Restaurant Firing Guide | Off-Boarding Best Practices

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August 31, 2022
Employee putting his belongings in a box after being fired

As a restaurant owner, you know how painful it can be to "let go" of staff, or to have great people leave of their own volition.

When done right, losing a team member is unfortunate, possibly bitter sweet;  but when done wrong -it can put you at risk for legal liabilities, or disgruntled ex-employees chasing you down. (Yikes!)

Save yourself the pain and suffering, and follow our step by step restaurant off-boarding guide.

People always talk about the 
restaurant onboarding processes, but what about off-boarding? 

Below, you'll find everything you need to know about off-boarding a restaurant employee, from checklists to follow to essential documents to obtain - let's dig in!

What is employee off-boarding?

Employee off-boarding is the process you take to separate an employee from your company. A good off-boarding process fulfills two needs: it provides vital information for retaining future employees and creates a safe space if the employee wants to return.

What does the off-boarding process look like?

The typical off-boarding process starts with employees turning in their work-related materials and equipment (e.g., restaurant uniforms). Next, the employee signs all necessary paperwork (e.g., benefits documentation). Finally, the employee will conduct an exit interview to provide a record of why they are leaving.

The length and details of the process vary depending on the business. For example, your part-time employees might not get the documentation of the same benefits.

Why is proper employee off-boarding important?

Proper employee off-boarding is essential because it ensures you cover your bases and act respectfully. A consistent, simple process also protects you by following legally required procedures, as well as allowing you to gather any additional information around why the employee is choosing (or having) to leave.

Important steps will fall through the cracks without a consistent, detail-oriented off-boarding process; employees might also feel dejected, creating a reputation for you as an employer.
The more you learn from the termination or departure, the better you become an owner. 

When running a restaurant, any information you can use to improve your working conditions can help reduce turnover. After all, turnover in many restaurants can be as high as 70%, making any activities that reduce that chance important.

A man going over termination documents

What is the proper way to terminate an employee?

To properly terminate an employee, follow these tips:
  • Track the incidents leading up to the employee's termination
  • Prepare your case for termination 
  • Follow all locally required laws (state/federal/provincial)
  • Be clear and direct during the termination process
  • Complete all the necessary paperwork for termination

During the employee off-boarding process, the person undergoing the termination must understand why this is happening. This understanding needs to be on paper and in clear terms. 

If the termination is because of a failure on the employee's part, you need to have documented incidents. Incident reports, signed by the former hire, should provide clear steps for improvement. 

Ultimately, this process acts as a legal defense against wrongful termination. After all, if employees don't meet what is expected of them (covered during the onboarding checklist), you have solid grounds to terminate them. 

With a firm understanding on both sides, you can suggest an exit interview. This process allows them to return some of that feedback. 

What is an employee exit interview?

An employee exit interview is a meeting between human resources and a recently terminated employee regarding their experience with the position and company. An employee exit interview is an excellent opportunity for the company to improve itself. It might also result in employee retention. 

Exit interviews do not solely occur during employee termination. Sometimes, exit interviews occur because an employee plans to leave and turns in a letter of resignation. You'll find those who turn in letters like these are more likely to take these interviews. 

Whether an employee quits or you fire them, your goal is to focus on a smooth transition. This way, everyone feels like they get their chance to speak up about personal issues, not leaving it to be so one-sided. 

You should not limit exit interviews to star performers or long-time employees. Exit interviews should go to everyone, providing more consistent results to act upon. 

The only time where exit interviews are not appropriate is during large-scale layoffs. For example, if you need to close one of your restaurants because it isn't performing well. 

What are some good questions to ask in an employee exit interview?

Here are some must-have questions on your next exit interview:
  • What company policies did you find difficult to understand?
  • What has you looking for another job?
  • Would you ever consider returning to the company?
  • Did you feel we provided you with the right tools to be successful?

Good exit interview questions need to start by asking why they are leaving. From there, they need to lead to the deeper reasons behind why.

Many people feel they aren't a good fit; others might not like the training process, sometimes there might be a concerning manager identified during the interview. As the owner, it will be up to you to take these interviews seriously. 

As you observe more of these interviews, look for trends found repeatedly in these interviews. For example, you might find that a section of your training manual needs a major overhaul. You might also find one of your managers is mistreating your employees. 

Overall, the big question is this: "what would it take for you to come back?" This one, above all others, will cause some brutal, no-nonsense answers. Be prepared to take the feedback and don't take it personally. 

Akward lady during an exit interview

How to off-board using employee off-boarding software?

Off-boarding software, like Push Operations, allows you to handle the process in under ten minutes. You can end the position entirely, remove a terminated employee, temporarily deactivate the employee, and set the employee profile as inactive by using the right restaurant HR software.

When off-boarding employees using this software, be sure to check the following:

  • Did you provide them with their Record of Employment? (ROE)
  • Do they have access to their required tax documents? 
  • Do they qualify for severance pay? They do sometimes if they've been with you for over 12 months.
  • Did you provide them with a two-week written notice (required by the Canada Labor Code)?
  • Did you follow union guidelines on submitting termination notices (required if your employee is part of a union)?

It is best to provide them with copies of everything leading up to their employment before closing their account. This way, they have as much access to the records as you do. 

Much as current employees need continuous access to documents, former employees need the same documents in their hands for whatever reason. By respecting your former employee's right to information, you respect them. This level of transparency is something your ex-employees will appreciate, even as they are being terminated. 

To simplify the process of employee off-boarding, you need to create an off-boarding checklist. 

What should I include in an employee off-boarding checklist?

Typically, you'll want to include these things in your employee off-boarding checklist:

  • Preparing all legally required documents
  • Paying all unused vacation time
  • Removing account permissions and recovering company assets 
  • Protecting your important information assets 
  • Closing things out with an exit interview 

What documentation do I need for employee off-boarding?

The documents you need will depend on where your company is located. However, they ‌include these things:

  • A Record of Employment (Canada)
  • Tax Documents (W2s, T4s, etc.)
  • Benefits Information (regarding health insurance, 401ks, etc.)
  • Proof of termination (signed by you, the employer)
  • Final wages acknowledgement

The proof of termination letter does not need to have a "reason for termination." However, providing one alongside evidence provides you with legal protection. 

The final wages acknowledgement also provides legal protection, making former employees aware of their last paycheck. The remaining documents needed require a few more details we will discuss below. 

What is a Record of Employment?

A Record of Employment (ROE) provides proof that employees are receiving earnings. The ROE makes the earnings insurable, meaning the employee can use this information to collect unemployment insurance if they cannot collect earnings. It is a requirement whenever an employee stops working.

An ROE is something you can get your off-boarding software to generate for you automatically. Employees use this information to gain jobs elsewhere. ROEs will take up to five days for processing. You can then forward the requested documents to them. 

What tax documents are required upon termination? 

Tax documents include W2s and T4s, which will allow the employee to file taxes properly later in the year. W2s contain regular income information for those who live in the United States, while Canadians receive the similar T4 document. Both are necessary for taxes.

In the US, you'll need to send the W2 one last time before tax season comes, which often means you send it in January. Typically, you'll follow the same rules for Canada and T4s, which you need to send in by the end of February.

What benefits documentation do you need upon termination?

Benefits-based documentation changes depending on what you provide. However, this benefits information includes what they need to do with their retirement, health care benefits, and anything else they receive while under your employment. Part-time employees are less likely to receive this information. 

In the US, former employees keep their health insurance for about 30 days on the last check. Afterwards, they will receive information about COBRA (Continuation of Health Coverage). COBRA requires that you provide them with some level of coverage while transitioning between jobs. 

Regarding 401ks, you need to provide them with information about how to transition them. Often, you can leave much of this up to your 401k, who will automatically send the retirement amount to a third-party account holder after some time. 

Canadians may receive two weeks of wages after termination (or a two-week notice of termination). Other than that, Canada's version of healthcare and the 401K are government-controlled, meaning that transitions are unnecessary. 

sign language saying you are fired

What else should I prepare for employee off-boarding?

Here are some last notes for your employee off-boarding checklist:

  • Formal resignation letter
  • Deactivate any company accounts 
  • A process for transferring and protecting your knowledge assets 
  • Take them from your workforce management software
  • Remove them from the scheduler
  • Addressing outstanding payments (vacation)

A formal termination letter differs from a "proof of termination." The letter is more intended to affirm the termination date and wish the employee well on future endeavors. So, you can use it to have a smooth closing.

You can protect knowledge assets using NDAs, or Non-Disclosure Agreements. NDAs ensure a chef can't learn your process for success and duplicate it in their own business. This differs from a non-compete agreement, which is uncommon in the restaurant industry. 

Revoking of account access ensures that they cannot access digital assets after a termination. This protects them from receiving unauthorized information. 

If they have accounts on any workforce management software, be extra careful to remove their assets. However, check to be sure there are no account-specific files requiring their authorization before removing. If they don't have that, double-check that you've removed them from the scheduling software. 

Finally, vacation time and unpaid time must come with the last check. It is a legal requirement that comes alongside the final wage statement. 

What employee off-boarding software should I use? 

The best employee off-boarding software is Push Operations. This software follows your new hires throughout the entire employee lifecycle. To make managing and sending termination documents easy, Push Operations provides your best overall solution. Check it out today to make your off-boarding (and onboarding) process smooth. 

Want to learn best practices around hiring the right people? Check out our free guide on restaurant hiring and onboarding best practices.

A guide to restaurant hiring and firing

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August 2022


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