The Executive Suite: How to fire an employee

The hardest part of running a solo private practice for the past 15 years is being an employer, says OB/GYN Donna Ivery, MD, of Titusville, Fla. “I find it particularly stressful because the behavior and competence of your staff can make or break your practice,” she says.

Ivery says that during her career she has fired four employees, but has had more than 30 come and go. Some employees made it easy on her to let go: “I’ve had them sneak out the back door without saying a word-[not even a] ‘goodbye,’” she says.

No one said firing an employee-particularly a long-term staffer-is pleasant, says Andrew Halley, of Halley Consulting Group, LLC. It’s another one of those subjects that isn’t taught in medical school. However, completing the process while following state and federal laws ensures that a termination does not become a lawsuit that drains precious time and money from a practice.

Go by the book

Compile an employee handbook that details practice policies and includes a termination section. Consider it both great communication and great protection. Before it’s written, get input from an employment attorney. “An hour spent doing that, and then again for a review when you have finished it, can save you thousands of dollars later on,” Halley says.

Make sure each employee receives the handbook and understands it. Ask if they have any questions. Check out basics on handbooks from the National Federation of Independent Business (bit.ly/NFIB-handbook) or a primer from the Medical Group Management Association (bit.ly/MGMA-handbook).

“Lay out employee expectations from the beginning,” says Ivery. “Then there’s no confusion. I was guilty of not doing this in the beginning and it cost me.”

Follow your gut

Ivery adds that if you think a new staff member may not be the right fit long-term, you are likely correct.

“People can’t fake being a good employee,” she says. “If a person is four to five weeks into their 90-day probationary period, and they’re not performing, don’t expect it to get better. Understand you have a problem on your hands and do something about it.”

Remember that an employee cannot file for unemployment benefits unless they have met the requirement for time worked or wages paid, Halley says. Each state has different rules, and as an employer practices are charged a tax to help pay for unemployment insurance (UI).

“Your UI tax rate depends on how many of your former employees qualify for benefits. Your probationary period for new employees should be shorter than the minimum time worked requirement for your state if you want to minimize your UI tax,” Halley advises.

Grade them

Following the theories of organizational psychologist Bradford Smart, Halley reminds practitioners what happens when they drag along “C”- and “D”-grade employees.

“If you fail to terminate poor performers, you drive the ‘A’ and ‘B’ players away,” he says. “They get frustrated, harbor resentments, and leave, because they can find jobs anywhere they want. They are hard to come by, but mediocre employees are a dime a dozen.”

Put the practice first

If an employee starts slacking because “they have non-work obligations” that require more time and attention, that’s not the practice owner’s problem, Halley says. “They had these obligations when you hired them, and it doesn’t matter if you knew that-they still signed on to do a job for you.”

“Ask them to leave their problems at home or in the parking lot,” says Ivery. “If their kids need to go to the dentist, I recommend they do that on an administrative day-when no patient appointments are scheduled-so as not to impact patient care.”

Ivery reminds employees that if she can’t see patients due to low staffing levels, then the practice won’t make money either-and that affects employee salaries.

Understand the limits

Practices with fewer than 15 employees are exempt from some federal employment regulations, Halley says. “Make sure you understand the basic employment laws in your state. Your attorney will help you know if you are considered an ‘at-will’ employer.”

An at-will practice owner can fire anyone for any reason in almost any state, and of course, the employee can quit, he says. Additional federal laws must be considered after 15 workers are hired; specifically, laws dealing with discrimination, harassment, and the Americans with Disabilities Act.

Another threshold occurs at the 20-employee level, where age discrimination laws start to apply, and another at 50 that adds the Family Medical Leave Act and Affordable Care Act, among others.

Don’t surprise them

“I tell my clients that an employee should never be totally surprised they’re being terminated,” says Halley. “A good employer provides effective feedback to employees along the way, regardless of the number in the practice.”

This can be done with a performance improvement plan, so the employee fully understands what is expected of him or her, he says. “They should already know what the deficits are, and whether they are meeting the expectations that have been set for improvement when they’re brought in for a termination discussion.”

Have a witness

Never fire an employee without a witness. “We have a litigious society, and an employer should also never broadcast-on social media or otherwise-why they terminate an employee,” Halley says.

“Remember, anything you say can be used against you,” he adds. “However unfair it may seem, the former employee gets to say whatever they want, but we should never retaliate or air our complaints about the former employee.”

A witness to the termination will make notes about the exchange and remains a credible back-up in case the terminated employee sues.

Don’t phone it in

Halley says that as a matter of ethics, he advises never terminating an employee over the phone if it can be avoided.

“It’s just bad form. Besides you’re better off face-to-face so you can have that witness,” he says.