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Employee Discipline Policies

Small businesses may sometimes skimp on their disciplinary policies. After all, in a small office or job site everyone knows one another, and business owners feel uncomfortable telling workers they've done something wrong. As a result, unacceptable behavior can build up until it's beyond control. Eventually, you must take action, resulting in hurt feelings or worse.

Small businesses may not have human resources departments to manage their disciplinary process. Owners and managers can still develop realistic policies and carry them out with minimum upset for all involved. This article will explain how to create a fair and legal disciplinary policy.

Visit FindLaw's Managing Employees for more helpful information.

Discipline Policy Basics

State and federal laws tell employers what they can't do when taking disciplinary action against employees. You may not base discipline and termination decisions on race, religion, gender, or national origin. The employee's conduct is the only thing you may consider when taking corrective action.

That is why spelling out your policy in writing is a good idea. It may seem like an employee handbook is unnecessary when you have only 20 employees, but describing your disciplinary procedures puts you and your employees on the same page.

HR professionals agree that a progressive discipline policy works better than a so-called "zero tolerance" policy. In a progressive policy, workers can correct a poor performance or mistake before it progresses to termination. A zero-tolerance policy may be appropriate for serious offenses, such as sexual harassment or theft.

Developing Your Discipline Policy

You may want advice from an HR consultant or business law attorney when you design your disciplinary policy. The Equal Employment Opportunity Commission (EEOC) enforces federal laws against discrimination and harassment. Its Small Business Resource Center has useful tips for business owners who need help complying with anti-discrimination laws.

A typical progressive discipline process follows these steps:

  1. Verbal warning: This is sometimes called a counseling session or review. The employee explains their side of the issue and makes plans to correct the problem. The employer makes a written notation of the "verbal" warning.
  2. Written warning: If the issue is not corrected or worsens, the next step is a written or formal warning. Your policy may allow several written warnings before a matter requires additional action.
  3. Final warning: In some larger companies, a final warning includes a suspension with or without pay. Smaller businesses may not have that luxury. In any case, the final warning is a formal notice that the employee's behavior has not improved, and the next step is termination.
  4. Termination: Firing an employee is the last step of your process. Your policy should make clear this is the final step and is only taken when all other efforts at performance management have failed.

A progressive discipline policy should help improve the employee's performance. It should not be strictly punitive. Employees must have the right to appeal or challenge any disciplinary action they feel was wrong.

Grounds for Employee Discipline

Deciding when and how to discipline adult workers and having reasons for doing so is challenging for small employers. Once you have a disciplinary policy in place, you must follow it. Otherwise, it will be useless. Businesses cannot thrive with minor performance issues nibbling at their bottom lines.

Some important matters to place in your employee handbook for disciplinary policies include:

  • Tardiness and absenteeism: Everyone is late now and then. Some people make a habit of it. Businesses need their workers to arrive on time. If you have multiple shifts, co-workers want to leave on time. Let workers know how late is too late and how much tardiness you will tolerate.
  • Dress codes: Many businesses have done away with dress codes. If your company has such a code, you must decide what a violation of the code is and whether it is enough to warrant disciplinary action.
  • Employee misconduct: Spend some thought on what "misconduct" means. It is not legally sufficient to "know it when you see it." For instance, if your business is a restaurant, misconduct might include mishandling food, failing to clean surfaces, or horseplay in the kitchen.

You should also include grounds for immediate termination. These may consist of illegal or egregious acts, such as:

  • Theft of company property
  • Sexual harassment or assault
  • Use of illegal drugs resulting in injury or death

Check your state laws about immediate termination protections before including these policies.

Enacting Your Employee Discipline Policy

Once you have your policy, you need to put it in place. If it's in your employee handbook, new hires should receive it during onboarding. If this is a new policy, your existing employees need a copy as soon as possible. All workers should acknowledge receipt of the policy, and you should place it in the employee's file.

If an employee violates company policy, you must put your disciplinary policy into action. The best way to carry this out is to follow your plan.

  • Act immediately: When an employee violates the policy, you must begin the process. Otherwise, there's no point in having it. For instance, if your tardy policy requires a verbal warning when an employee is more than 15 minutes late, you will have to give one when someone comes in 20 minutes late.
  • Listen to explanations, but don't accept excuses: Everyone has reasons for poor behavior. Some of them are even valid. A worker may have been 20 minutes late because traffic was awful. They were still late.
  • Move forward: Focus on work performance and prevent the issue from happening again. Instead of berating the worker for always being late or listing reasons the traffic is always bad, discuss ways the worker might avoid that freeway.
  • Be honest, and don't debate: It's common for employers to start with "you've been doing a great job" before dropping the hammer. It's also common for employees to say, "But what about the other people who are always late?" Neither of you are here for a discussion. Save that for the annual performance review. Today, you are only discussing the immediate infraction.
  • Set a deadline: You want to see the employee do better. Offer an incentive for improvement, and then check back by the deadline to see if things are better. For instance, if your worker is on time for the next six months, take the warning off their record.

Protecting Yourself and Your Workers

No matter how well you handle things, someone may decide you discriminated against them in their disciplinary action and file a complaint against you or your business. Or another business's lawsuit may involve one of your terminated employees. Protect yourself with simple measures when you take disciplinary action against an employee.

  • Treat all workers the same. Your policy must apply to all workers, new hires, and long-time employees.
  • Do not engage in any behavior that appears to treat workers differently based on race, religion, gender, national origin, or other protected class.
  • If you must make an exception to your policy, explain to the employee(s) why you made the exception and why there was no other alternative.
  • Keep written records of all disciplinary meetings and their outcomes. Place a copy of all warnings in the employee's personnel file. Give one copy to the employee.
  • Employees should have a method of appealing or contesting disciplinary actions. If you do not have an HR department or similar department, consider referring employees to the EEOC.

Disciplinary policies are there to improve performance, not to threaten workers. As long as policies are fair and consistent, your employees will follow them.

Getting Legal Advice

Employee discipline is a complex topic. Keep your policies legal and fair. Consult a business law attorney in your area before enacting your disciplinary policies.

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