California Employee Termination Checklist: How to Fire an Employee and Follow Termination Laws

California employee termination checklist covers final paychecks, required notices, benefits, WARN rules, and lawful steps for firing employees. Follow California termination laws to reduce legal risks and manage employee dismissals with consistent documentation, payroll, benefits, and access procedures.

By Douglas Wade, Attorney

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Table of Contents

1. Introduction

2. Checklist for Pre-Termination

3. Requirements of Federal Law

4. Requirements of California Termination Laws

5. Last Steps in the Termination Process

Introduction

Companies must have a system in place to terminate employees in a seamless manner. This article will assist employers in adhering to various laws about termination practices. Terminating employees can be quite difficult in the absence of appropriate policies. Legal action may result from improperly carrying out any aspect of the termination procedure, including severance pay and the termination letter. Employers may be able to avoid legal repercussions if their termination procedure is precise and uniform.

Terminating an employee may give rise to a number of legal challenges. Using this guide can help the company avoid potential legal difficulties, even though there is no assurance that an employee won’t file a lawsuit against them. Before making a termination decision, identify any issues and then address them with a lawyer.

Checklist for Pre-Termination

Employers should understand California termination laws before ending an employee’s employment. Examine the employee’s prior performance reviews to determine if any performance concerns have been noted before you meet with them to discuss the termination. To ensure that the worker is not caught off guard by their termination, it should be documented that they have been informed of the manager’s or employer’s concerns.

The employer should get in touch with payroll to arrange for the employee’s last paycheck. It is to be given to them at the moment of termination if they have determined that all other options have been exhausted & they wish to proceed with the termination. You ought to take precautions to safeguard your company before firing an employee.

Establish & Put into Practice Specific Company Policies: Clearly state in job postings, interviews, & the manual for staff that you constitute an at-will employer. A worker may be fired with or without reason.
Exhaust Every Other Option: Have you attempted to give the employee feedback & coach them? Have you given the worker a plan to improve their performance so they can succeed? Have you given your staff the resources & instruction they need to do their jobs?
Discrimination is strictly banned: Maintain uniformity in all situations. If you are firing an employee for a single reason, that ought to be the norm for every employee. Record the justification for the dismissal and any prior instances that were discussed with the worker before the decision to fire was made.

In California, terminations are difficult. To reduce litigation, employers need to have a thorough procedure.

Requirements of Federal Law

1. Election Notice for the Consolidated Omnibus Budget Reconciliation Act

It is applicable in cases like job loss or a decrease in hours worked. COBRA election notifications give employees and their families an opportunity to temporarily keep their employer-funded health insurance. A COBRA notice must be given to employees who are enrolled in the employer’s group health insurance program and to any dependents of the terminating employee on the day prior to the employee’s termination date for companies with at least twenty workers.

2. Notifications of WARN (Worker Adjustment and Retraining)

Employers with more than 100 full-time workers or 100 part-time and full-time employees who put in a minimum of 4,000 hours per week are subject to the WARN Act. The WARN Act’s goal is to provide employees enough time to get ready to move from their existing employment to new ones. The WARN Act mandates that a covered company provide affected workers with at least sixty days’ written notice before implementing a mass termination or closing a factory.

Any appropriate delivery method that guarantees receipt of a written notice no later than sixty days before the separation may be used by the employer. However, verbal notices and preprinted notices delivered in each employee’s paycheck or salary envelope do not comply with WARN Act regulations.

3. Notification of Retirement Benefits

The IRS mandates that companies that have retirement benefit programs for their workers notify former workers of their rights to a pension plan within a period of 90 to 180 days of the termination of their employment relationship. Employees must get specific written details about the retirement plan from plan administrators.

A participant’s right to postpone obtaining their current account balance & the repercussions of withdrawing funds from a retirement plan now rather than later must be explained in the notice. Participants who are no longer employed should receive materials that provide them with sufficient information to comprehend their benefits and how to access them.

Requirements of California Termination Laws

1. Notification of Relationship Change to Employee

Employers must follow California termination laws when dismissing employees. In compliance with California Unemployment Insurance Code Section 1089, employers must either write their own letter containing the same information or give a Notice to Worker as to Change in Relationship when an employee is fired or laid off. When a staff member leaves the company, resigns of their own volition, or changes positions, they are not compelled to give this notice.

2. Final Paychecks

California termination laws provide important guidelines for employers handling employee dismissals. The employer is required to pay all outstanding wages when a staff member is let go. Ensure that earned commissions, bonuses, & accrued vacation compensation are included in final salaries.

The company has a maximum of 72 hours (or three days) from the date of the employee’s resignation to pay the final earnings if the employee leaves with less than 72 hours’ notice. Employers may be subject to “waiting time” fines, which are equal to the employee’s regular earnings for each day (which can be up to 30 days) following the final payment being due, if they fail to deliver it on time.

For instance, I told my previous employer 7 days prior that I was resigning on Friday, but I didn’t get my final payment on that day. My former employer notified me the following Monday that my last paycheck had been made available and said I might come and pick it up. However, I deliberately delayed picking up my check until ten days later, or thirteen days after I quit.

I am only eligible for three days’ worth of pay as a waiting time penalty. In this case, the employer is required to pay all of the unpaid earnings at the time of my resignation because I gave them at least 72 hours’ notice that I was leaving and on the date I stated I would.

Note: No deductions are made from the penalty amount because the waiting time fine is not wages.

3. Notification of Available Coverage

All qualified workers must receive a summary of coverage or a comparable description of all benefits offered under employer-provided health coverage from their employers, whether they are public or private. This includes, but isn’t restricted to, information about health maintenance companies and chosen provider organizations.

Employers are required to “notify employees, upon dismissal, of any continuation, disability extension, and conversion options available under any employer-provided coverage for which the worker may remain qualified after work terminates.” (California Labor Code Section 2808).

4. A pamphlet about California’s unemployment programs

By the date of departure, employers are required to give leaving employees a printed version of the pamphlet: For Your Benefit: California’s Programs for the Unemployed. It contains information regarding unemployment benefits.

5. Cal-COBRA Continuation Rights Notice

A California law known as Cal-COBRA allows you to maintain your group health coverage provider in the event that your employment expires or your working hours are reduced. Those who have used up all of their Federal COBRA might also be eligible. Employers are required to inform leaving workers of their Cal-COBRA continuing rights if they have health insurance through the workplace. Both terminated workers of large businesses (20 or more workers) and small companies (two to nineteen employees) must be offered Cal-COBRA.

6. Notice of Health Insurance Premium Payment (HIPP)

The HIPP plan is an elective Medi-Cal premium refund program run by the California Department of Health Care Services. You may be entitled to reimbursement for your current private insurance payment and cost-sharing if you just lost employment and are qualified for Medi-Cal coverage, or if you are the legal guardian or parent of a person who is. A copy of the form must be sent to qualified staff members covered by the HIPP program by employers with twenty or more workers.

7. Notification of Worker Adjustment & Retraining (WARN) in California

Businesses that hired 75 or more full-time and part-time employees during the previous 12 months are subject to the California WARN Act (including employees who were employed for a minimum of six of the previous 12 months). In California, employers are required to distribute notices to impacted workers, send the WARN notice via email to eddwarnnotice@edd.ca.gov, and notify other designated state agencies & officials.

Related for Union Employees: What Are Weingarten Rights?

Last Steps in the Termination Process

When it comes to departing staff, employers should generally adhere to the following procedures:

1. Ensure that the worker returns corporate property. They include employee IDs, keycards, & keys. You ought to make sure to close or cancel any debit or credit cards they may have had.

2. Limit a former employee’s ability to access workplace email accounts via mobile devices. Make sure the employee is unable to access sensitive company data, whether it is electronically or physically held.

3. Tell the personnel who need to know about the termination briefly. Managers and Human Resources may be informed of the grounds for the termination. The causes should be addressed discreetly and with compassion. They shouldn’t be disclosed to the entire organization. Your business may face more serious issues if you share too many details.

4. Notify IT of the precise day and time that the employee’s access should be removed once you part ways with them. Disable keycards and passwords, and block all entry into the building and system.

5. Payroll, records, HR software, and any other necessary paperwork pertaining to the termination should all be updated. For a minimum of four years, retain payroll and tax records, as well as any documents that provide grounds for termination.

6. Think about finishing a termination meeting and/or departure interview.

7. The termination letter should contain a few elements:

Name of employee
Position of employee
Name of the company
The manager in charge of the dismissal
Termination date
Justification for the dismissal
A list of the cautions issued
List of things that must be returned before departing
Information regarding final compensation and extra benefits

Although handling terminations is never enjoyable for managers or employers, a consistent and legal procedure can facilitate a more seamless transition.

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California Employee Termination Checklist: How to Fire an Employee and Follow Termination Laws

Introduction

Checklist for Pre-Termination

Requirements of Federal Law

Requirements of California Termination Laws

Last Steps in the Termination Process

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