How to fire an employee legally (a checklist)

Start with the reason: at-will employment and its limits

Federal law does not make you give a reason for ending someone's job. The U.S. Department of Labor explains that when a termination is not based on discrimination or another protected status, it is governed only by any contract between you and the employee. In an at-will state such as Texas, either side can end the relationship at any time, for any reason that is not illegal, with or without notice. A written contract, an offer letter that promises a fixed term, or a handbook that promises a process can change that, so read them first.

The reason cannot be an illegal one. These are the common federal limits:

• Discrimination: Title VII (race, color, religion, sex, national origin) and the Americans with Disabilities Act (ADA) apply to employers with 15 or more employees. The Age Discrimination in Employment Act (ADEA) protects workers 40 and older at employers with 20 or more employees.
• Retaliation: you cannot punish someone for filing or being a witness in a discrimination complaint, reporting harassment, asking for a disability or religious accommodation, or asking about pay to uncover wage discrimination.
• Family and Medical Leave Act (FMLA) interference: if you are covered, you cannot interfere with FMLA rights or use a request for or use of FMLA leave as a negative factor in discipline or a termination. See how to handle an FMLA request.
• State law often reaches further. California's anti-discrimination law covers employers with 5 or more employees, New York's covers employers of every size, and Texas covers sexual harassment at employers with even one employee.

A good test: if the employee recently complained, took leave, asked for an accommodation, or disclosed a pregnancy or disability, slow down and have a second person review the decision and the timing.

Document the decision before the meeting

1. Write down the business reason in plain facts: what happened, when, and what the expectation was.
2. Collect the record: prior warnings, performance reviews, attendance records, and any improvement plan with dates.
3. Check consistency: have others who did the same thing been treated the same way?
4. Confirm the employee's state of work, because final pay deadlines and notices follow the state where they work.
5. Calculate final pay, including any vacation your state or policy requires you to pay out, so the check is ready on time.
6. Decide whether you will offer severance, and if so, have the agreement drafted before the meeting.

Hold a short, respectful meeting

• Keep it brief and private, with the manager plus one other person (often HR) in the room or on the call.
• State the decision clearly in the first minute. Do not debate it. Give the reason in one or two factual sentences.
• Explain what happens next: final pay, benefits end date, COBRA, return of property, and how to reach you with questions.
• Hand over the documents your state requires on the last day, such as California's change-in-relationship notice and EDD pamphlet.
• Write a short note of what was said right after the meeting and keep it in the personnel file.

Pay final wages on time

Federal law does not require you to hand over the final paycheck immediately, but many states do, and the deadline is often shorter when you fire someone than when they quit. Three common examples:

See final paycheck laws and unused PTO payout for other states, and the state guides for California, New York and Texas.

Health coverage and unemployment notices

• COBRA: if you had 20 or more employees on more than half of your typical business days last year and offer a group health plan, a termination for any reason other than gross misconduct is a qualifying event. You must notify the plan within 30 days, the plan sends the election notice within 14 days of that notice, and the employee has at least 60 days to elect. Coverage after a job loss usually lasts up to 18 months. See when you need to offer COBRA.
• State continuation: smaller employers can still have continuation duties under state law, such as Cal-COBRA in California and state continuation in New York and Texas.
• Unemployment notices: some states require a written notice at separation. California requires the EDD For Your Benefit pamphlet (DE 2320) and a written notice of the change in employment. New York requires a Record of Employment (IA 12.3) and a written termination notice within 5 working days.

Remove access and collect company property

Turn off email, single sign-on, payroll and banking access, code repositories and shared drives at the time of the meeting, not after. Arrange the return of laptops, badges and cards with a prepaid shipping label if the person is remote. Do not hold the final paycheck hostage to the return of property: the Texas Workforce Commission, for example, says it is not legal to hold final pay past the deadline because property was not returned. The employee offboarding checklist covers the full list.

Severance agreements and releases

Severance is not required by the Fair Labor Standards Act. It is a matter of agreement. If you pay severance in exchange for a release of claims and the employee is 40 or older, the Older Workers Benefit Protection Act (OWBPA) sets the rules for a valid age-claim waiver:

• Written so the employee can understand it, and it must name the Age Discrimination in Employment Act.
• It cannot waive claims that arise after signing.
• It must give something of value beyond what the employee is already owed (final wages do not count).
• It must advise the employee in writing to talk to a lawyer.
• At least 21 days to consider it (45 days when two or more people are let go in the same program), and 7 days to revoke after signing. The employee may sign early if the choice is voluntary.

No agreement can stop an employee from filing a charge with the Equal Employment Opportunity Commission (EEOC) or taking part in its investigation. More detail is in severance agreements. For layoffs of many people at once, read WARN Act layoffs.

Common questions

Sources

1. DOL: Termination
2. DOL: Last paycheck
3. DOL: Severance pay
4. EEOC: Retaliation
5. EEOC: Small business information (coverage thresholds)
6. EEOC: Understanding waivers of discrimination claims in severance agreements
7. DOL: Fact Sheet #77B, Protection for individuals under the FMLA
8. DOL EBSA: An employer's guide to group health continuation coverage under COBRA
9. Texas Workforce Commission: Final pay

Last reviewed October 2, 2026. This page is general information, not legal advice. Laws change and exceptions apply, so check the sources above or an employment lawyer before you act on a specific case.

Related

• Employee offboarding checklist→
• When is an employee's final paycheck due? (final pay laws by state)→
• Do you have to pay severance? (and how to write a severance agreement)→
• When do you need to offer COBRA?→
• Do you need to give WARN notice before a layoff?→
• HR laws by company size→