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HUMAN RESOURCES

Why You Need to Get Rid of Employee Probationary Periods

Did you know that you might unwittingly be making a contract with your employee?

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I don't understand why companies insist on having probationary periods. Usually these are 30 or 90 or even 180 days where extra feedback is given and employees are warned that they can be terminated. Employees breathe a sigh of relief when the probationary period has passed, because now they are PERMANENT employees who can only be fired for cause.

Wait. What? You didn't want to make a contract with your employees when you ended their probationary period? You wanted them to remain "at-will" employees, so they can quit or you can fire them at any time for any reason or no reason? While most people don't terminate employees for "any reason," you want the freedom to do that if you need to. (That "any reason" should have a footnote to state that you can't fire someone for an illegal reason, such as race, gender, pregnancy, or things prohibited by your local state/county/town.) That means you don't want your employees to be under contract.

Okay, admittedly, just the fact that you have a probationary period doesn't automatically mean that your employees are under contract as soon as they pass the probationary period. But, it can mean that if you aren't careful. Courts can conclude that you made a verbal contract or even that your handbook says the employee is now a contracted employee if you haven't written it carefully.

So, a better solution is to bag the probationary period altogether. If you've hired someone, you've hired someone. Don't differentiate between your new hires and your long term employees. Don't give them the idea that their status is more "permanent" after 90 days or what have you.

There are, of course, some exceptions to this. If you have a union contract or a local ordinance that you are subject to, you have to follow that. If you choose not to offer benefits until someone has been there a certain amount of time, then make sure your documentation is written to properly reflect that after 90 days they become eligible for benefits but that they will always remain at-will. This is a common practice in industries with high turnover, such as retail. (How the new health care regulations change all this, I don't know.)

It's fine to say things such as, "you can't take vacation until you've been here six months," or "you cannot post for an internal transfer until you've been here one year." But just make sure you never say, write, or imply that after a certain time period, their employment is permanent. Because you do not want that. And permanent is the opposite of probationary, so when the probationary period is ended, employees assume permanent.

As always, you need a handbook. You need your handbook to be reviewed by a labor and employment lawyer (not me, I'm not a lawyer, and not the guy who incorporated your business, helped you close on your house, or wrote your will). It needs to be clear that employment is at will. If you want to do a 90 day review, super. Personally, I'd prefer it if you provided more frequent feedback to all your employees. You don't need them to have a probationary period to do it.

Have a problem employee, a best practice question, or just can't afford an HR manager right now? Send your questions to EvilHRLady@gmail.com.

Last updated: Apr 24, 2013

SUZANNE LUCAS | Columnist

Suzanne Lucas spent 10 years in corporate human resources, where she hired, fired, managed the numbers, and double-checked with the lawyers.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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