Wisconsin Termination Laws

August 30th 2024

Termination laws in Wisconsin outline the rights and responsibilities of both employers and employees when it comes to ending an employment relationship. Understanding these laws is important for ensuring that terminations are conducted fairly and legally. This article provides a clear overview of the key aspects of Wisconsin’s termination laws.

This Guide Covers

Legal Considerations for Termination in Wisconsin
At-Will Employment in Wisconsin
Lawful Termination in Wisconsin
Legal Protections During Termination in Wisconsin
Terminated Employee Benefits in Wisconsin
Layoffs in Wisconsin
Resignations in Wisconsin
Legal Cases Related to Wrongful Termination in Wisconsin

Legal Considerations for Termination in Wisconsin

Employers must be aware of the following legal considerations when terminating an employee:

  • Anti-Discrimination Laws: Under both federal and state laws, it is illegal to terminate an employee based on race, color, religion, sex, national origin, age, or disability.
  • Retaliation Protections: Employers cannot legally terminate an employee as retaliation for engaging in protected activities, such as filing a complaint about workplace discrimination, reporting safety violations, or participating in an investigation.
  • Health Continuation Insurance: Employers must offer terminated employees the option to continue their health insurance coverage for a limited time. This ensures that employees do not immediately lose health coverage upon termination and have time to arrange alternative insurance.
  • Final Pay and Benefits: Wisconsin law requires that an employee’s final wages be paid by the next regular payday after the termination. Employers must also consider the handling of accrued benefits, such as vacation pay, depending on the company’s policies and any applicable agreements.
  • Unemployment Benefits: Employees terminated without a cause in Wisconsin may be eligible for unemployment benefits. Employers need to provide accurate information regarding the reason for termination when the employee files for these benefits, as wrongful denial can lead to legal disputes.
  • Documentation: Proper documentation is crucial during the termination process. Employers should maintain detailed records of the reasons for termination, any performance issues, and communications with the employee to protect against potential legal claims and ensure transparency.

At-Will Employment in Wisconsin

What is At-Will Employment?

At-will employment in Wisconsin means that either the employer or the employee can terminate the employment relationship for any reason or for no reason at all without prior notice. This arrangement gives employers flexibility in managing their workforce and allows employees to leave their jobs without being legally obligated to stay.

What are the Exceptions to At-Will Employment in Wisconsin?

Despite the broad scope of at-will employment, there are key exceptions in Wisconsin:

  • Discrimination: Employers cannot terminate employees based on protected characteristics such as race, gender, age, religion, disability, or other categories under state and federal anti-discrimination laws.
  • Retaliation: Employees cannot be fired for engaging in legally protected activities, such as reporting workplace safety violations, filing complaints about harassment, or exercising rights under labor laws.
  • Implied Contracts: Even without a formal written contract, statements in employee handbooks or verbal assurances by management could create an implied contract limiting an employer’s right to terminate.
  • Public Policy: Employers cannot terminate employees for reasons that violate public policy, such as firing someone for refusing to engage in illegal activities or reporting illegal behavior.

Employment Under Contract in Wisconsin

Employment under contract in Wisconsin involves a formal agreement between an employer and an employee that outlines the terms and conditions of employment, including job responsibilities, compensation, duration of employment, and grounds for termination. Unlike at-will employment, where either party can terminate the relationship at any time, contract employment provides conditions under which termination can occur.

If an employer breaches the contract by terminating an employee without just cause or failing to uphold other agreed-upon terms, the employee may have grounds for a wrongful termination claim or other legal consequences under Wisconsin law.

Lawful Termination in Wisconsin

Legal Grounds for Termination in Wisconsin

In Wisconsin, it is legal to terminate an employee under these conditions:

  • Performance Issues: If an employee fails to meet job performance standards or fails to fulfill job responsibilities after receiving appropriate feedback and opportunities to improve.
  • Misconduct: For serious violations of company policies, such as theft, harassment, or substance abuse, provided that the misconduct is documented and the employee is aware of the rules.
  • Economic Reasons: Due to business reasons like downsizing or restructuring, where the termination is not related to the employee’s personal characteristics or actions.
  • Employment Contract: If an employment contract specifies conditions under which termination is permissible, and those conditions are met.
  • Voluntary Termination: If the employee resigns or voluntarily leaves the position, which is not considered a termination by the employer but an end of employment by choice.

Read our comprehensive guide to firing employees in Wisconsin for further information.

How Do I File a Wrongful Termination Claim in Wisconsin?

To file a wrongful termination claim in Wisconsin, employees are encouraged to gather all relevant documentation, such as employment contracts, termination notices, and any correspondence related to their dismissal.

If employees believe they were fired due to discrimination, retaliation, or another illegal reason, they can file a claim with the Wisconsin Equal Rights Division (ERD) within 300 days of their termination. Employees may also file a claim with the U.S. Equal Employment Opportunity Commission (EEOC) if their case involves federal laws, like those prohibiting discrimination based on race, gender, or age.

Both agencies will investigate the employee’s claim, and if the agencies find merit, they may offer mediation or pursue legal action on behalf of the employee.

Legal Protections During Termination in Wisconsin

When it comes to termination in Wisconsin, both federal and state laws offer protections to ensure employees are treated fairly and justly. These laws safeguard employees from being wrongfully terminated:

  • Title VII of the Civil Rights Act of 1964: Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employers from terminating employees based on race, color, religion, sex, or national origin. Employers must ensure that termination decisions are free from discriminatory practices.
  • Age Discrimination in Employment Act (ADEA): The Age of Discrimination in Employment Act (ADEA) is a federal law that protects employees aged 40 and older from being terminated due to age. Employers must avoid age discrimination in termination decisions, ensuring that older workers are not unfairly targeted.
  • Americans with Disabilities Act (ADA): The Americans with Disabilities Act (ADA) is a federal law that prohibits termination of employees based on disability and requires reasonable accommodations unless it causes undue hardship. Employers must ensure that employees are not terminated due to their disabilities or failure to accommodate them.
  • Family and Medical Leave Act (FMLA): The Family and Medical Leave Act (FMLA) is a federal law that entitles eligible employees to take unpaid leave for certain medical and family reasons without fear of termination. Employers cannot terminate employees for taking FMLA leave or retaliate against them for exercising their rights under the law.
  • Occupational Safety and Health Act (OSHA): The Occupational Safety and Health Act (OSHA) is a federal law that protects employees from termination for reporting unsafe working conditions or participating in OSHA investigations. Employers cannot retaliate against employees who exercise their rights under OSHA, including whistleblowing.
  • Uniformed Services Employment and Reemployment Rights Act (USERRA): The Uniformed Services Employment and Reemployment Rights Act (USERRA) is a federal law that protects employees from termination due to their military service obligations. Employers must allow employees who serve in the military to return to their jobs without penalty and cannot terminate them due to their military commitments.
  • Wisconsin Fair Employment Act (WFEA): The Wisconsin Fair Employment Act (WFEA) is a state law that prohibits termination based on race, creed, color, disability, marital status, sex, national origin, ancestry, and other protected characteristics. Employers must ensure that terminations are not based on any discriminatory factors outlined in the WFEA.
  • Wisconsin Wage Payment and Collection Law: The Wisconsin Wage Payment and Collection Law is a federal law designed to ensure that employees receive timely and accurate payment of their earned wages. In the case of termination, the final paycheck must be issued no later than the next regular payday following the employee’s last day of work.
  • Wisconsin Worker’s Compensation Act: The Wisconsin Worker’s Compensation Act is a state law that protects employees from termination in retaliation for filing a worker’s compensation claim. Employers are prohibited from terminating employees who seek compensation for work-related injuries or illnesses.
  • Wisconsin Business Closing and Mass Layoff Law (WBCML): The Wisconsin Business Closing and Mass Layoff Law (WBCML) is a state law that requires employers with 50 or more employees to provide 60 days’ notice before a mass layoff or business closing affecting 25 or more employees. Employers must adhere to the notice requirements to avoid penalties.
  • Wisconsin Whistleblower Law: The Wisconsin Whistleblower Law is a state law that prohibits termination in retaliation for reporting illegal activities, participating in legal proceedings, or refusing to engage in illegal conduct. Employers in Wisconsin must ensure that employees are not terminated for exercising their rights under this law.

Terminated Employee Benefits in Wisconsin

In Wisconsin, terminated employees may be entitled to various benefits and considerations, depending on the circumstances of their termination and their employment status. Terminated employees are entitled to:

  • Final Paycheck: Wisconsin law mandates that an employee’s final paycheck, including any earned wages and, if applicable, unused vacation time, must be paid by the next regular payday after termination.
  • Unemployment Benefits: Terminated employees may be eligible for unemployment benefits if they meet the state’s eligibility criteria. This generally includes being actively seeking work and having earned enough wages during the base period. Benefits are not available if the termination was due to misconduct or if the employee voluntarily left the job without good cause.
  • Severance Pay: Wisconsin law does not mandate severance pay, but some employers offer it as part of their termination policy. If severance pay is offered, it should be outlined in the company’s policy or employment contract.
  • Health Insurance Continuation: The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees to continue their health insurance for up to 18 months after job loss or other qualifying events, with a possible extension to 29 months for disability, applicable to employers with 20 or more employees. Wisconsin Mini-COBRA provides similar coverage for employees of companies with fewer than 20 employees but without the disability extension and for a maximum of 18 months. Both require employees to cover the full premium plus a 2% fee. Federal COBRA requires notification within 14 days, while Wisconsin mini-COBRA requires notification within 30 days.

Layoffs in Wisconsin

In Wisconsin, layoffs are regulated by both the federal Worker Adjustment and Retraining Notification (WARN) Act and the Wisconsin Business Closing and Mass Layoff (WBCML) Law.

The federal WARN Act mandates that employers with 100 or more full-time employees must provide at least 60 days’ notice before a plant closing or mass layoff, which affects 50 or more employees at a single site.

The WBCML Law extends similar protections but applies to businesses with as few as 50 employees, making it more strict than the federal law. Under Wisconsin law, employers must provide 60 days’ notice in cases of business closings or mass layoffs that impact 25 or more employees. The lower thresholds in Wisconsin law mean that smaller businesses are subject to these notification requirements.

Resignations in Wisconsin

In Wisconsin, resignations can be classified as either voluntary or involuntary.

Voluntary Resignations

A voluntary resignation occurs when an employee chooses to leave their job on their own accord. Wisconsin law does not require employees to provide advance notice, though giving two-week notice is customary and considered professional. Voluntary resignations can be prompted by various reasons like finding a new job, relocation, or personal circumstances. In such cases, employees do not qualify for unemployment benefits unless they can prove “good cause” related to work conditions.

Involuntary Resignations

Involuntary resignation, or constructive discharge, occurs when an employee is forced to be pressured to resign, often as an alternative to termination. This might happen in situations like disciplinary action where the employer offers resignation in lieu of firing, or due to intolerable working conditions that make continued employment unfeasible. While labelled as a resignation, these cases may be legally treated as terminations if the employee can prove they were effectively coerced or pushed out. If proven, employees could potentially qualify for unemployment benefits and have grounds for wrongful termination claims.

Legal Cases Related to Wrongful Termination in Wisconsin

1. Metal and Plastic Products Manufacturer Settles $475,000 in Discriminatory Termination Case

In the case of EEOC v. Wisconsin Plastics, Inc., a group of 22 Hmong and Hispanic employees found themselves suddenly out of work when Wisconsin Plastics, a metal and plastic products manufacturer in Green Bay, Wisconsin, fired them, citing insufficient English language skills. The employees, many of whom had been working for the company for years, were perplexed and distressed as the work they performed did not require English proficiency.

The U.S. EEOC took up the case and argued that the firings were not about job performance but rather a form of national origin discrimination. The EEOC’s investigation revealed that the employees were fully capable of performing their duties without English proficiency, making the company’s justification for termination insufficient. The case was brought to the U.S. District Court for the Eastern District of Wisconsin, where the court ruled in favor of the EEOC.

Wisconsin Plastics agreed to a settlement of $475,000 to be distributed among the affected employees. In addition to the monetary settlement, the company was required to implement significant changes, including the posting of notices about the settlement, periodic reporting of employment practices to the EEOC, and mandatory training for managers and employees to prevent future discrimination.

Key Lessons Learned from the Case:
  • Employers must carefully evaluate the true necessity of job requirements, such as language skills, to avoid potential discrimination based on national origin.
  • Discriminatory actions, even if unintended, can lead to serious legal repercussions and significant financial settlements.
  • This case underscores the importance of fair employment practices and the need for companies to ensure that all employees are treated equally, regardless of their national origin or language abilities.

2. Heating and Plumbing Contractor Settles $140,000 in Age Discrimination and Retaliation Lawsuit

In EEOC v. Stack Bros. Mechanical Contractors, Inc., two long-time employees, Randy Virta and Karen Kolodzeske, were terminated by their employer after they turned 62. Stack Bros., a leading heating and plumbing contractor in Superior, Wisconsin, had a policy that led to the termination of Vitra and the planned termination of Kolodzeske solely due to their age. Despite both employees’ warnings that such actions were illegal under the Age Discrimination in Employment Act (ADEA), the company’s owner proceeded with the terminations.

Kolodzeske, who had been with the company for 25 years, resisted her impending termination by voicing her concerns. In response, the company retaliated by creating a hostile work environment, denying her a raise, and terminating her without pay. Virta, who had worked with Stack Bros. for 16 years, was dismissed as soon as he reached 62. The EEOC filed a lawsuit on their behalf, asserting that Stack Bros. had violated federal laws protecting workers from age discrimination and retaliation.

After a legal battle, Stack Bros. agreed to settle the case for $140,000, with $95,000 awarded to Virta and $35,000 to Kolodzeske. The settlement also required the company to cover $10,000 in private attorneys’ fees and to implement training for its managers and employees to prevent future violations of the ADEA.

Key Lessons Learned from the Case:
  • Employers are prohibited from terminating employees based on their age, as it violates the ADEA, which protects workers from age discrimination.
  • Retaliation against employees who oppose discriminatory practices can lead to significant legal consequences, reinforcing the importance of maintaining a fair and lawful workplace.

Learn more about Wisconsin Labor Laws through 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.