Guide to Firing Employees in Minnesota for Employers

April 4th 2024

Terminating an employee is a challenging task that requires careful consideration of legal, ethical, and practical implications. In Minnesota, employers must understand the state and federal laws governing employment relationships to ensure that terminations are conducted lawfully and respectfully.

This firing guide aims to provide employers in Minnesota with a comprehensive overview of the termination process. Understanding the relevant laws and implementing effective termination procedures helps minimize legal risks and maintain positive workplace relationships.

This firing guide covers:

What Does Firing an Employee in Minnesota Involve?
Differentiating between Firing, Layoffs, and Resignations in Minnesota
Why Does a Well-Planned Termination Process Matter in Minnesota?
Termination Laws in Minnesota: What You Need to Know
Legal Implications of Wrongful Termination in Minnesota
Required Documents for Employers and Terminated Employees in Minnesota
Who is Responsible for Firing Employees in Minnesota?
How Long is the Termination Process in Minnesota?
How Can You Prepare for Termination in Minnesota?
Steps for a Respectful Termination Process in Minnesota
Post-Termination: What Happens Next After Terminating an Employee in Minnesota?
Legal Considerations During Termination in Minnesota
Bonus: Best Practices for Reducing Litigation Risks in Minnesota

What Does Firing an Employee in Minnesota Involve?

Firing an employee in Minnesota involves ensuring compliance with state and federal laws, including adhering to at-will employment principles, avoiding discriminatory and retaliatory practices, and providing necessary information post-termination. Employers should be prepared to address any legal or administrative requirements associated with the termination process.

Differentiating between Firing, Layoffs, and Resignations in Minnesota

In Minnesota, there are legal distinctions between firing, layoffs, and resignations, each with its own implications and consequences for both employers and employees.

Firing in Minnesota

Firing is also known as termination or dismissal, it happens when an employer ends the employment relationship with an employee for reasons such as misconduct, poor performance, or violation of company policies.

In Minnesota, employment is considered “at-will,” meaning either the employer or employee can terminate the employment relationship at any time, for any lawful reason, unless there is an employment contract stating otherwise or the termination violates anti-discrimination laws.

Layoffs in Minnesota

Unlike firing, layoffs are not based on an individual employee’s performance or misconduct. Layoffs occur when an employer reduces its workforce due to business-related reasons (e.g., economic downturn or organizational restructuring).

In Minnesota, employers are subject to both state and federal laws regarding layoffs. Employers must adhere to the Worker Adjustment and Retraining Notification (WARN) Act, which requires employers to provide advance notice of mass layoffs or plant closures under certain circumstances.

Resignations in Minnesota

Resignation occurs when an employee voluntarily chooses to end their employment with an employer. This could be due to various reasons such as finding a new job, personal reasons, dissatisfaction with the current job, or retirement.

In Minnesota, employees have the right to resign from their jobs at any time, with or without notice, unless there is an employment contract or collective bargaining agreement stating otherwise. In addition, employees who resign may not be eligible for unemployment benefits unless they can demonstrate that they had good cause for resigning.

Why Does a Well-Planned Termination Process Matters in Minnesota ?

A well-planned termination process in Minnesota is crucial for several reasons:

  • Legal Compliance: Minnesota has specific laws and regulations governing employment termination. A well-planned termination process ensures that the employer complies with all relevant laws. Employers who fail to comply with these legal requirements may face fines, penalties, or even lawsuits.
  • Mitigation of Legal Risks: Terminations perceived as unfair or discriminatory can lead to legal challenges. By following a well-planned termination process, employers can mitigate the risks of legal challenges.
  • Preservation of Reputation: A poorly handled termination can damage an employer’s reputation both internally and externally. Employees who received unfair treatment and perceived that they have been terminated unlawfully may spread negative word-of-mouth that may impact the morale of the employer and productivity among the remaining employees.
  • Maintaining Employee Morale and Management: Employers should make the termination process in a respectful and compassionate manner to minimize the impact on the departing employee and remaining employees. A well-planned termination considers clear communication of the decision to the affected employee, provides support resources, and ensures remaining employees understand the reasons for termination and how it aligns with company policies and procedures.
  • Minimizing Disruption to Business Operations: Terminations can disrupt business operations if they are not handled properly. A well-planned termination considers the transitioning and transferring knowledge and skills to departing employees, minimizing disruptions to workflow and productivity,

Termination Laws in Minnesota: What You Need to Know

In Minnesota, termination laws are governed by state and federal statutes. Here are some key laws and regulations relevant to termination in Minnesota:

  • Minnesota Human Rights Act (MHRA): This law prohibits discrimination in employment based on protected characteristics (e.g., race, color, religion, nationality, sex, marital status, disability, age, sexual orientation, genetic information). Employers are prohibited from terminating employees on the basis of these protected characteristics.
  • Minnesota Whistleblower Act: The Minnesota Whistleblower Act protects employees from retaliation for reporting suspected violations of law or other improper conduct by their employer.
  • Minnesota Payment of Wages Act: This act governs various aspects of wage payments. Employers must pay terminated employees their final wages, including any accrued but unused vacation leave or paid time off.
  • Federal Anti-Discrimination Laws: While not specific to Minnesota, federal laws such as Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA) also prohibit discrimination in employment on the basis of protected characteristics. Employers in Minnesota must comply with these federal anti-discrimination laws when terminating employees.
  • Consolidated Omnibus Budget Reconciliation Act (COBRA): COBRA provides terminated employees with the right to continue their group health insurance coverage for a limited period of time after termination, subject to certain conditions. Employers subject to COBRA must provide terminated employees and their dependents with written notice of their rights to continue health insurance coverage under COBRA.

Wrongful termination in Minnesota refers to situations where an employer unlawfully terminated an employee in violation of state or federal laws, employment contracts, or public policy. Here are some of the key legal implications of wrongful termination in Minnesota:

  • Legal Liability: Employers who wrongfully terminate employees may be held liable for damages resulting from the termination. This can include back pay, front pay, lost benefits, emotional distress, and punitive damages, depending on the circumstances of the case.
  • Discrimination Claims: Wrongful termination claims often arise from allegations of discrimination based on protected characteristics. Employers found to have unlawfully terminated employees based on these protected characteristics may face legal action under state and federal anti-discrimination laws.
  • Retaliation Claims: Employees who engage in protected activities are protected from retaliation by their employers. Wrongful termination claims may arise if an employer terminates an employee in retaliation for engaging in protected activities.
  • Breach of Contract Claims: If an employer terminates an employee in violation of an employment contract or implied contract, the employee may have grounds for a breach of contract claim. Employers may be held liable for damages if they fail to adhere to the terms of the employment agreement or make unilateral changes to the terms of employment without the employee’s consent.
  • Violation of Public Policy: Wrongful termination claims may also be based on allegations that the termination violates public policy principles. For example, terminating an employee for refusing to engage in illegal activities or reporting violations of the law may be considered wrongful termination in violation of public policy.
  • Unemployment Compensation Claims: Employees who are wrongfully terminated may be eligible to receive unemployment compensation benefits from the Minnesota Unemployment Insurance Program. Employers found to have unlawfully terminated employees may be required to pay unemployment benefits to the affected employees.
  • Reputational Damage: Wrongful termination claims can also result in reputational damage to the employer, affecting the organization’s brand image, employee morale, and ability to attract and retain talent.

Required Documents for Employers and Terminated Employees in Minnesota

In Minnesota, there are certain required documents for both employers and terminated employees. Here’s an overview of the documents each party may need:

Employers’ Requirements

  • Termination Letter or Notice: If terminating an employee, employers may provide a termination letter or notice stating the reason for termination and the effective date of termination. While not always legally required, it can help clarify the terms of the termination.
  • Final Paycheck: Employers must provide terminated employees with their final paycheck, including all wages and commissions earned up to the time of termination, by the next regularly scheduled payday. This paycheck should include any accrued but unused vacation or PTO.
  • COBRA Notification: For employers subject to COBRA, they must provide terminated employees and their dependents with a notice explaining their rights to continue health insurance coverage under COBRA.
  • Unemployment Benefits Information: Employers must provide terminated employees with information about how to apply for unemployment benefits, including details on eligibility criteria and how to file a claim with the Minnesota Unemployment Insurance Program.
  • Severance Agreement: If offering a severance package to the terminated employee, employers must provide a severance agreement outlining the terms and conditions of the severance, including any financial compensation, benefits continuation, and release of claims.

Terminated Employees’ Requirements

  • Documentation of Termination: Terminated employees should request and retain documentation of their termination, including the termination notice provided by the employer, final paycheck stub, and any relevant communications or agreements related to the termination.
  • COBRA Election Form: If the terminated employee wishes to continue health insurance coverage under COBRA, they must complete and return the COBRA election form provided by the employer within the specified time frame.
  • Unemployment Benefits Application: Terminated employees should promptly file for unemployment benefits through the Arkansas Division of Workforce Services by completing the required application and providing any necessary documentation to support their claim.
  • Review of Employment Agreement: If the terminated employee had an employment contract or agreement, they should review the terms of the agreement to ensure that the employer complies with any obligations related to termination, such as notice periods or severance pay provisions.

Who is Responsible for Terminating in Minnesota?

In Minnesota, the responsibility of firing employees falls on the decision of Human Resources (HR), managers, and legal counsel, each with their own roles and responsibilities.

Role and Responsibilities of Human Resources 

HR personnel play a central role in the termination process. The responsibilities of an HR includes:

  • Ensuring the termination process complies with company policies and with state and federal laws.
  • Maintaining accurate and thorough documentation relevant to the termination process, including performance evaluations, disciplinary actions, and any other employment history records.
  • Communicating the termination decision to the employee professionally and compassionately, providing necessary information about benefits, final pay, and next steps.
  • Coordinating exit procedures (e.g., collecting company property, deactivating access to systems and facilities, and arranging for the return of any company-owned items.)
  • Consulting with legal counsel to ensure that the termination process follows all applicable state and federal laws.

Role and Responsibilities of Managers

Managers or supervisors are often directly involved in the termination process, particularly when it comes to evaluating employee performance and behavior. The responsibilities of a manager may include:

  • Evaluating employee performance and identifying performance issues or misconduct that may warrant termination and documenting issues.
  • Making the decision to terminate an employee in consultation with HR and/or legal counsel, based on objective criteria and company policies.
  • Participating in the termination meeting and communicating the termination decision to the employee, while showing empathy and respect.

Role and Responsibilities of Legal Counsel

Legal counsel provides guidance to ensure that the termination process is conducted in accordance with applicable laws and regulations. The responsibilities of a legal counselor include:

  • Advising HR and management on relevant federal and state laws governing termination.
  • Assessing potential legal risks associated with the termination.
  • Reviewing documentation related to the termination.

How Long is the Termination Process in Minnesota?

The duration of the termination process in Minnesota has no set timeline and can vary depending on various factors. However, there are certain considerations that may affect the timeline of the termination process:

  • Notice Period: If the termination involves providing advance notice to the employee, the duration of the notice period impacts the overall timeline. Some employers may also have an internal policy or employment contracts that specify the need for a notice period.
  • Investigation and Documentation: In cases where termination is based on misconduct or performance issues, employers may need to conduct an investigation to gather relevant information and evidence. This process can take time, particularly if the situation is complex and involves multiple parties.
  • Consultation with HR or Legal Counsel: Employers may choose to seek advice from HR professionals or legal counsel to ensure that the termination process is conducted in compliance with applicable laws and regulations. The consultation process can add to the overall duration of the termination process but may be important for mitigating risks.
  • Employee Notification and Transition Planning: Once the decision to terminate has been made, employers need to communicate the decision to the employee and make arrangements for the employee’s departure. This may involve scheduling a meeting with the employee to provide information and make arrangements for knowledge transfer or transition of responsibilities.
  • Severance Agreements: In some cases, employers may negotiate severance pay agreements with terminated employees, which can add to the overall timeline of the termination process.

How Can You Prepare for Termination in Minnesota?

Preparing for termination in Minnesota involves careful planning, adherence to legal requirements, and consideration of the well-being of both the departing employee and the remaining workforce. Here’s how you can prepare for termination in Minnesota:

  • Review Documentation: Gather and review documentation related to the employee’s performance and conduct. Ensure that there is a clear and documented rationale for the termination decision.
  • Consider Alternatives: Consider alternatives to termination may be appropriate in the circumstances. Explore all options for addressing performance or conduct issues before resorting to termination.
  • Plan the Termination Meeting: Schedule a private meeting with the employee to discuss the termination. Prepare talking points and anticipate questions or reactions from the employee.
  • Gather Necessary Information: Gather information and materials that will be needed during the termination meeting, such as the termination notice, final paycheck calculations, information on COBRA coverage, and any relevant company policies or procedures.
  • Arrange Logistics: Coordinate logistic details and ensure any outstanding tasks or responsibilities are appropriately delegated or addressed.
  • Communicate with HR and Management: Inform HR and relevant management personnel about the impending termination and ensure that they are prepared to provide support to the departing employee and address any concerns from other employees.
  • Provide Support Services: Consider offering support services to the departing employee (e.g., access to career counseling, assistance with resume writing, or information on unemployment benefits).
  • Plan Communication to Staff: Develop a plan for communicating the termination to the rest of the staff, taking into account the need for confidentiality and sensitivity. Consider providing reassurance to remaining employees and addressing any concerns they may have.
  • Document the Process: Maintain detailed documentation of the termination process, including employee’s performance records, disciplinary actions, the termination meeting, and any agreements reached with the departing employee.

Steps for a Respectful Termination Process in Minnesota

Implementing a respectful termination process in Minnesota is crucial for maintaining positive relationships, protecting your company’s reputation, and minimizing the risk of legal disputes. Here are the steps for conducting a respectful termination process:

  • Preparation: Review the employee’s performance and conduct to ensure that the termination is warranted and supported by documentation. Consider any potential legal implications and consult with HR professionals or legal counsel if necessary.
  • Schedule a Private Meeting: Arrange a private meeting with the employee to discuss the termination decision. Choose a time and place that the employee is least likely to be disrupted or embarrassed by the termination process.
  • Communicate Clearly and Respectfully: Clearly communicate the reasons for the termination. Do not criticize the employee and refrain from discussing sensitive issues that are unrelated to the termination.
  • Listen and Provide Support: Allow the employee to express their thoughts and concerns about the termination process.
  • Address Logistics and Benefits: A written termination notice should be provided and assistance with applying for unemployment benefits should be offered.
  • Follow Up: After the termination meeting, follow up the employee and provide any additional support they may need. Maintain an open line of communication and be available to answer questions that may arise.
  • Maintain Confidentiality: The reasons for the employee’s termination should remain confidential and should not be discussed unless necessary for business reasons.

Post-Termination: What Happens After Terminating Employee in Minnesota?

After terminating an employee in Minnesota, several steps follow to ensure a smooth transition and to address any legal or administrative requirements. Here’s what typically happens next:

  • Finalizing Termination Details: Ensure that all necessary paperwork related to the termination is completed, including providing the employee with a termination letter or notice, finalizing any outstanding payments such as wages, commissions, or accrued vacation time, and collecting company property from the employee.
  • COBRA Coverage Notification: If your company is subject to the Consolidated Omnibus Budget Reconciliation Act (COBRA), provide the terminated employee with information about their right to continue health insurance coverage through COBRA. This typically involves providing a notice explaining their rights and options for continued coverage.
  • Unemployment Insurance: Provide information to the terminated employee about how to apply for unemployment insurance benefits through the Minnesota Unemployment Insurance Program. This may involve providing documentation or responding to inquiries from the Minnesota Department of Employment and Economic Development (DEED) regarding the employee’s separation from employment.
  • Updating Employee Records: Update your company’s records and systems to reflect the employee’s termination, including removing their access to company systems and facilities, updating payroll records, and notifying relevant departments or vendors of the employee’s departure.
  • Addressing Confidentiality and Non-Disclosure Obligations: Remind the terminated employee of any confidentiality or non-disclosure agreements they may have signed and provide guidance on their ongoing obligations to protect confidential company information even after termination.
  • Handling Communications: Communicate the employee’s departure to relevant stakeholders within the company, such as their supervisor, team members, and HR department, as appropriate. Emphasize the importance of maintaining professionalism and confidentiality when discussing the termination.
  • Transitioning Responsibilities: Plan for the transition of the terminated employee’s responsibilities to other team members or hiring a replacement, if necessary. Ensure that any essential tasks or projects are appropriately delegated to avoid disruption to business operations.
  • Post-Termination Support: Offer support to the remaining employees who may be affected by the termination, such as providing guidance on workload management, addressing concerns about job security, and offering counseling or support services if needed.
  • Legal Review: Conduct a legal review of the termination process to ensure compliance with relevant employment laws and regulations, including anti-discrimination laws, wage and hour requirements, and any contractual obligations.
  • Documentation and Recordkeeping: Maintain detailed documentation of the termination process. This documentation may be valuable in the event of legal challenges or disputes related to the termination.

Legal Considerations During Termination in Minnesota

During the termination process in Minnesota, employers must know various legal considerations to ensure compliance with state and federal laws and mitigate the risk of legal disputes. Here are some key legal considerations to keep in mind:

  • At-Will Employment: Minnesota follows the doctrine of employment-at-will, which means that employers can generally terminate employees for any reason or no reason at all, as long as it is not illegal or discriminatory. However, there may be exceptions, such as implied contracts or public policy exceptions, that limit the employer’s ability to terminate without cause.
  • Discrimination Laws: Employers in Minnesota are prohibited from terminating employees based on protected characteristics such as race, color, religion, national origin, sex, marital status, disability, age, sexual orientation, or familial status. Termination decisions should be based on legitimate business reasons unrelated to these protected characteristics.
  • Retaliation Protections: Employers are prohibited from terminating employees in retaliation for engaging in protected activities, such as filing discrimination complaints, participating in investigations, or whistleblowing. It is crucial to ensure that termination decisions are not made in response to protected activities by employees.
  • Severance Agreements: If an employer offers severance packages to terminated employees, it’s essential to ensure that the terms of the severance agreement comply with state and federal laws, including requirements for consideration, release of claims, and compliance with applicable statutes such as the Older Workers Benefit Protection Act (OWBPA).
  • Final Paycheck and Requirements: Minnesota law requires employers to pay terminated employees all wages and commissions earned up to the time of termination by the next regularly scheduled payday. This includes any accrued but unused vacation or PTO.
  • Documentation and Recordkeeping: Employers should maintain accurate and thorough documentation of the reasons for termination. Documentation should be objective, factual, and consistent to support the employer’s decision in case of legal challenges.

Bonus: Best Practices for Reducing Litigation Risks in Minnesota

Implementing proactive measures to foster a fair and respectful workplace environment while ensuring compliance with applicable state and federal laws can reduce litigation risks. Here are some of the best practices:

  • Establish clear policies and procedures: Develop and communicate clear policies and procedures related to employment. Employers must ensure that the policies are well-written, understandable, easily accessible to employees, and consistently applied across the organization.
  • Provide regular training and education: Conduct regular training sessions for managers and employees on proper handling of employees. Employers must ensure that the training programs are tailored to the specific needs of the organization and provide practical guidance on maintaining a respectful and inclusive workplace culture.
  • Document employment decisions and actions: Maintain accurate and thorough documentation of employment-related decisions and actions. Employers should document the reasons behind employment decisions, ensuring that they are based on legitimate business reasons and supported by objective evidence.
  • Handle complaints promptly and fairly: Establish a clear process for employees to report complaints or concerns about discrimination, retaliation, or other workplace issues. Investigate complaints promptly and take corrective actions.
  • Ensure compliance with employment laws: Stay informed about federal and state employment laws. Employers should regularly review and update policies to ensure company practices adhere with changes if there are any.
  • Engage in Alternative Dispute Resolution (ADR): Consider implementing an ADR to resolve employment-related disputes outside of the courtroom. Employers may include arbitration agreements in employment contracts, subject to legal requirements and considerations.
  • Consult with Legal Counsel: Employers may seek guidance from experienced employment law attorneys to ensure that employment policies, practices and decisions comply with applicable laws and regulations. If faced with employment-related disputes or potential litigation, consult with legal counsel to develop a strategic approach.
  • Regularly Assess and Improve Practices: Conduct regular audits or assessments of employment practices, policies, and procedures to identify areas of improvement and address potential risks. Employers who continuously monitor their workplace dynamics and employee feedback can address issues proactively before they escalate into legal disputes.

Final Thoughts

Firing an employee in Minnesota is a crucial step that affects both workers and employers. For employers in Minnesota, familiarizing themselves with these laws and implementing the best practices helps mitigate legal risks, promote fairness and equity in the workplace, and maintain positive employee relations.

Learn more about Minnesota Labor Laws in our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.

Most Read