Letting Employees Go

[Fit Small Business | ]( HR Insights from Our Experts [letting employees go]( Headlines are swarming with talk of huge impending layoffs in the tech industry, mostly from large corporations like Amazon and Meta. But some smaller employers are also concerned. Although businesses have ramped up recruiting efforts overall since the end of the pandemic, in an uncertain economy, it’s always important to be prepared to take whatever action you need to keep company operations flowing smoothly. Sometimes that means implementing layoffs, and other times that might mean terminating problematic employees. Let’s talk about it! (TLTR) Too long to read? If you’re pressed for time, just check out these articles: [Furlough vs Layoffs]( [Involuntary Termination]( [Top Fireable Offenses]( [Offboarding Steps]( [How to Fire an Employee]( [Termination Letter and Template]( [Best HR Software](   [Image of employee with head on the table]( Be Intentional About the Employees You Bring into the New Year   With five weeks remaining in 2022, it’s a good time to reflect on what went well during the year and what needs to be improved. If you have any employees who have been dragging along and not pulling their weight, it may be time to consider letting them go. Recent data from the Bureau of Labor Statistics shows very little change in the [number of employees who are quitting]( their jobs, although there’s been an increase in the number of job openings. When employees opt not to leave their jobs but refuse to improve their performance, they become a problem. Not only do they require more time to manage, but their work tends to be subpar, which negatively impacts the bottom line. Key points to start reviewing before the holidays are: - Disciplinary reports for the year - Attendance records - Recent performance reviews - Work output/production level Take time to review all points for each of your employees (or work with their managers) and be sure you have the best talent on the team going into the new year. 📌 Check out our step-by-step guide on [how to fire an employee](.   [Image of zoom meeting]( Remote Employees Who Refuse to Return to the Office   With the end of the pandemic, some companies have been rolling back certain precautions put into place to stop the virus’s spread, one being allowing employees to work remotely. One study shows that 45% of employers claim productivity decreased when employees worked remotely vs in-office prior to the pandemic, and 4 in 10 are [willing to fire workers]( who won’t return on-site. Unfortunately, many employees who have been working from home are not ready to return to the office. Since [at-will employment]( governs most of the U.S., employers have the upper hand. That doesn’t mean that firing 75% of your workforce would be a good idea though. To avoid unnecessary terminations, there are a few things you can do: - Consider purchasing [employee monitoring software]( so it’s easy to stay abreast of what your remote employees are doing. - Focus on [keeping remote employees engaged](, i.e., cover costs for their home office setup, use software designed to keep employees connected, etc. - Offer pay increases for folks willing to return to the office; you could even choose to pay for commuting expenses if that’s a major factor in your area. If the pandemic led to your first experience with having remote employees, it’s normal to be a little nervous about whether it’s really best for your business. It’s a good idea to consider [trends and statistics around remote work]( as they can provide insight that can help you determine your next move, even if that means terminating workers who refuse to return to work. [Image of employees carrying boxes]( Stay Prepared for & Work to Prevent Future Job Cuts, Layoffs   Noone likes to talk about layoffs, but as an employer, it’s important to have a solid understanding of what they mean and how to determine if you need to make them so you can act swiftly in the event they become necessary. If your fiscal year ends on 12/31, you’ll be reviewing your final 2022 business financial results soon. We recommend the following: - Check that your payroll expenses don’t exceed 15%-30% of your revenue, on average, although it can be up to 50% if your company is in the service industry. - Total the amount of overtime you’re paying out & find ways to decrease or eliminate it. - Put together a plan to start cross-training your employees at the beginning of the year, so their skillset is stronger, making them eligible for other positions in the company if their current job is ever eliminated. 📌 If you ever determine you need to lay off employees, consider sending them on furlough first. It’s a temporary layoff designed to help businesses lower payroll costs while giving employees security that they will have a job waiting on them when it’s over. Check out our [guide on furlough vs layoffs]( to learn the differences. [Image of keyboard with button that says 'follow the rules']( Payroll Compliance and Tax Reminders   One part of HR that comes across as more of a necessary evil is payroll compliance. It may not be your favorite thing to read about, but it can keep you out of hot water. Here are some important upcoming dates you may need to know: - Any employee who has experienced a change in their personal or financial situations may need to complete a new [Form W-4]( to include a greater withholding. There’s no specific due date for this–ideally shortly after the change occurs. - Make any payroll tax payments for prior weeks that have not yet been paid; if you’re a semiweekly depositor, you should deposit taxes withheld from payroll payments as follows: - FICA and income taxes withheld from paychecks distributed on November 16. 17, and 18 should be deposited by November 23. - FICA and income taxes withheld from paychecks distributed on November 19, 20, 21, and 22 should be deposited by November 28. - FICA and income taxes withheld from paychecks distributed on November 23, 24, and 25 should be deposited by November 30. If you’re a monthly depositor, you’ll need to wait until after your last November pay day to deposit all FICA and income taxes withheld during the month by December 15. 📌 Learn more about FICA taxes plus [how to calculate the FICA payment]( you need to report and pay to the IRS.   HR Payroll Software & Services Spotlight [Image of woman in front of a computer monitor]( Whether you’re hiring or firing an employee, good HR software can make a difference in how efficient the process goes. [Rippling]( is a top HR software we recommend that’s multifaceted in its approach to serving the needs of small businesses. The way the software is designed makes it easy to give new employees access to any apps and systems they need to do their jobs; it also makes it just as easy to turn the access off with the click of a button when they are no longer active employees. The company will also load and ship laptops to you for new employees. Professional employer organizations (PEOs) are also solid HR service providers. When it comes to hiring and firing employees, there are certain legalities you need to be aware of. And a PEO can help you with that by reviewing internal policies, representing you if an employee takes you to court over a human resources issue, etc. Rippling also has a PEO that you can switch on and off with the click of a button, meaning you can sign up to solely use the software and then upgrade to PEO services when needed without hassle. [Justworks]( is another PEO we highly recommend for small businesses.   What’s Hot In HR Content This Week Here’s some of our latest (and greatest) HR content [Featured Article]( Employee Discipline Tips There are times you’ll find yourself dealing with an employee who chooses not to follow your company policy. Immediate termination may not always be warranted, but you’ll definitely need a solid discipline plan. Our experts share some top employee discipline tips you can use when you’re in this position. [Get the Tips]( [Template of the week]( Most companies find themselves needing to let an employee go at one point or another. The process doesn’t have to be cumbersome. Keep good records that support your decision and notify the employee in a timely manner. It’s a good idea to communicate the news face to face when possible (you can use Zoom or other video conferencing software if you’re remote). Also, mail a letter to make it even more official. [Compliance illustration]( [Download the Templates](   Our Expert’s Advice on Terminating Employees   [Charlette Beasley, HR and Payroll Software Expert]( “The new year always seems to bring many changes, and businesses aren’t immune. When parting ways with any employee, HR will have numerous tasks to check off to ensure compliance. One that’s sometimes forgotten is the due date of the employee’s last paycheck. Different states have different rules that govern how soon you’re required to send it out after the employment relationship is terminated–some require next-day payments (this is when a [free paycheck generator]( or quick payroll processor, i.e., [QuickBooks Payroll](, comes in handy). Other states allow you to pay as late as the next payroll date. It’s important to verify the law in the state in which you’re paying the employee, especially if they’re disgruntled, so you can avoid costly lawsuits." -Charlette Beasley, HR and Payroll Software Expert   December is right around the corner, so you may be rushing to complete your Q4 goals as well as ideating on some new goals for 2023. Even if you haven’t considered letting go of any of your workers, this is a good time to assess the value they bring to your company. Going into the new year with your eyes wide open and a reliable team will help you set a clear vision for next year that is attainable. Best wishes, Charlette Beasley   For more quality resources on growing your small business: [Marketing]( | [Financing]( | [Accounting]( | [HR]( | [Retail]( | [Ecommerce]( | [Sales]( [Facebook]( [Twitter]( [LinkedIn]( [Alternate text] Want to change what you receive in your inbox? [Update Your Preferences]( [Image]   We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Our business model allows us to bring you the best answers to your questions, without editorial biases or cluttering the site with banner ads that everyone hates. The solutions we recommend to business owners often include products and services. 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