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December 20, 2023 | BusinessEmployment

How To Legally Terminate an Employee in Michigan

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Author(s)
Jari Wilson

Associate Attorney

Terminating an employee can be a complex process that requires proper compliance with state-specific protocols.  In Michigan, employers need to consider various legal factors to ensure a lawful and fair termination.

Required Steps To Terminate an Employee in Michigan

Before you terminate an employee in Michigan, it is important for employers to adhere to certain steps in order to mitigate legal risks.  The best practices for terminations include requiring employers to clearly communicate expectations, provide feedback, and to document performance issues during the employee’s tenure at the company.  Employers should also keep thorough records of any warnings and performance improvement plans for every employee.  Additionally, employers should review their company policies and employee handbooks annually to ensure that the updated, relevant grounds for termination are included.

When the employee is terminated, the termination meeting should be documented with written notes.  Though not explicitly required by law, it is beneficial to keep records of the termination meeting in case the employee wishes to contest the grounds of their termination.  If there are concerns about navigating the termination process smoothly, an employer should seek legal advice before terminating an employee.

Is Michigan an At-Will State?

Michigan is an at-will employment state, meaning that unless an employment or collective bargaining agreement says otherwise, Michigan employers can terminate employees without prior notice and for any legal reason.  Michigan employees also have the right to leave their jobs at any time without providing a reason.

Exceptions to At-Will Terminations

While being an at-will employment state, Michigan does recognize limited exceptions to the rule.  For instance, an employer cannot terminate an employee due to discriminatory factors like race, gender, age, sexual orientation, disability, or other protected classes.

Employers are also prohibited from terminating an employee if there is an oral or written contract that negates the terms of an at-will employment.  For example, if there is an employment contract stating the employee’s term of employment will last one year, then the employer generally cannot terminate the employee without cause before that one year expires.

Additionally, Michigan employers cannot fire an employee as a form of retaliation if the employee engaged in certain protected activity.  For example, if an employee reports an unsafe working condition or a health violation, an employer cannot terminate the employee as a result.

Michigan also has a public policy exception to its at-will employment rule.  Under this exception, employers cannot terminate an employee for reasons that the Michigan public would consider unjust.  For example, if an employer asked an employee to participate in illegal activities as part of the job and the employee refused, the employer cannot terminate the employee for their refusal.

Are You Required to Pay Severance?

Michigan law does not usually require employers to pay severance to terminated employees.  But, if the employees are promised severance pay in their employment agreement or in any of the company’s policies, then the employer would be required to honor that promise and issue the severance payments.  Both employees and employers should carefully review any applicable employment agreements to determine what their rights and obligations are in each case.

Conclusion 

Understanding the complexities of employee termination in Michigan requires guidance from a skilled employment attorney.  From addressing concerns over at-will employment to severance pay, a knowledgeable employment attorney can help you protect your business interests and ensure compliance with state, local, and federal employment laws.  Contact a member of our team to learn more.

 

 

Photo by Luca Bravo on Unsplash
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