How to Legally Handle Employee Terminations in California

Employee Termination Meeting in California

Learn how to handle employee terminations in California legally and professionally.

May 9, 2024

Terminating employees in California requires following specific legal procedures to minimize risks of wrongful termination lawsuits.

Proper documentation, clear communication, and consistent application of company policies are essential.

But employers must also navigate unique California regulations relating to final pay, COBRA notices, and employment references.

1. Establish Clear Termination Policies

    • At-Will Employment: California allows at-will terminations without cause. 
    • Progressive Discipline: Implement corrective action procedures consistently.
    • Performance Documentation: Maintain records of evaluations and improvement plans.
    • Protected Classes: Prohibit discrimination based on age, race, gender etc.
    • Employment Contracts: Abide by any specific terms governing terminations.


    • ABC Co. fired Joe for cause after 3 written warnings about tardiness.
    • XYZ Inc. followed its handbook outlining the progressive discipline process.
    • 123 LLC kept detailed records of Susan’s quarterly performance reviews.
    • Acme avoided age discrimination by treating all workers consistently.
    • Tech Startup honored the executive’s employment contract terms.

How to Proceed:

    • Draft an employee handbook detailing grounds for termination.
    • Apply disciplinary actions uniformly regardless of demographics.
    • Train managers to maintain consistent, objective records.
    • Have legal counsel review any employment agreements.
    • Communicate standards clearly during onboarding and evaluations.


    • Is progressive discipline required by law? No, but it helps justify terminations.
    • What are illegal reasons to fire someone? Discrimination, whistleblowing, taking protected leave.
    • Can an at-will employee be fired without notice? Yes, but contracts may require it.
    • How long should disciplinary records be kept? At least 4 years after termination.
    • Can I fire someone for poor performance? Yes, if properly documented.

2. Handle the Termination Meeting Properly

    • In-Person Discussion: Meet privately with HR present to limit miscommunication.
    • Clear Explanation: Succinctly state the reasons and effective date.
    • Employee Response: Allow the worker to provide feedback or ask questions.
    • Transition Details: Cover benefits, final pay, and reference policies.
    • Remain Professional: Stay calm, avoid arguments, and keep it brief.


    • Jake’s manager and HR rep met with him face-to-face to discuss the decision.
    • They informed Anna her position was being eliminated due to budget cuts.
    • HR sought input from Tom on what led to his performance issues.
    • Sara appreciated the guidance on rolling over her 401k after termination.
    • Despite Jeff’s frustration, his boss remained composed and courteous.

How to Proceed:

    • Choose a private location to meet, ideally at the end of a workday.
    • Be direct in your language, avoiding excessive detail or blame.
    • Let them respond, but don’t engage in an extensive debate.
    • Provide a termination letter with key information and transition next steps.
    • Remain empathetic but firm in your tone and demeanor.


    • Can I fire someone over the phone? Not recommended except for remote workers.
    • Should multiple people attend the meeting? Yes, to serve as witnesses.
    • What if the employee becomes threatening? End the meeting and contact security.
    • Do I have to tell them the reason for termination? No, but it shows good faith.
    • Should I apologize for firing them? Express empathy without undermining the decision.

3. Provide Final Pay According to Law

    • Prompt Payment: Issue final wages and accrued PTO immediately upon termination.
    • Timing Requirements: Pay no later than the last day, with some exceptions.
    • Unused Vacation: Compensate for earned but unused vacation days.
    • Deduction Restrictions: Don’t reduce pay for unreturned equipment without consent.
    • Waiting Time Penalties: Risk claims up to 30 days’ wages for late payments.


    • Jane picked up her final paycheck when she returned her office keys.
    • Bob’s wages were deposited within 72 hours since he quit without notice.
    • Linda received 2 weeks of PTO pay along with her final hourly wages.
    • Rick agreed in writing to deduct $150 from his last check for a lost laptop.
    • Slow processing exposed NewCo to 22 days of waiting time penalty risk.

How to Proceed:

    • Prioritize issuing the final paycheck at the termination meeting.
    • If they quit without notice, mail payment within 72 hours.
    • Calculate accrued vacation/PTO based on company policies.
    • Obtain written authorization for deducting any disputed amounts.
    • If you can’t issue payment immediately, do so as soon as possible to limit liability.


    • Do final pay rules apply to all employees? Yes, including part-time and temporary.
    • Can I mail the final paycheck? Only if the employee quits without 72 hours’ notice.
    • What if there’s a dispute over final wages? Pay undisputed portion, resolve rest separately.
    • Are sick leave balances due at termination? No, only vested vacation or PTO.
    • Does final pay affect unemployment claims? No, it’s a separate process.

4. Tie Up Remaining Loose Ends

    • Terminate Benefits: Notify providers to cancel health insurance at month’s end.
    • COBRA Notification: Provide continuation coverage election notices within 44 days.
    • Collect Property: Retrieve keys, badges, devices and other company belongings.
    • Revoke Access: Disable passwords, keycards and remove from email lists.
    • Reassign Duties: Transition clients and responsibilities quickly to other staff.


    • HR emailed insurance carriers to end coverage for termed employees.
    • Admins had COBRA packets ready to distribute at exit interviews.
    • Managers inspected returned laptops and phones before the worker left.
    • IT systematically shut off system permissions to protect data.
    • The sales manager divided up Jon’s accounts among remaining reps.

How to Proceed:

    • Sync with benefits providers to smoothly end coverages.
    • Partner with COBRA administrators to satisfy notice requirements.
    • Maintain a checklist of items issued to employees for easy reference.
    • Create an offboarding protocol with IT to swiftly close access gaps.
    • Cross-train teams to enable quick reallocation of job duties.


    • What happens to health FSA balances? Access ceases unless they elect COBRA.
    • Are life insurance policies portable? Sometimes, if converted within 31 days.
    • Can I refuse to return personal items? No, but set clear retrieval deadlines.
    • When should systems access end? Immediately, with some narrow exceptions.
    • How long should I keep their email active? Forward to a supervisor and delete.


Terminating California employees requires balancing empathy with protecting the company legally.

By crafting clear policies, handling meetings sensitively, providing proper final pay, and smoothly transitioning their duties, employers reduce their liability exposure.

HR professionals conducting a termination meeting in an office setting

But it’s also critical to properly notify benefits providers, secure company property and data access, and maintain documentation should disputes arise later.


Employee terminations are an unfortunate reality in the business world. But in employee-friendly states like California, any missteps can lead to costly legal consequences.

By understanding and deliberately planning for the state’s unique final pay, notice, and anti-discrimination requirements, employers can execute separations more confidently.

The keys are clear upfront policies, attentive documentation, timely post-termination logistics, and consistently treating departing workers with respect and professionalism.

While no one enjoys letting staff go, establishing a systematic, compliant offboarding process better insulates the company from wrongful termination risks while preserving everyone’s dignity in a difficult situation.

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Test Your Employee Termination Knowledge

      • 1. California is an at-will employment state. What does this mean?
        A) Employees can be fired without notice
        B) Employees can be fired for any legal reason
        C) Employees can quit without giving a reason
        D) All of the above
      • 2. What are the only illegal reasons for firing someone?
        A) Poor job performance
        B) Company layoffs
        C) Discrimination based on protected characteristics
        D) Personality conflicts
      • 3. When must an employee’s final wages be paid in California if they are fired?
        A) Immediately upon termination
        B) Within 72 hours of their last day
        C) By the next regular payday
        D) Within 30 days of separation
      • 4. Which of these must be paid out at termination in California?
        A) Accrued vacation time
        B) Accrued sick leave
        C) Accrued PTO (if vacation and sick leave are combined)
        D) Both A and C
      • 5. An employee gives two weeks’ notice of their resignation. When is their final pay due?
        A) On their last day of work
        B) Within 72 hours of their last day
        C) By the next regular payday
        D) Within 30 days of their last day
      • 6. Can you withhold a terminated employee’s final wages if they fail to return company equipment?
        A) Yes, to cover the replacement cost
        B) Only if they agree to it in writing
        C) Yes, but it must be a reasonable amount
        D) No, final wages can’t be withheld
      • 7. How long does an employer have to provide COBRA election notices after termination?
        A) Within 14 days
        B) Within 30 days
        C) Within 44 days
        D) Within 60 days
      • 8. When should a terminated employee’s access to company systems be revoked?
        A) Immediately upon termination
        B) At the end of the day
        C) Within a week of their last day
        D) After they cash their final paycheck
      • 9. You fire an employee but don’t give them their final paycheck on their last day. What is your potential “waiting time penalty” under California law?
        A) The employee’s daily wages for up to 30 days
        B) A fixed $500 penalty
        C) 10% of the amount of wages owed
        D) No penalties apply as long as you mail the check
      • 10. Which of these should you NOT say in a termination meeting?
        A) The specific reason(s) for the termination
        B) When their final paycheck and benefits will be handled
        C) That they are an awful employee and everyone hates them
        D) Whom they should contact with follow-up questions

    • Answers:
        • 1: D) All of the above
        • 2: C) Discrimination based on protected characteristics
        • 3: A) Immediately upon termination
        • 4: D) Both A and C
        • 5: A) On their last day of work
        • 6: B) Only if they agree to it in writing
        • 7: C) Within 44 days
        • 8: A) Immediately upon termination
        • 9: A) The employee’s daily wages for up to 30 days
        • 10: C) That they are an awful employee and everyone hates them

Disclaimer: The information provided in this article is for general informational purposes only. It should not be considered legal advice. The laws governing employee terminations are complex and fact-specific. Always consult with qualified legal counsel to understand your rights and obligations as an employer when terminating employees, as circumstances may vary depending on your situation. The author and publisher expressly disclaim any liability, loss, or risk incurred as a result of the use, misuse, or reliance upon the information contained herein.

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