Many employers start employees off with probationary periods during which the employer can let the new employees go without worrying about just cause and lawsuits. Sounds good, but there’s a downside, says attorney Sandra Rappaport.
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The use of “probationary hiring” has been confusing for employers and employees alike, Rappaport says. Originally, it was a way for an employer subject to a collective bargaining agreement (CBA) to carve out a short, introductory period that would not be governed by the same termination requirements as the regular employment period under the agreement.
Generally, that meant that during the probationary period, a union employee could be let go without concern for just cause or other rules governing termination.
Probationary periods have since been adopted by many employers who aren’t unionized, says Rappaport, who is a partner at the San Francisco office of the law firm Hanson Bridgett LLP.
Must You Have Probationary Periods?
No particular law requires employers to have a category of probationary employees or governs termination during probationary periods, says Rappaport. Essentially, the answer to how one should treat a probationary hire depends on the nature of the particular employment relationship.
If an employment contract sets forth the requirements for termination—e.g., employment can only be terminated for cause—the employer obviously must comply with those requirements. Similarly, if the employment relationship is governed by a CBA negotiated between the employer and a union representing its employees, the CBA likely will specify the grounds for termination and the required procedures for discharge. In both an employment agreement and a CBA, the contract’s language governs the requirements for lawful termination during a probationary period.
If there is no employment contract saying otherwise, the presumption in many states is that all employment is at will, which means that either party can terminate it with or without cause.
If an employer has an at-will employment relationship with all of its employees, probationary periods are really not needed. A new hire can be terminated at any time in his or her employment without cause; setting aside a special introductory period does not change that.
No Guarantee
However, says Rappaport, most employers understand that the at-will presumption does not necessarily mean that they will be immune from a wrongful termination suit. Even in an at-will state, an employer cannot terminate a person for any reason barred by state or federal law; employment decisions based on prohibited grounds like race, gender, disability, or for reporting illegal conduct (“whistleblowing”) can subject the employer to liability, even if the discharge is during a probationary period.
Therefore, it is helpful to document the legitimate bases for a termination decision, regardless of when it occurs.
Don’t Create an Implied Agreement
In addition, says Rappaport, at-will employers need to avoid creating implied agreements—through actions, policies, verbal commitments, and the like—that an employee will not be terminated except for cause.
To avoid wrongful termination lawsuits based on a claim that an implied agreement exists, employers must be careful not to behave in ways inconsistent with at-will employment. Using a probationary period may imply some increased level of job security after the period ends—an implication that is completely inconsistent with at-will employment.
To combat this possibility, an employer should clearly state in the employee handbook or in an employee’s offer letter its intention to retain the at-will nature of employment even after the probationary period expires. Additionally, employers should:
- Avoid making verbal assurances of continued employment.
- Encourage supervisors to document any problems that arise, even during the probationary period, so that evidence exists to refute any claims of termination for an illegal reason.
- Make sure all employees are treated consistently when applying policies and procedures.
- Educate supervisors on improper termination grounds and the laws governing discriminatory practices.
Recommendation
Employers that wish to maintain at-will employment relationships with their employees should evaluate whether there is a real benefit in using a probationary period, says Rappaport. Those that want to continue using probationary periods should take care to clearly articulate their reasons and implement their pertinent employment policies in such a way as to avoid opening themselves up to liability.
In a related Advisor, Hunter “Please Sue Me” Lott advises, “Probationary periods? Get rid of them!”
We use Introductory Period for new employees, rather than Probationary Period. Rationale is that probationary period could imply that once completed, that some type of relationship exist. So I advise other companies to avoid the term probationary.
Though we are an employment at will state, the introductory period serves several purposes:
1. establishes up front the requirement that new employees must be the right fit – both supervisors and employees are told this. This means that the employee may be good at his skill but is not the right person in the right job for this company – takes out some of the sting.
2. forces supervisors to take a close loop at the new employee immediately rather than the less than thorough approach used during the annual performance evaluation.
3. avoids the need to explain the termination within the 90 day period to the termed employee and avoids the issue with the progressive discipline steps requirement. Once an employee moves beyond the 90 days, the verbal, written, PIP steps apply. But not in the introductory period. No reason need be given for a term – though we generally state not the right fit. In our company, the progressive discipline steps negates, to a degree, application of the employment at will. We are obligated to follow our company policy of justifying terminations and documenting each of the steps. Similarly, with an introductory period, we follow company policy and term without a reason.
4. the company is not on record for payment of unemployment insurance in the introductory period. The employee is eligible and will receive UI but the company is not on record as the employer.
5. tracking of terms indicates that though the employee is unhappy about his/her term and wants to know the specifics, the specifics are not provided, and the termed employee accepts that.
Don’t set a probationary “period.” Period. (Unless you must by union contract.) Here’s why: In the real world, all of us are “on probation.” Even the President of the United States can be impeached and removed from office. Every business is on “probation.” Go too many years without a profit and a business goes bankrupt and the doors close. Every employee — from the CEO to the newest hire — needs to know that every day they need to move the ball forward toward the goal line…or a time out is called and they’re likely to get put on the bench.
Montana statute requires a probationary period unless the employer specifically states that there is none. If an employer does not say anything about a probationary period, there is automatically a 6 month probationary period of 6 months (MCA 39-2-904 (2) (b).
We’ve used an introductory period of 90 days. How we clarify that there is no guarantee at the end of the period is by specific wording in the handbook/policy. Basically we let new employees know that the 90-day period is a trial period in a sense, where the company can evaluate performance and fit and the new employee can get a sense if this position is right for them. In addition, Pennsylvania is an “at will” state, so we re-emphasis what that means in the handbook. The new employee is also made aware that the original 90-day introductory period could be extended if further evaluation is needed.
If employment is at-will, it is at-will for the first 60 days, the first 90 days, the first 365 days, or the first 25 years.
Given that “probation” periods were created in Collective Bargaining Agreements (CBA’s), and regardless of all at-will statements in a handbook or other documents, a jury can be convinced that when employment continues beyond the “probation” period, the employee becomes a “for cause” employee — just as in CBA’s.
Introductory periods, probationary periods, get-acquainted periods, etc. (the name is not controlling) all convey that, once the new hire has completed that time frame, he/she is a “for cause” employee.
And, given that all employment laws apply from the of employment, will an employer be successful in defending an unemployment claim or a wrongful discharge claim or an EEOC discrimination charge by stating that the employee was in his/her “probation” period or that employment is at-will?
Practically & Reality should trump philosophy with regard to “probation” periods.
can you be placed without cause after working for one year and never having a previous write-up , be placed on a 30 day probation?
Can an Introductory period protect the company from unemployment insurance claims – above, one response stated:
The company is not on record for payment of unemployment insurance in the introductory period. The employee is eligible and will receive UI but the company is not on record as the employer.
Does this cover us during the trial period in California? Thanks.
Does anyone have any research on the percentage of employees fired within a (90 day, preferably) probationary/introductory period?
Thanks.
If the employee handbook states that the “probationary period is 6 months” and continues to extend the probationary period where it nows is almost 2 years, what is the liability to the company?
I am an employee presently sueing my previous employer. They offered me employment with a one year probationary period. At no time did I see, read or was told I was an at will employee. I was never formally reviewed, written up, reprimanded. After 9 days of employment I was terminated with out warning or reason. When I asked why I was being terminated I was told, “its not up for discussion”. This took place in the state of Missouri. In Missouri if you hire someone for a definite period of time, you contracted for cause employment. Needless to say I marched my butt right into court and I am presently argueing that the 1 year probationary period is a definite term of employment and by offering probationary employment the employer implied that a fair due process would be undertaken, which never happened. Also if the employer truely intended at will employment there was no need to offer a one year probationary period contract.
At the end of the day all employers need to institute a fair dismissal process for all employee’s. If an employer uses a fair dismissal process no employee can win a law suit against said employer. Also it is of intrest to tax payers to have a fair dismissal process as SOP for employers becuase my previous employer did not dismiss me fairly I was able to collect unemployment, the employer is arguing all types of fault with me but becuase there is no proof their efforts are futile.
Also by my employer arguing fault with the unemployment offices this further solidifies my claim that they contracted me as a for cause employee.
Dear Sir/Mam,
i have signed an Agreement forming part of our employment offer in which they have given that i have to work for minimum periods of 2 years in case i want to leave job within probation period of 6 months due to immatured management and working environment. but management is asking for cost of training which they have not done, point is mentioned in agreement as separate copy apart from appointment letter.
before signing this agreement i had discussed with the signing authority about these point they replied by saying it will effect from service confirmation that is after 6 months of probation against the written confirmation but now they asking to refund the amount before asking for relieving letters.
is that correct, if worng what i have to do to collect the salary, certificates etc..
kindly revert back i am in deep trouble.
Regards,
Gajendra
I am employed with a 90 day probation period in NYS & signed a general statement saying so. It’s almost 1 additional month over the 90 days. There’s been no bad feedback. I asked about permanent & was told he’d ask the Owner. I’ve still heard nothing. This is a clerical job. Medical & vacation were supposed to start. I’m the only one there being treated this way. I feel as if I’m being held “captive.” I was laid off a 5 yr job before this & took this job and never collected unemployment. Now if I leave I’ll lose the claim. This place isn’t firing me. Just holding me captive. Is this legal? Now that I’m there beyond the probation period, isn’t this an implied agreement? Can I start legal proceedings? Would I have to quit to do so? How should I proceed?
i am currently a employee for a state funded community college.I am withi my first year of prohbational period and i have just been let go even though my reviews have been spotless. I was told two weeks but today after 1/2 of the first week i was told unexpectedly that i had two hours to pack up my stuff and leave. Is this legal? a petition has been started on my behalf by a student and they have received over 300 signatures in 24 hours. the president of the college will not see the students or at least she has continued to put it off day after day.
Let me know if there is anything i can do. my position is fully funded by the students because my petition directly benefits the students.
ive been with a hair salon for 2 months. my boss would always give me praise and tell me how professional and how well I do with people …things were going along fine untill last week. I hade a Mother Daughter come in to the salon for haircuts and myself and the little girl were joking and clowning around. After the hair cuts.. which i was tipped 4.00… my boss called me at work and asked me to leave for the day. The father of the little girl had called my boss and said she has special needs and I was being mean to her. I did not think the girl had any special needs and the mother didn’t mention it to me. Later that day my boss called again and told me to take the weekend off. The next day she called me to say I was fired. Im really at a lost with this and if anyone could give me some advice that would be appreciated. Obviously I don’t want my job back but this left me devastated!
On behalf of someone I am attempting to help, I need to have a crash course in how to make sense of the following:
What if you are a full-time contingent worker for a federal agency. You are retained by a national staffing firm that handles government contracts, and the position is essentially permanent in nature despite its classification as contract employment (non-exempt).
Here’s the rub: The firm that recruited you and covers your benefits and payroll for a six-month probationary period is not, however, the staffing agency that ultimately retains you. After a six-month probationary period, you are accepted by the primary firm to fill a position requiring a security clearance for a federal agency. In the on-boarding process, this “parent firm” cuts your hourly pay. The pay rate you negotiated with the firm that recruited you is no longer the pay rate you receive now that you passed your probation with flying colors. You are given no reason, except that the pay rate you formerly received is out of the question. Is this a bait-and-switch?
I have heard of employees making less during their probationary period with a promise to earn more if they are retained, but I have not heard of a contract employee making more during probation and essentially being rewarded in the payroll transfer with a pay cut!
Q: Doesn’t it stands to reason that the sub-contracting staffing agency should have had less “wiggle room” than the primary agency to budget for that recruit’s position and payroll, not the other way around?
I need to know if this is poor communication, poor ethics or a labor law violation under federal contingent worker labor law (or a violation of State of California labor law, for that matter). I have no idea, however, why they would turn to a third party to recruit for their vacant positions and to handle payroll and benefits when they, themselves, are a staffing agency!
Q: Is there some sort of tax advantage for one national staffing agency to use another national staffing agency to fill their positions and to pay candidates’ 6-month probationary payroll and benefit obligations?
I cannot see for the life of me how an additional middlemen, each of whom presumably needs a cut on the action, saves taxpayers money on staffing federal agencies, let alone is cost-effective in the private-sector contingent labor market.
Q: Perhaps it would be self-explanatory if it were possible to determine how much money had been allotted for that worker’s position, but is there any law stating an agency, be it staffing a private employer or a public one, has to disclose that salary/recruiting range to the applicant they ultimately retain?
In summary, if a staffing agency can afford to sublet the entire recruitment and first six months of “probationary payroll”, one can only assume the wages budgeted for said position were a lot more generous than the staffing agency HR department claimed when they said they could not restore a pay cut the employee suffered in the on-boarding process. I don’t comprehend this “new math” — let alone the ethics! Please help!
I have singed a one year contract, im on 4 weeks training but i am not getting paid for it. i am not happy with this job, Can I terminate my contract during training?
I have worked for this company 7 years
About 2 year’s ago i transferred to a different department it was a lateral move. My boss is not a good person. So just a month ago they gave my friend a promotion and a raise. More work more responsibility and the raise was. 025 per hour. So my friend thought about it and said no thank you. After that they drove her out. Now they are asking me to do the same thing and want me to sign a paperwork saying that I am on a 90 day probation. Is this right
Thanks really handy. Will certainly share website with my friends
If u dont turn your bule book in an they already sine out 3 letters an the last letter say about to get fired how long it will Take to get fired. From a union an u been there for 3months
my employer is subletting floor space? can they make me work for that company