Most states have at-will employment rules, which allow employers or employees to terminate their relationship. Generally, neither party has to provide a good reason or notice. Federal and state termination requirements create some exceptions and impose other rules on employers that sever the relationship with their employees.
Companies are required to only terminate employees for lawful reasons. State and federal governments have a list of reasons for which employees cannot be fired. For example, companies are not allowed to dismiss an employee based on discriminatory factors such as race, religion or handicap. It is also unlawful dismiss workers for whistleblowing, filing for benefits such as workers compensation or taking medical or military leave.
Some employers are required to provide their former employees with documentation about their termination. For example, in Missouri, a company with more than seven employees must provide a letter of dismissal for a terminated employee who has been with the corporation for at least 90 days if she asks for one. It must state the type of work she did, her tenure and the reason for her dismissal.
The Worker Adjustment and Retraining Notification (WARN) Act is federal law regulating termination due to plant closings and mass layoffs. It outlines the circumstances when companies must provide advance notice to the affected employees and when employers must provide it. Companies that violate WARN Act regulations can be fined up to $500 per day.
Some states outline rules for issuing the final pay of terminated employees. In California, for example, if a person is discharged, all of her outstanding wages and accrued vacation must be paid at the time of termination. If the termination is due to the ending of seasonal employment in certain food processing industries, then a California employee has 72 hours to make the final payment, and it must be sent by mail if the employee requests.
Laws also impose various reporting requirements on companies that terminate employees. In Missouri, if a worker is subject to withholding by the Family Support Division, Child Support Enforcement a company must report her termination and her last known address within 10 days. The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires certain employers to provide continuation of group health insurance and to notify the terminated employee of the availability of the coverage.
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