What to Know Before Terminating an Employee with Benefits

In the majority of U.S. states, employees are employed at will, meaning that they can be terminated at any given time. But just because they can be terminated at any time doesn’t mean that it’s that simple. Employees have rights, and it’s imperative to be aware of them before going through the termination process, particularly if you are providing these employees with certain benefits.

There’s going to be severance packages involved and you want to ensure that you’re making the most out of your company process and going about it in a way that will not invite any lawsuits or claims. If proper procedures are not followed, then the termination of an employee can come back to haunt you. It’s important to make sure that all of your bases are covered when embarking on this difficult process. Here’s what to know before terminating an employee with benefits, courtesy of The Globe and Mail.

Know How Long an Employee is Covered After They Leave

When thinking about a severance package, you have to also address how long that employee is going to be covered after they are terminated. It’s good to make it clear how long that employee will still be covered underneath your business. Don’t think that it all comes down to just being covered for one week of notice for every year of employment. It’s a common misconception to meet the bare minimum with a package. When terminating an employee, make sure that your insurance company is aware in advance of the termination. It’s also important to note that if your benefits package includes long-term disability coverage, your insurance provider might not give that to you in your severance package.

Keep Common-Law Notice in Mind

When it comes to common-law notice, the one week requirement is often overridden. Things come into play with an employees benefits, including age, position and length of service. If you happen to cancel someone’s coverage too soon, then your company could be held liable for it.

Employees Should Sign Waivers

Having employees sign a waiver as a part of their termination process can help reduce the liability of a company. It’s one of the best ways to ensure that a company isn’t going to be responsible for an employee after they’ve been terminated or quit. This waiver helps employees become aware that their health coverage has become a single policy. Ultimately, an employee has the rights to an individual policy after their benefits have been cut.

Besides having a waiver, other ways that a company can keep themselves protected is by making sure than an employee is clearly aware of what their employee benefits are in their initial hiring package. And when you’re at a loss with what to do, contact a lawyer. No matter what you choose to offer through your employee benefits program, having Employee Benefits Liability insurance in place to properly administer your program will ensure that your business is protected through every step of the process.


About World Wide Specialty Programs

For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (800) 245-9653 to speak with one of our representatives.