Can an employer establish different probationary periods for new employees?
UPDATED: February 20, 2013
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Employers have a wide variety of choices in setting employment probationary periods, including a right to establish different probationary periods for new employees. During these times, an employee can be terminated with or without cause. One of the advantages to the employer of having such a period is being able to save special benefits (e.g. - retirement plans) for employees that have proven themselves.
Probationary Periods and the Law
While it is not against the law for different probationary periods to be established for different employees (or different categories of employees), this selectivity may make the employer vulnerable to a claim of discrimination. Therefore, an employer should be prepared to justify any differences in probationary periods between employees. The federal government provides a good legal example of wide variance in setting probation periods, with probation's ranging from 1-3 years depending on the circumstances.
However, just because employment is ‘probationary,’ does not mean the probationary employee has no rights. In many ways, there is little real difference between a probationary period employee and a regular employee. The advantages for both are the understanding that the relationship is not necessarily permanent, and the understanding that employee will be rewarded for good work. Disadvantages for both include the cost and time associated with having more than one evaluation period (it's common to have one for hiring and one for the transition to regular employment).
Employers who discharge probationary employees also may benefit by limiting payments to workers’ compensation funds charged to the employer, or by not having to contribute to a preferred, permanent employee’s education, vacation, medical insurance, or 401K.
State Laws and Probationary Periods
Almost every single American state follows the "at will" employment principle, meaning that both the employer and the employee have the right to end the employment relationship between them, for any reason or for no reason at all. This is only a principle though, with some major exceptions written into the law of various states. But in this context, even a “probationary” period is often simply seen as a way to keep focus on an employee's "best behavior." Some state courts have even allowed probation periods to be extended, based on mutual agreement between the employer and employee.
Montana is the only US state that specifically shifts the burden of wrongful firing by giving almost any employee the possibility of suing for termination without cause. But even Montana does not protect employees during a probationary period, and the law presumes a minimum period of probation to be six months.
California is one of the leading states in protecting all classes of workers from at-will firing. The reality of potential lawsuits exists in every other state because of the common existence of contracts between an employer and the employee: even with a probationary employee. California courts, for example, have held that an employee handbook may be a contract. Further, both California and other states have similar rules protecting an employee from being fired “in violation of public policy.”
The bottom line is that even though probationary employees do have some protections from firing, the right to be free from an extended or different probationary period than someone else is not one of them.