Are probationary periods a good idea?
While probationary periods might initially seem like a great idea – who doesn’t want a little wiggle room before starting a long-term working relationship? – they can muddy the waters surrounding at-will employment, forcing you to keep bad hires longer than necessary.
What are Probationary Periods?
A probationary period is the length of time when a new employee or an existing employee is under evaluation, receives training or extra supervision either to learn the job or improve their performance. A probationary period can be a month, two months, 90 days or even a year. The probationary period is a way for employers to cement the employment relationship, ensuring the employee will be high performing in the position. This introductory period gives an employer a window to either sever the employee relationship or reevaluate and offer more guidance.
It could be argued that probationary periods for new hires are useful to ensure both parties understand what’s expected, to see if the company culture is a good fit and to determine what level of training is required. But all this can be accomplished without a probationary period and with less headache if things go wrong.
Where Probationary Periods Go Wrong
There are three big problems with offering probationary periods.
- Probationary periods muddy the waters surrounding at-will employment. When used for hiring, probationary periods are completely redundant. Employment is already considered “at-will” in every state except Montana, meaning an employer can terminate an employee at any time for any reason, except an illegal one, or for no reason without incurring legal liability. When you implement probationary periods, you change the hiring game – and not in your favor. Since under at-will employment, all employees are subject to the same standards of employment and conduct, thus no probationary period is necessary.
- You might have to wait out the probationary period before you can get rid of an employee. Probationary periods can imply a contract is made between employer and employee. In fact, according to SHRM, some courts have ruled that the mere completion of an initial evaluation period implies contract obligations that make it more difficult for companies to discharge at will and must instead be with cause. That means you might have to hold on to a bad hire, documenting cause to let them go before the probationary period is up. The bad hire could end up staying on throughout the entire probationary period, wasting your time and resources.
- You might have to pay wages for the full probationary period if you must fire the employee. If you do fire an employee before the probationary period is over, you could be on the hook for additional weeks of wages. As mentioned above, a probationary period can insinuate an obligation to a new hire that secures their employment for the duration. If you realize the employee isn’t working out by week one but your probationary period is 90 days, you might have to pay 11 more weeks of wages. Employers are left between a rock and hard place when this happens – pay out a big chunk of money or suffer with a bad hire for weeks.
How to Protect Yourself
The best way to protect your company from the headache of probationary periods is not to have them in the first place. Instead rely on at-will employment and a clear employee policy.
Your employee handbook should be clear and include upfront language about the definition of at-will employment and that any employer/employee relationship can be terminated without cause or notice. SHRM notes to be as clear as possible when writing the policy so it can’t be interpreted against you in court.
Your employee handbook should also include a statement that policies found within the employee handbook may be modified at any time with or without notice to employees and an acknowledgment page that the employee signs either electronically or physically that is stored in the personnel file.
Use a legal service like Arcoro’s partner, myHRcounsel, to make sure your manual completely and thoroughly covers employment at-will as well as:
- Equal Opportunity Employment
- Americans with Disabilities Act
- Diversity
- Harassment
- Handling Complaints
- Conflicts of Interest
- Confidential Information
- Employment Classification
- Workplace Violence Prevention
Don’t get burned by a bad hire because you offered a probationary period. Arcoro is committed to helping our customers navigate the construction industry’s rough recruiting waters. Our customer service team can help you understand how to use your HR software modules to hire more qualified employees. And our customer newsletter is a great resource for learning how new and existing features can streamline your HR processes, saving you time and money.
Contact us today to see how Arcoro and our partners are working for you.
