Does “at-will employment” mean we can terminate without risk?

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Answer:  No, termination always comes with some risk, even when the employment is at-will. While at-will employment allows either the employer or the employee to terminate the employment relationship at any time, with or without notice, and with or without cause, it does not permit you to terminate employment based on the employee exercising a legal right or belonging to a protected class (e.g., race, sex, religion, national origin).

There’s even some risk when the termination is for cause, because a terminated employee could claim that your reasoning is just for show, and that they were actually terminated for an illegal reason. That risk grows exponentially when you don’t provide the employee with a sensible reason for the termination.

Consequently, the safest way to terminate an employee is to have documentation that justifies the legitimate business reasons behind the termination. This documentation would include infractions of policy, instances of poor performance, and any disciplinary or corrective action taken. The more you can do to show that you had a legitimate business reason, the harder it will be for an employee to fill in the blank with their own

This is a question we get from our clients often and it is so important to understand the risks.

How long should we keep employee timecards?

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Under the Fair Labor Standards Act, you are required to keep such records for at least three years from time of creation. However, we recommend that personnel records, including payroll records and timecards, be kept for seven years from the date the record is made or the date of termination, whichever is longer. That way, if you are subject to an IRS audit (which could go back seven years), you have this supporting documentation available upon request.

If you’re currently using a paper timekeeping system and you don’t want to store that much paper around the office for seven years, you can scan paper documents for electronic storage. Just make sure you have a reliable and secure method for storing this sensitive information and are able to access it as needed.