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Reducing The Risks Of Employee Termination: Part 1—Corrective Actions

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We’ve heard it said that most employee termination always comes with risk — but what does that mean?

It means there’s always a risk that a terminated employee could make an issue of the termination, claiming it was discriminatory or based on some other illegal reason. Though there are a handful of illegal reasons for firing someone, in most cases, employers can terminate an employee for any reason or no reason at all.

Regardless of the reason for termination, there is little a business can do to guarantee that an employee won’t call a lawyer or the Department of Labor to claim that their termination was illegal. This is why it is important to keep great documentation and records throughout your termination process. Likewise, this is also why no termination is risk-free.

That said, while you can’t eliminate all risk, you can and should do everything in your power to reduce them. Best practices to follow include having a clear, well-documented reason for corrective actions and terminations, and continuing to maintain professionalism and respect with the departing employee.

If you have a good reason for the termination, and the terminated employee knows you can provide evidence of this reason, they’re much less likely to try to bring a claim against you.

Corrective Action Procedures

Following documented action procedures is one way to ensure a smoother termination with less risk.

Sound company policy for corrective action consists of four steps which are generally administered in progressive order. However, in some cases, the seriousness of the infraction or performance issue may warrant skipping one or more steps in the process.

First Level Warning

The first level warning is a formal method of informing an employee of a relatively minor violation of company or department rules, or of failure to perform job duties in an acceptable manner. Generally, a first-level warning occurs after an employee has received counseling from their supervisor related to the issue(s), and it is intended to encourage the employee to change the behavior.

Second Level Warning

The second level warning is used when performance and/or attendance problems continue or when action more severe than a first-level warning is warranted.

Suspension Without Pay

A suspension without pay of three or more scheduled working days may be issued when performance and/or attendance problems persist, or when the offense is so serious that a first and/or second-level warning is not appropriate. The supervisor should consult with human resources before an employee is suspended.


If all prior disciplinary actions do not resolve the situation, or if the nature of the violation is so serious that a first or second level warning or a suspension is not appropriate, the employee can be subject to termination. The supervisor must consult with the office of human resources before an employee may be terminated.

Multiple Corrective Action Tracks

Performance or behavioral issues are generally treated in one track of corrective action and attendance issues are handled in a separate track. For example, an employee who has been issued a first-level warning for performance or behavior-related issues would receive another, separate first-level warning for an attendance problem that warrants corrective action. If attendance is corrected but the performance continues to be sub-standard, a second-level warning for performance may be warranted.

Length of Time Corrective Action Remains Active

Generally, it is recommended that corrective action be given for a period of two years. Therefore, if there is cause for further corrective action within two years, the next level of corrective action can be taken.

If it has been more than two years, but less than five years, from the last similar corrective action, the same level of corrective action generally should be applied.

If it has been five or more years since the last corrective action, no reference should be made to the previous corrective action. In some cases, the prior record may have been removed from the employee’s personnel file after six months to a year if performance improved. Your company’s Policies & Procedures Manual should state specifically how long a Corrective Action Memo stays on file.

In the next part of this series, you’ll learn the words an employer should use when drafting Corrective Action Memos, and how to plan and conduct a Corrective Action Meeting.