holiday or Carpenter-Vacation would be the way I would go.
Overtime can get tricky, especially if your contractor client works on prevailing wage jobs and pays the fringe benefit portion of the prevailing wage in cash to the employee as part of the hourly gross wage, QuickBooks will need some “help” when determining the overtime rate. {This becomes complex and cannot be explained in a blog post but I plan on providing a fee-based live and pre-recorded webinar on how to set this up and make it work in QuickBooks – which will be available in January 2012}.
You will need to add an “Overtime” payroll item to your Payroll Item List using either the E-Z Setup or Custom Setup method naming them Carpenter OT, Laborer OT, etc and being sure that you select that the type of wage is an Overtime rate. If the premium OR half-time portion of overtime pay is excluded from Worker’s Compensation tracking, make sure that you have checked that option in the Workers Compensation preference; found from the Edit menu -> Preferences -> Payroll & Employees -> Workers Compensation button and checking the option to “Exclude overtime premium from Workers Comp calculation”
Right click on the image to enlarge it
Make sure that your Codes in the Workers Comp List are descriptive – meaning that when you choose the WC Code in Weekly timesheets that you will understand what code is being assigned to what payroll item.
Setting things up in this manner will provide you with all the payroll numbers that you will need during an audit and clearly indicate the type of wages that are being paid.
If you feel this QuickBooks Payroll tip has been helpful, please take a moment to leave us a comment or to share it with others on your favorite Social Networking site 
Payroll and holiday pay can be confusing and overwhelming and here we are right at the height of the upcoming holiday season! I found these great tips from HR Matters and wanted to share them with you. These tips provide answers to common questions such as: Do you have to provide paid holidays? What about for new employees? Do you have to pay overtime to employees who have to work on a holiday?
We’re officially heading into the holiday season with Thanksgiving coming up next week and Christmas and the New Year just around the corner. If you are like most employers, you may be dealing with holiday pay issues. To help you out, the HR Matters E-Tips Editors have put together the top seven holiday questions that they answer on a regular basis. (You also can find the answers to these and many more holiday questions in the HR Matters Tools and Resource Center online, Policy Manual, Holidays, Chapter 503.)
1. Do we have to provide paid holidays?
Absent a collective bargaining agreement or other contract providing paid holidays, federal law does not require you to pay nonexempt employees for holidays that they do not work. Most organizations offer a limited number of paid holidays to create employee goodwill. According to the Society for Human Resource Management 2011 Benefits Survey, 97% of responding employers provide paid holidays to their employees.
Note, however, that if you do not provide paid days off for holidays, you should pay exempt employees for any holidays that your organization is closed. (As a reminder, the Department of Labor (DOL) regulations implementing the Fair Labor Standards Act (FLSA) provide that the following categories of employees are exempt from the overtime and minimum wage requirements of the FLSA: (1) bona fide administrative, executive, or professional employees; (2) workers employed in outside sales; (3) highly skilled computer-related employees; and (4) certain “highly-compensated” employees.)
Although the DOL regulations implementing the FLSA do not specifically address unpaid holidays, they do provide that an employee will not be considered paid “on a salary basis” if deductions are made “for absences occasioned by the employer or by the operating requirements of the business.” Unpaid holidays generally are considered the type of absence “occasioned by the employer.” According to a DOL Wage & Hour Opinion Letter dated 5/27/99, the DOL indicated that an employee will not be considered to be paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer, such as being closed on certain holidays, or the operating requirements of the business. Further, the regulations recognize only a limited number of instances when an employer may make deductions (or “dock”) for absences of a full day or more without jeopardizing the exemption and thus incurring overtime liability. But, holidays do not fall under any of those exceptions.
2. Can we require employees to complete an introductory period before becoming eligible for holiday pay?
You most likely can exclude new nonexempt employees from holiday pay. If there is no collective bargaining agreement or other contract specifying that new employees are eligible for holiday pay, then it is up to your organization’s policy. Many employers exclude new employees from certain benefits granted to longer-term employees until completion of the introductory period.
However, new exempt employees should not be covered by this policy and should receive pay for holidays. As explained in # 1, above, if you do not pay exempt employees, new or old, for holidays they do not work, you may jeopardize their exempt status.
3. Can we require employees to work on holidays?
Since paid holidays are a discretionary benefit, you may require employees to work holidays according to the operating needs of the organization (and assuming no collective bargaining agreement or other contract prohibits this work). We recommend that employers’ holiday policies should include language that indicates employees may be required to work on holidays. For example, our HR Matters Tools and Resource Center, Policy Manual, includes the following provision in the model Holiday policy in Chapter 503: “The Company may schedule work on an observed holiday as it considers necessary. Normally, work on an observed holiday will be paid as if the day were a regularly scheduled work day. Employees will be given the option of receiving additional pay for the day or a “floating” holiday that may be taken, with the prior approval of their supervisor, at another time during the year.”
Note that you generally are not required to pay nonexempt employees for time and one-half for holiday work unless the employee has already worked 40 hours in the week (see # 4, below) or to provide a paid floating holiday at a later point. However, the model policy provides these extra benefits in recognition of the extra burden for employees who work on holidays.
4. Do we owe nonexempt employees overtime if they work on holidays?
The FLSA requires you to pay overtime to nonexempt employees at time and one-half their regular rate of pay for all hours actually worked over 40 in a single workweek. Accordingly, you will owe nonexempt employees who work on holidays overtime only if the employees end up working more than 40 hours because they are working on the holiday.
So, for example, if an employee has worked four 10-hour days (40 hours) and then works on a designated holiday that same week, then the employee should receive overtime for all of the holiday work hours. But, if the employee works four 8-hour days (32 hours) and then works an additional eight hours on the holiday, for a total of 40 hours worked in the week, then that employee is not entitled to overtime for the holiday work hours. (Note, however, that a limited number of states, such as Rhode Island, require payment of at least time and one-half for employees who work on certain holidays, so be sure to check state law, too.)
As an aside, if you voluntarily pay a premium of time and one-half (the equivalent of overtime) for work on a holiday, the FLSA regulations generally allow you to credit this extra compensation towards any overtime that might actually be earned in the same week.
5. If an employee works 40 hours in a week and then takes a paid holiday, do we owe the employee overtime?
No. As discussed in # 4, above, nonexempt employees must be paid overtime only for all hours actually worked over 40 in a single workweek. Thus, in calculating actual working hours for a nonexempt employee, you do not have to count any paid time off in the overtime calculation if the employee did not perform any work during the time off.
So, even if a nonexempt employee works a full 40-hour workweek and also takes a day of paid holiday and is paid for 48 hours that week, the employee is not entitled to overtime pay since he did not actually work more than 40 hours in the workweek.
6. What if an employee is on FMLA leave when a holiday occurs? Should they receive holiday pay?
The answer depends on your policy. You generally do not have to pay an employee for holidays that occur while the employee is out on unpaid FMLA leave if it is not the employer’s policy to provide this benefit during other types of unpaid leave. Similarly, if an employee’s work schedule is reduced for intermittent FMLA leave, you may reduce proportionately the employee’s benefits, such as holiday pay, if the employer’s normal practice is to base this benefit on the number of hours an employee works. However, you may not eliminate the full-time employee’s benefits because the employee is working a part-time schedule if part-time employees normally are not eligible for these benefits.
7. How do we pay nonexempt employees who work a compressed workweek, working four days a week, ten hours a day? Should these employees receive holiday pay if the holiday falls on a day that they are not scheduled to work?
Whether the nonexempt employees working compressed workweeks qualify for holiday pay depends on the terms of your holiday policy and how it has been implemented. Employers using compressed schedules (such as employees working four days/ten hours a day) generally take three basic approaches to eligibility for holiday pay.
(Download free Holidays model policy including best HR practices and legal background. Will require that you create a free account.)
Some employers pay only for holidays occurring on the employee’s regularly scheduled work day. Another more common approach is to allow compressed workweek employees to take off a day on which they would otherwise be scheduled to work. For example, if the employees normally work four days, they work only three days during weeks with holidays. Still other employers prefer to have compressed workweek employees on the job at least four days a week and pay for the holiday even if the employee is not scheduled otherwise to work that day, giving the employees an extra day of pay. This last practice, however, may lower the morale of employees who work a regular schedule and thus receive less pay for the holiday week.
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We hope you’ve found these answers to 7 holiday pay questions to be helpful; if so please take a moment to leave a comment or share this with others on your favorite social networking sites.
If you have 100 or more employees or are a federal contractor, you likely must file the EEO-1, VETS-100, or VETS-100A forms. Find out what your obligations are and why the VETS reporting has been delayed in this article from HR Matters.
The deadline is approaching for many employers to report to the federal government the ethnic, racial, gender, and veteran composition of their workforces. Specifically, if you are a covered employer, you must file the Employer Information Report, Form EEO-1, by September 30, 2011. But, thanks to a technical glitch, the VETS-100 and VETS-100A forms are not due until November 30, 2011.
Employer Information Report, Form EEO-1
As a reminder, private employers with 100 or more employees and federal contractors with 50 or more employees and a contract of $50,000 or more are required to submit annual EEO-1 reports to the Joint Reporting Committee (JRC), a committee of the EEOC and the Office of Federal Contract Compliance Programs (OFCCP). These reports track employee data by race, ethnicity, sex, and job classification. The EEOC uses the data to support enforcement of Title VII of the Civil Rights Act and to analyze employment patterns. The OFCCP uses the information to target employers for compliance evaluations.
The EEO-1 must be filed each year by September 30. Employment figures from any pay period in July through September may be used. Online reporting is the preferred method of filing, though employers are permitted to file paper reports.
Currently, there are seven race/ethnicity categories: Hispanic or Latino, White, Black or African-American, Native Hawaiian or Other Pacific Islander, Asian, American Indian or Alaska Native, and Two or More Races. (As you may recall, the EEO-1 report got a major overhaul in 2007 as a result of findings from the 2000 census that increased the number of race/ethnicity categories from five to seven.) To obtain the information, you are directed to ask employees to self-identify voluntarily. If an employee declines to self-identify, you can rely on visual identification of the employee or post-employment records. The EEO-1 instruction booklet includes sample language, in Section 4 of the instructions’ appendix, that you can use in an employee questionnaire on race and ethnicity to explain the EEO-1 voluntary self-identification process.
The EEOC has provided helpful information on the EEO-1 Report on its Web site at http://www.eeoc.gov/employers/eeo1survey/index.cfm, including a a copy of the EEO-1 instruction booklet, online at http://www.eeoc.gov/employers/eeo1survey/upload/instructions_form.pdf
VETS-100 and VETS-100A
Certain federal contractors, regardless of the number of employees, also must file the VETS-100 or VETS-100A form. The VETS-100 and VETS-100A require you to report the number and job classifications of the veterans you employ, and like the EEO-1 report, normally are due September 30. This year, though, because of “technical problems” (according to the special announcement posted on the Department of Labor’s (DOL) Veterans’ Employment and Training Service Web site), contractors will not be able to begin filing online until October 1, 2011, and then will have until November 30, 2011, to submit their forms.
Which contractors must file the VETS-100, versus the VETS-100 A, is a bit confusing, however, thanks to a statutory increase in the contract threshold size that was formally implemented in 2008. The contract threshold size was increased from $25,000 to $100,000 by the 2002 Jobs for Veterans Act, which initially was scheduled to take effect on December 1, 2003. The law also changed the categories of veterans covered that employers must report. However, the DOL did not issue implementing regulations until May 2008, and as a result, the $100,000 threshold and new reporting categories were not implemented until 2008.
According to the regulations, found in 29 C.F.R part 61-250, the VETS-100 form must be filed only by federal contractors with current contracts of at least $25,000 entered into before December 1, 2003. Federal contractors that entered into a contract of at least $100,000 or more on or after December 1, 2003, must file the VETS-100A according to regulations found in 29 C.F.R. part 61-300. Further, contractors that modified contracts entered into before December 1, 2003, and the modified contracts are now worth $100,000 or more also must file the new VETS-100A.
Employment figures from any one pay period ending between July 1 and August 31 of the current year may be used for the VETS forms. As with the EEO-1 report, online reporting is the preferred method of filing, though employers are permitted to file paper reports. If you have questions about either the VETS-100 or VETS-100A, you may direct them to the VETS-100 Help Desk at (866) 237-0275 or via e-mail to VETS100-customersupport@dol.gov. Information about the filing requirements and sample forms from 2010 are available online at http://www.dol.gov/vets/programs/fcp/main.htm
Additional Resources provided by HR Matters:
- Download a free Equal Employment Opportunity model policy including HR best practices and legal background – you will need to create a free access account to download the information.
- Contact them TODAY to at (800) 274-6774 to order the CD of their Audio Conference being held today on the Federal Contractor’s Affirmative Action Plan: How to Prepare for New OFCCP Enforcement mention Conference Code PPSE.
This article is being republished with permission.
© 2011 Personnel Policy Service, Inc. All Rights Reserved. HR Matters is a registered trademark of: Personnel Policy Service, Inc. 159 St. Matthews Ave., Suite 5, Louisville, KY 40207 Tel: 1-800-437-3735 – Fax: 1-800-755-7011
A payroll tip about relying on “At-Will” in employee terminations can be dangerous from HR Matters E-tips, an HR Policy & Compliance Expert since 1972.
If an employee is “at will,” you don’t have to tell him why you are firing him, right? Technically, yes, but if you handle terminations this way, you could find yourself facing a number of legal claims. Find out the five steps you should always take when terminating at-will employees.
Have you ever been tempted to terminate an at-will employee without providing him with a reason? Maybe you did not properly document the employee’s performance problems or are so fed up with his attitude that you feel like you have to take action immediately. After all, the “at-will” concept, simply put, allows you to terminate employees at any time, for any legal reason, or for no reason at all.
However, although courts generally have upheld this right, these rulings do not mean that you should casually terminate without giving a reason or without following normal policies and procedures. In fact, if you try to fire an employee by only invoking the at-will clause, you could easily find yourself defending against a discrimination or wrongful termination claim.
To help avoid these claims, you should first follow your normal discipline and termination procedures, whenever possible. You should think of your at-will clause really only as a last resort legal defense, one to be used when all else fails. To apply the at-will concept, you first need to understand what “employment-at-will” really means and what it protects. In addition, we will show you five steps to take before terminating employees.
What “At Will” Really Means
The at-will relationship refers generally to employees who do not have contracts guaranteeing employment for a specific period of time (such as one year). Under the at-will doctrine, you have the right to terminate those employees who are working without contracts at any time and for any legally permissible reason. At the same time, these employees also have a similar right to resign whenever they want. In other words, at-will employment is a somewhat harsh and impersonal legal concept that says both parties can terminate the relationship at any time.
However, an at-will statement does not really give you free reign to terminate employees for no apparent cause. There are two reasons for this. First, although every state except Montana recognizes the at-will employment relationship, either by court decision or by statute, most also restrict it in some way. Courts in a majority of states have placed limitations on the at-will application when they find that the employer’s policies actually form a contract that the employer did not follow. So, for example, in Brown v. Scott Paper Worldwide Co., 20 P.3d 921 (Wash. 2001), the Washington state Supreme Court decided that the handbook given a paper salesman, after he received a sales agreement containing an at-will clause, modified his at-will status. The handbook did not contain an at-will clause but instead promised specific treatment in specific circumstances. And, in Gaudio v. Griffin Health Servs. Corp., 733 A.2d 197 (Conn. 1999), the Connecticut Supreme Court determined that an employer was liable for breach of contract when it terminated an employee without just cause because the organization’s employee handbook stated that it would treat employees fairly and would terminate only for serious misconduct.
In addition, courts have restricted the at-will application when they have found that a termination violated some public policy, or that a “whistleblower” statute or statutory anti-retaliation provision has been violated, or that the employer’s action constituted a wrongful act (or, in legal jargon, a “tort”). The result is a patchwork of case law that varies from state to state, making it difficult for you to know when, or if, you can rely on the at-will nature of the relationship.
The second reason for caution is that many employees are specially protected under federal or state discrimination laws that preempt, or prevail over, the at-will status. Therefore, if you terminate a protected employee for “no reason” or without following your normal disciplinary process, you are quite likely raising a red flag that the termination was improper or even discriminatory. Thus, you may be provoking a legal challenge that might not otherwise have occurred.
What “At-Will” Protects
Based on the above discussion, you may think that the at-will concept has little value. However, a clearly written at-will statement is still a valuable tool to protect your policies and procedures so that they are not interpreted as inflexible legal contracts that must be followed exactly. In several cases, employers have been forced to follow their policies uniformly, without regard to differing circumstances.
Take, as an example, an employee handbook that does not have an at-will statement but includes a disciplinary policy stating the employer will follow certain steps before terminating an employee. In the absence of an at-will clause, a court can conclude that the disciplinary policy is a contract and that the employer must follow each step precisely before it can fire anyone. For example in Havill v. Woodstock Soapstone Co., 865 A.2d 335 (Vt. 2004), the Vermont Supreme Court determined that an organization’s personnel policies that detailed a process entitling an employee to two written warnings in a twelve-month period prior to termination for “willful or repeated violations, or exaggerated behavior not in the best interest of the company or its employees” established a “just cause” requirement for termination and created an implied employment contract that was breached when the employer terminated its employee without warning. The court said that the policy language showed the employer’s intention to be bound by its provisions since it contained no at-will disclaimer to the contrary.
Or, consider a policy that lists specific work rule violations that will result in immediate termination, without at the same time including an at-will reference stating that the list is not all-inclusive. A court in this situation could find that the employer may only terminate for the listed reasons.
Five Steps to Safer Terminations
So, if it is dangerous to base a termination solely on the at-will concept, how do you terminate a problem employee when a manager has not properly documented performance deficiencies? Your best bet is to follow your normal disciplinary process, even if that means taking extra time before you terminate the employee. For most employers this includes:
- Giving notice to the employee of the specific performance problems and the consequences of not improving.
- Establishing goals for improvement.
- Setting a reasonable time frame for meeting the goals (normally two weeks to thirty days).
- Following up to see if there is improvement.
- Terminating the employee if the goals have not been met.
To support your actions further, you should document the performance issues and the steps taken before terminating the employee. This record helps establish the fairness of your process and can help defend against any subsequent discrimination or wrongful discharge claims.
Of course, you may encounter circumstances where you feel you cannot take the time to follow your normal disciplinary procedure. In these cases, it is still better to discuss the specific problems with the employee and explain that they are the reason for the termination. If you simply invoke the at-will relationship and give no reason for the termination, the employee may assume that the true motive is related to discrimination or some other illegal act, and thus seek legal recourse.
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