Small business owners encounter many legal issues before and after starting their business. One of most stressful legal issues a new business owner may face is how they will deal with a troublesome employee. Job-related lawsuits have risen sharply over the past fifteen years, causing financial devastation for business owners nation wide. Most lawsuits are covered by a business owner's standard business insurance policy. Unfortunately, business insurance does not protect a business owner from being sued by his or her employees.
Employees in the United States have state and federal laws that protect them from being unjustly fired by their employer. There are five smart things new business owners can do to prepare themselves against being sued by an employee that they have to let go.
1. Prepare an Employee Handbook
Using an up to date employee handbook to train your employees not only lets them know what behaviors you expect from them up front but also helps you establish grounds for terminating an employee later on if they do not follow the standards of conduct that you have set forth for your staff.
2. Adopt a Progressive Discipline Policy
Another way to protect yourself against a lawsuit where an employee accuses you of unfair termination charges is to implement and consistently follow a progressive discipline policy. A progressive discipline policy works like this: Each time an employee breaks a rule the employer gives the employee a more serious consequence. Usually employers give out verbal warnings first and then progress to written warnings, then suspensions, and finally termination. This discipline policy not only gives the employer a paper trail of proof relating to the employees wrong doings over time but also allows the employee plenty of time to realize their need for improvement before being terminated.
3. Use Prudence When Breaking the Bad News
It is wise to have a witness present at termination meetings. For example if the store manager has the job of breaking the bad news of termination to the employee, the store owner should attend the meeting and answer any questions the employee may have. When actually delivering the news of termination to the employee stick to the facts, avoid making rude comments or blanket statements, relay only the well-documented, job-related infractions that led to the termination.
Closing arguments: Hopefully you are surrounded by a group of top-notch, hard-working employees that are making your business thrive. To prepare yourself for facing the unpleasant task of terminating an employee just remember the three "P"s. First, prepare an employee handbook and use it frequently in training your employees. Second, implement a progressive discipline policy and document everything. Third, use prudence when telling an employee about your intention to terminate them. Be polite and always have a witness with you. Finally, make sure you have the proper insurance coverage for your business and you will feel cool even when you have to fire.
Employees in the United States have state and federal laws that protect them from being unjustly fired by their employer. There are five smart things new business owners can do to prepare themselves against being sued by an employee that they have to let go.
1. Prepare an Employee Handbook
Using an up to date employee handbook to train your employees not only lets them know what behaviors you expect from them up front but also helps you establish grounds for terminating an employee later on if they do not follow the standards of conduct that you have set forth for your staff.
2. Adopt a Progressive Discipline Policy
Another way to protect yourself against a lawsuit where an employee accuses you of unfair termination charges is to implement and consistently follow a progressive discipline policy. A progressive discipline policy works like this: Each time an employee breaks a rule the employer gives the employee a more serious consequence. Usually employers give out verbal warnings first and then progress to written warnings, then suspensions, and finally termination. This discipline policy not only gives the employer a paper trail of proof relating to the employees wrong doings over time but also allows the employee plenty of time to realize their need for improvement before being terminated.
3. Use Prudence When Breaking the Bad News
It is wise to have a witness present at termination meetings. For example if the store manager has the job of breaking the bad news of termination to the employee, the store owner should attend the meeting and answer any questions the employee may have. When actually delivering the news of termination to the employee stick to the facts, avoid making rude comments or blanket statements, relay only the well-documented, job-related infractions that led to the termination.
Closing arguments: Hopefully you are surrounded by a group of top-notch, hard-working employees that are making your business thrive. To prepare yourself for facing the unpleasant task of terminating an employee just remember the three "P"s. First, prepare an employee handbook and use it frequently in training your employees. Second, implement a progressive discipline policy and document everything. Third, use prudence when telling an employee about your intention to terminate them. Be polite and always have a witness with you. Finally, make sure you have the proper insurance coverage for your business and you will feel cool even when you have to fire.
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