Do you have questions about how to terminate employees in California?
Terminating an employee is not an enjoyable experience for anyone involved. Not only are emotions in play, but as an employer there are a number of legal questions and concerns to navigate when terminating an employee. Given this reality, it is important to be aware of the potential legal risks that accompany the termination of an employee so that you can protect yourself from lengthy and costly lawsuits.
As a California Employer, how can I terminate an employee?
In California, employment is “at-will” by default. As the name implies, an at-will employment relationship allows for an employee to be terminated at any time, with or without cause or prior notice. Conversely, an employee may resign at any time, with or without providing their employer with prior notice. Ultimately, at-will employment provides both the employer and employee with significant freedom in determining the future of the employment relationship.
As an employer, there are things you can do at the beginning of the employment relationship to help ensure everyone is aware of the nature of the relationship, such as: having an employment-at-will statement on your job applications, clarifying the nature of the employment relationship in your employee handbook, and having new hires sign an employment-at-will acknowledgement on their first day.
How do I pay an employees’ wages after they’ve been terminated or resigned?
If your employee is owed unpaid wages after their termination, these wages are to be paid immediately. If you fire an employee, you must pay the employee at your business, or wherever they were terminated.
If an employee quits after providing at least 72 hours notice of their intention to quit, they must be paid their unpaid wages at their place of employment on their last day of work. In the event an employee quits without providing at least 72 hours notice of their intention to quit, however, then you have 72 hours to pay the employee their unpaid wages. These unpaid wages can be made available to the employee at your place of business, or mailed to the employee at the address listed in their personnel file.
What happens if I don’t immediately pay an employee any unpaid wages after they quit or have been terminated?
An employer who fails to furnish an employee’s unpaid wages within the time discussed above can potentially be subjected to penalties. These penalties amount to a day’s worth of the ex-employee’s wages for each day their unpaid wages are withheld, for up to 30 days. Because of how fast these penalties add up, it is important to provide an ex-employee with their unpaid wages as soon as possible.
How do I pay an employee any commissions they earned after leaving the job?
If you can’t calculate an employee’s commissions by the time they’ve been terminated or quit, or if the sale is not fully completed by the time the employee is discharged, then once the employee’s commission is calculated they must be paid accordingly.
Do I have to pay an employee their bonuses when I fire them?
Yes, any bonus must be paid as soon as it can be calculated. If continued employment is a condition that was agreed to for your employee to earn the applicable bonus, then you don’t have to pay them such a bonus for that pay period.
What if an employee who was subject to a bonus says they were fired without cause?
If an employee alleges they were terminated without proper cause, and a court upholds the allegation, then they may be entitled to a portion of their bonus, in addition to any other applicable penalties. Because of this, employers need to be careful when firing their employees; it’s rarely a good idea to fire an employee instead of granting a bonus they would otherwise be entitled to receive.
As a California Employer or Business Owner, how can I prevent employee lawsuits upon termination?
While terminating an employee is generally allowed so long as their employment is “at-will,” the myriad of procedures that must be followed with regard to termination makes termination somewhat complicated. Ensuring an employee signs the appropriate documents upon their hiring significantly limits their potential to sue their former employer upon termination.
Do you need an employer defense lawyer or still have questions? Our experienced employer attorneys at Rupal Law are here for you!
Rupal Law’s attorneys have experience in helping California employers navigate this, and similar processes, to help prevent termination lawsuits. For an obligation-free consultation or free first case review, call (951) 460-0830 or email info@rupallaw.com.
