Employee termination is among HR professionals’ most sensitive and legally complex responsibilities. Done incorrectly, it can result in lawsuits, regulatory scrutiny, reputational harm, and loss of employee trust. Conversely, a structured, compliant approach can help organizations mitigate risk, uphold fairness, and maintain continuity.
According to the subject authority Society for Human Resource Management (SHRM), maintaining accurate and detailed records is essential for employers to be able to defend against wrongful termination claims and other employee-related legal challenges.
Shifting labor regulations and evolving workplace expectations will make handling terminations methodically and legally more critical than ever in 2025.
Crucial HR Steps Before Terminating an Employee
Below are seven essential steps HR must follow before ending an employment relationship.
1. Review Relevant Company Policies and Employment Contracts
The first step in any termination process is to conduct a comprehensive review of internal employment documents. This includes examining the employee handbook, any individual employment contract, and collective bargaining agreements if a union represents the employee. These documents typically contain key information on disciplinary procedures, required notice periods, and grounds for termination.
It is also crucial to assess the legal classification of the employment relationship. Most employees in the United States are employed “at-will,” meaning they can be lawfully terminated at any time with or without cause.
However, exceptions apply—such as those governed by contract law, public policy exceptions, and collective bargaining protections. For example, California Labor Code § 2922 establishes at-will employment but recognizes exceptions where implied contracts or public policy violations are present.
Finally, cross-reference the internal policies against current federal and state labor laws to ensure thorough compliance and consistency.
2. Gather and Verify Comprehensive Documentation
To build a legally defensible case for termination, HR must compile a detailed and objective record that supports the decision. This involves collecting performance evaluations, attendance records, records of any disciplinary warnings, and written notes from coaching or counseling sessions. If misconduct is involved, the documentation should include detailed incident reports, signed witness statements, and relevant digital records with accurate timestamps.
The goal is to demonstrate that the company’s policies were applied consistently and fairly. For instance, if an employee is being terminated for violating a workplace rule, documentation should show that other employees who committed similar infractions were subject to the same consequences. Inconsistencies in enforcement can expose the organization to discrimination claims under Title VII or similar statutes.
3. Consult Legal Counsel for Risk Assessment
Given the complexity and variability of employment law, consulting with legal counsel before terminating an employee is essential—especially when protected characteristics or recent complaints might be at issue. Legal review ensures that the grounds for termination do not violate any federal or state protections, including those under the Americans with Disabilities Act or ADA, the FMLA or Family and Medical Leave Act, Title VII of the United States Civil Rights Act, or the United States Age Discrimination in Employment Act (ADEA).
In particularly sensitive or high-risk situations—such as when an employee has filed recent complaints, requested accommodations, or belongs to a legally protected class—HR professionals should seek advice from experienced employment law firms, such as Kessler Matura in New York, to ensure compliance with US federal and state anti-discrimination laws. These firms can help assess exposure to wrongful termination or retaliation claims, audit documentation, and provide strategic recommendations before final action.
4. Consider Alternatives to Termination
Before proceeding with termination, HR should consider whether the issue can be resolved through less severe means. In situations involving performance rather than serious misconduct, alternatives may include implementing a formal Performance Improvement Plan (PIP), targeted coaching, reassignment to another role, or mediation to address interpersonal conflicts.
Offering these options demonstrates fairness and strengthens the employer’s legal position by showing that the employee was given an opportunity to improve. SHRM notes that employers are generally advised to document all such efforts, including timelines, expectations, and outcomes, to show that termination was a final and necessary step.
5. Ensure Final Paycheck Compliance
After deciding to terminate employment, HR must ensure that the employee’s final paycheck is timely and accurate. Final pay requirements differ across states. For example, California mandates that final wages be paid immediately upon termination, while other states may have different requirements.
The final paycheck must include all the employee’s earned wages through the termination date and any remaining accrued but unused paid time off (PTO) if state law requires such payout. Bonuses, commissions, and reimbursement for work-related expenses must be included where applicable. HR should review each state’s regulations using trusted resources such as the U.S. Department of Labor’s state law database to ensure compliance.
6. Plan the Termination Meeting Logistically and Legally
How the termination meeting is handled can influence the departing employee’s reaction and the risk of legal action. The meeting should be conducted privately and respectfully, ideally with the employee’s direct supervisor and an HR representative present. Scheduling the meeting during non-peak hours helps maintain discretion and security.
Before the meeting, HR should prepare all necessary documents, including the termination letter, the final paycheck (if immediate delivery is required), COBRA continuation information, and a checklist for returning company property. To protect confidential information, IT access should be disabled in coordination with security at the time of termination.
SHRM recommends keeping the conversation short, factual, and compassionate. Avoid debating the decision or introducing subjective commentary.
7. Prepare Severance Agreements and Post-Termination Support
While not universally required, severance packages can be a strategic tool to reduce litigation risk and maintain goodwill. If severance is offered, it is typically contingent upon the employee signing a separation agreement that includes releasing legal claims.
Employers must ensure full compliance with laws such as the OWBPA or Older Workers Benefit Protection Act when terminating employees over 40. The OWBPA requires employers to give employees at least 21 days to review the agreement plus an additional 7 days to revoke their signature after signing.
The agreement should clearly outline the severance amount, continuation of benefits, non-disparagement clauses, and confidentiality obligations. Employers may also offer outplacement support, such as career coaching or resume assistance, enhancing the company’s reputation and helping the employee transition more smoothly.
Protect Your Organization by Leading Terminations with Integrity and Legal Precision
Terminating an employee is never easy, but it is a decision that must be approached with care, empathy, and legal clarity. The cost of skipping steps or relying on outdated policies can be enormous in a landscape marked by rising employment litigation, social accountability, and complex labor laws.
By systematically following the steps outlined—reviewing internal documents, building strong documentation, consulting legal experts, evaluating alternatives, ensuring final pay accuracy, managing the termination meeting properly, and preparing severance plans—HR professionals can safeguard the organization from liability and preserve the dignity of the employee experience.
Equally important, this process reflects a commitment to ethical leadership. Transparent, consistent, and lawful termination practices are not just about compliance—they are about protecting workplace culture, honoring human dignity, and maintaining long-term organizational health.
As labor laws and societal expectations evolve in 2025, proactive planning and legal fluency are no longer optional. HR leaders who prioritize procedural integrity in terminations position their organizations for stability and resilience—while also doing right by the people they employ.
Guest writer
