Question of the Month: A new employee is reaching the end of his probationary period; however, we are still unsure if he is a good fit for our company. Can we extend his probationary period?
Answer: Yes. A probationary period is a set amount of time where a company may assess a new employee and determine whether the employee meets workplace expectations and, among other issues, whether he or she is capable of completing necessary tasks and responsibilities. However, probationary periods can generally be extended and usually occur where there is a change in responsibilities or supervisor, when leave is taken during the probationary period, or the employer has concerns with the employee’s performance, attendance, or conduct.
A best practice is to clearly outline the terms of any probationary period (and the potential that it may be extended) in any applicable workplace policy. The employee’s manager should also discuss options and expectations with the probationary employee. He or she should clearly explain why the extension was necessary and allot sufficient time to correct any deficiencies, if applicable.
Importantly, probationary periods must be applied and extended in a nondiscriminatory manner (without consideration of race, gender, or other protected class status) and consistently throughout the workforce. To do otherwise could easily trigger an employee’s right to claim your company discriminated against him or her on the basis of a protected status. Please note that group health plans and insurers are prohibited from imposing a waiting period for employee eligibility to enroll in group health benefits exceeding 90 days, with provisions for a “bona fide employment-based orientation period of up to month” before eligibility is triggered. Even if you extend the probationary period for performance reasons, you may need to offer group health benefits under these rules, so check your benefits provisions carefully and consult with your broker. Keep in mind that if the probationary period is included in the terms of an employment contract, you must abide by those terms as well.
For questions on this topic or any other insurance related questions, please contact us.