Termination of Independent Contractors and Employees at CS&S

Involuntary termination (versus voluntary resignation) is a rare occurrence that most teams hope to avoid. As a result, terminations often suffer from rushed processes that can expose teams to potential legal action as well as significant harm to team morale.

Mitigate risk and practice care by familiarizing yourself with the compliance concerns, process and suggestions below before you find yourself in a situation that calls for involuntary termination.

Terminating an Independent Contractor

Please reference the current template independent contractor agreement for the most up-to-date termination language.

As of Aug 2023, the termination language reads:

• This Agreement may be terminated prior to completion of the Engagement:
  • by Organization at any time upon written notice to Independent Contractor of its intention to do so, and effective upon the date specified in the notice, or:
  • by Independent Contractor should Organization fail to satisfy any provision of this Agreement by giving written notice to Organization of their intention to do so, and effective upon the date specified in the notice.

• In the event of termination prior to completion of the Engagement, Independent Contractor will be entitled to recover payment under this Agreement for Services rendered to the date of termination and expenses reasonably incurred prior to the effective date of termination.

Process to Terminate an Independent Contractor

As soon as termination is first considered, fiscally sponsored projects should:

• Notify CS&S at fsp at codeforsociety.org to seek consultation.
• Gather documentation to support justification of termination. This can include records of communication that have taken place between you and the contractor, meeting minutes, documentation of availability, and/or performance review forms.
• Performance issues should be addressed with the contractor prior to termination. Termination should be a last resort in the event that attempts to improve performance have not been successful. Speaking with the contractor about performance issues will also help to avoid surprise at the time of termination.

At least 5 business days prior to desired date of termination, fiscally sponsored projects should:

• Contact CS&S at fsp at codeforsociety.org to request information on timeline and compliance obligations relevant to the employee's location.
  • For non-US employees, restrictions vary and termination may not be possible within the desired timeframe.
  • Projects are expected to provide documentation of justification for termination at this time.
• Once an effective date of termination has been confirmed, CS&S will file documentation of the termination request in our records.

At least 3 business days prior to desired date of termination, fiscally sponsored projects should:

• Send the contractor an email detailing their termination (template below)
• If applicable, request from CS&S transfer of ownership of digital files such as Google Drive and email access
• If applicable, request from CS&S a date and time to change the password and forward access to the terminated contractor’s Google user account, restricting further access to any of their Google applications. We recommend that this action be done at EOD on the effective date of termination.

Email template for terminating a contract

Hi [Contractor Name],

After much communication with you and our team about your performance to fulfill our signed agreement, we will be terminating your contract with [NAME OF PROJECT].

Your contract will terminate on [DAY AND DATE OF TERMINATION].

Because this contract is being terminated before the scheduled completion of the deliverables, you are entitled to recover payment under the Agreement for Services rendered to the date of termination and expenses reasonably incurred prior to the effective date of termination.

On your next and final invoice, please include line items to bill for [actual hours worked at the hourly rate specified in the agreement / a prorated portion of deliverables that have been provided, totaling $X].

[SIGN OFF],

Termination of employees

Justification

While each termination is unique and will require a varied set of considerations, common justifications include:

• Performance: 
  • Employee consistently fails to meet deadlines.
  • Employee consistently fails to meet the responsibilities indicated in their job description.
  • Employee consistently fails to communicate needs and updates, creating significant negative impact to team.
• Behavior: 
  • Employee’s words and actions within the workplace do not align with your team’s stated values and expectations.

Risks

While all US employment with CS&S is an at-will relationship, termination of employment is still subject to:

• State-by-state labor protections stipulating timeline requirements for notice of termination and right to information regarding benefits eligibility.
• Pursuit of legal action if employee feels they were wrongfully terminated or discriminated against on the bases of age, race, color, religion, sex, ethnic/national origin, disability, veteran state, or protected whistleblower status.

Mitigate risk by contacting fsp at codeforsociety.org as early as possible to determine requirements in your employee’s location.

Employees outside of the US:

• Do not have at-will relationships, and are protected by the labor laws in their country of residence, which stipulate wide-ranging timeline considerations and justification restrictions.
• This resource from Remote.com details country-by-country notice of termination periods.

Again, mitigate risk by contacting fsp at codeforsociety.org as early as possible to determine requirements in your employee’s location.

Beyond legal risks, any disruption of team makeup can impact trust and morale. Mitigation measures include:

• Reflecting upon support resources:
  • If you are considering an involuntary termination, is the team member in question aware of your concerns?
  • Are the timeline and responsibility expectations you have established achievable?
  • Has the employee received sufficient training to meet your expectations?
  • Are there extenuating circumstances in the employee’s situation that could be impacting their performance, and if so, are you able to offer support to ease impact?
  • Have you made efforts to work with the employee to address issues in performance or behavior?
  • Have you asked what kinds of support they may need from you to reach improvement goals?
• Practicing transparency across the team:
  • Conditions of termination will require sensitivity unique to the situation, but where possible, share relevant information with team members and invite dialogue for those with questions or concerns.
  • CS&S is available to consult on the level of discretion your unique situation requires. Some states also restrict information that can be shared regarding employee terminations.

Process to Terminate Employment

• As soon as termination is first considered, fiscally sponsored projects should:
  • Notify fsp at codeforsociety.org to seek consultation.
  • Gather documentation to support justification of termination. This can include meeting minutes, communication exchanges, documentation of availability, and performance review forms.
    • Performance issues should be addressed prior to termination. Termination should be a last resort in the event that attempts to improve performance have not been successful.
      
• At least 5 business days prior to desired date of termination, fiscally sponsored projects should:
  • Contact fsp at codeforsociety.org to request information on timeline and compliance obligations relevant to the employee's location.
    • For non-US employees, restrictions vary and may not be possible within the desired timeframe.
    • Projects are expected to provide documentation of justification for termination at this time.
      
• Once an effective date of termination has been confirmed, CS&S will enter the termination request in TriNet/Remote.
  • TriNet/Remote will generate a notification of termination letter which CS&S will share with the project lead. This is not intended to replace a notification of termination to the impacted employee, which must be delivered by the project.
  • TriNet/Remote does not notify the employee of termination until after the effective date of termination.
• On the date of notification:
  • The project must notify the employee of their decision to terminate.
    CS&S will:
    • If applicable, perform a transfer of ownership/Google Takeout. The employee will retain access to their user account at this time.
    • If applicable, request a date and time to change the password and forward access to the terminated employee's user account, restricting the employee from further accessing any of their Google applications. We recommend that this action be done at EOD on the effective date of termination.
      
• Prior to the effective date of termination, CS&S will:
  • Share locally-mandated notices with the employee.
  • Conduct a 25 minute exit interview with the employee, intended to provide feedback to the project team and CS&S.
    • CS&S will coordinate directly with the employee to arrange the exit interview.
    • Following the interview, CS&S will share notes with project and CS&S leadership.

Information for terminated employees

CS&S will share the following information with employees on the date of notification:

• 5-10 business days from your effective termination date, COBRA forms will be both mailed to your home address and sent to your personal email address on file. Be sure to confirm that your contact information in the TriNet platform is correct.
• You will receive information relevant to your location of residence regarding your eligibility for unemployment benefits from CS&S HR.
• You will continue to have access to the TriNet platform indefinitely. You will use the platform to access earning statements, W2 information, and for COBRA's open enrollment period.
• Your insurance cards will no longer be accessed through the TriNet platform. These will be available through your insurance carrier once you are on COBRA. Additionally, bill pay for COBRA will not take place on the TriNet platform, but on https://www.billerpayments.com/gwp/trinetthree

Miscellaneous

The use of a nondisparagement clauses in a waiver of claims agreement is becoming less common because the provisions are very difficult to enforce and many states including New York have discouraged their use. While the CS&S legal team is able to draft a provision, it is unlikely to be of much utility. Contact fsp at codeforsociety.org if you would like to pursue such a provision.