How to Conduct a Compliant Termination

How to conduct a compliant termination

Hiring a new employee is an exciting process. After all, each new addition to your team brings greater possibilities in terms of your practice — but then it happens. For whatever reason, that hire doesn’t work out

The last thing you want to do is let an employee go, as you worry about the potential backlash. However, it just doesn’t make sense to keep them. 

So, what now? How do you approach a termination without placing your practice at risk? 

The Laws Protecting Employees During Termination Are Strict

Hopefully, issues within your practice never escalate to a lawsuit. 

If they do, research shows that when there is a termination lawsuit, employees often win. One key study looked at 1,700 cases between 1988 and 1995 and found that 64 percent of the time, the employee won suits involving termination. Since then, more laws have come into practice protecting employees, so you need to remain mindful of employee rights — whether you plan on terminating a team member or not.  

If your practice is located in an employment-at-will state, and no employment contract was provided, you can typically terminate any employee for any reason, as long as it’s not the “wrong reason”. Whether you wish to let an employee go due to financial trouble or poor work performance, you may have the right to do so. In this case, termination can generally take place with or without notice, as long as you do not violate any other law. For example, federal laws state prohibit any form of discrimination in employment, including sex, religion, color, race, pregnancy, age, and disability. 

Please note: There are cases that can be rather risky, even if a specific “law” was not violated. If there is no documentation, you may experience a “he said, she said” scenario. To protect yourself, it’s recommended that you speak with an HR specialist or employment attorney to discuss the termination and evaluate your risk, even if it doesn’t go against a specific discrimination law.

All related information should be provided in your employee handbook so that all parties are well-informed. This document should clearly outline all disciplinary policies, offering protection if you were to end up in court. For example, your handbook should state that you will not discriminate. If your employee handbook is in need of some TLC, be sure to check out this 2021 Employee Handbook Update Checklist

A comprehensive HR solution, such as HR for Health, can assist you with this step.

Please note: To address any immediate concerns or discuss your unique circumstances, it’s best to contact the U.S. Equal Employment Opportunity Commission (EEOC) or your State Labor Office

How to conduct a compliant termination

It All Begins with a Termination Meeting

Termination is never easy, but if it must be done, it needs to be done right. 

If you plan on terminating an employee, you should do so in a professional manner. 

Although we’re living in a digital age, a text or email just won’t cut it. That means you need to set up a meeting to terminate that individual face-to-face. If you have an office manager, it is often best that they handle this order of business. However, if you have a small team, this task will be yours to handle (which is the case in most small practices). 

Recommended Reading: 3 Situations When a Resignation Puts Your Practice at Risk

Prior to the meeting, it’s important to think about what you’ll say. The goal here is to preserve an employee’s dignity and minimize any feelings of humiliation. You also want to minimize any feelings of resentment. After all, negative feelings can bring a wave of negative consequences. 

During your meeting, be sure to:

  • Provide the employee with an adequate, reasonable explanation for your decision, keeping it as concise as possible. It’s not necessary to provide the employee with a long list of reasons why they’re being terminated. This will likely lead to a disgruntled individual and resulting friction. Although this is not always necessary by law, this small step can help you avoid any fallout. In more recent years, courts and labor boards have often sided with terminated employees when termination grounds were unclear. This is also why it’s recommended that you fully document ongoing performance reviews. In the case of poor performance, you have written documentation to support your claim. 


  • If misconduct played a role in your decision, investigate before you terminate. Conduct a documented interview with those involved. At this point, you’ll want to better understand the employee’s interpretation of the events that took place. Allow the employee to express themselves so that you can gauge whether or not they feel they faced harassment or discrimination. If so, now is the time to know about it. Once again, you’ll want to record the context of your meeting so that you have formal documentation if issues arise. 


  • Depending on the situation, discuss their benefits (i.e. health insurance, vacation pay, separation pay, etc.). Federal and state laws are in place that protect terminated employees in regard to continued benefits, including unemployment insurance benefits and vested retirement benefits. 


  • Provide the ex-employee with all necessary termination paperwork based on your state, as well as their final paycheck. Although you are only required to give them what they are owed on their last day of employment, it’s best practice to give them their check in-person and have them sign off that they received it. 

Recommended Reading: How to Identify Job Abandonment & 3 Actions You Can Take

Principal Benefits: Understanding Federal and State Laws 

As mentioned above, terminated employees may be entitled to a number of benefits. 

These include:

  • The continuation of health benefits — Under the law known as COBRA, employers that offer group health plans must offer terminated employees (as well as their spouses and dependent children) the opportunity to continue to receive health insurance. If they agree, these benefits will be made available at the employee’s own cost. However, this law does not apply to employers who have less than 20 employees. If you are operating a small practice, it’s best to check comparable state laws that are not subject to the federal law. 


  • Unemployment insurance benefits — When you terminate an employee, it is your responsibility to notify that individual about their eligibility for unemployment insurance benefits, if applicable in your state. If you do not disclose this information and an eligible employee fails to file a claim on time, you could be sued. In most states, as long as you post state-supplied information in a highly visible area for employees to view, such as the break room, you can typically avoid this obligation.


  • Vested retirement benefits — If you plan to terminate an employee who is about vest with respect to retirement benefits, this can create significant risks. Not only may the employee sue, but the federal government could actually charge you with penalties. 

Do What Is Best for Your Practice 

Each case is unique, so the actions you take will depend on what’s best for your practice. For example, if a medical assistant is rude to your patients and has even started an argument with one individual, it may actually hurt your reputation if you allow that employee to stay. If the patient is willing to provide a written statement, it may be in your best interest to terminate that individual, offering them a black and white reason — “You were aggressive towards our patient this morning and that type of conduct isn’t tolerated here.”

However, it’s important to treat these situations on a case-to-case basis, especially if someone's behavior is out of the norm. For example, if an individual on your team was aggressive, but is typically a great employee, you may want to speak to them about any potential underlying issues. 

In other cases that are less troublesome (i.e. a dental hygienist is ten minutes late the first two days of work because she got lost in the building), simply provide that employee with a written warning. Just explain to them that written warnings are given to employees following such events and that they are now on notice. That way, if he/she continues to be tardy or shows a lack of interest in their position, you have clearly expressed your concerns prior and have given them a fair chance to rectify the issue. If an ex-employee is aware of the issue at hand, they are less likely to file a claim. After all, one of the most common plaintiff claims is, “They never told me what I was doing wrong.”

Final Word

Although you are likely focused on your practice and patients, it’s important to consider all day-to-day operations, especially if any issues arise. Deal with them then and there, taking proactive action whenever possible. HR for Health offers you the tools you need to best manage all of your HR needs with confidence. Learn how you can minimize risks and boost performance — schedule a call today!


Quick note: This is not to be taken as legal or HR advice. Since employment laws change over time and can vary by location and industry, consult a lawyer or HR expert for specific guidance. Learn about HR for Health's HR services.