Employee Limbo

“To have a boom, you have to keep your nose clean legally…”
—L. Ron Hubbard1

Mr. Hubbard defined a “cycle of action” in this way:

“Control may be subdivided into three separate parts. These parts are:


“Start-change-and-stop also comprise a:


I find it surprising, sometimes, that there are businesses that do not define the “employment cycle of action” for their employees—when their employment starts, how it continues, and when it is stopped. For example, I asked a client who was having an issue with an employee to identify that employee’s hire date.  She could not do so.  I did not understand how you could not know when an employee’s employment started.  “Well,” the client told me, “I brought her in for a working interview which went well, but I was not sure that I wanted to hire her, so I brought her back the next day, and then she just kept coming in each day and it was working out so neither of us said anything and she was working for me and I was paying her.”  The employer never communicated to the employee that her interview had been satisfactory and that she was hired.  Thus, there truly was no “start date.”

Similarly, I’ve asked clients how many employees their companies have so I can tell what employment laws might cover their business and I have had people hem and haw and then tell me that Sam’s been on disability leave for about five months, and they really don’t know if he’s coming back to work.  He’s no longer being paid, but they are not sure whether to count him as their employee or not.  I ask whether he’s been fired, and they tell me “not really.”  But, one of his friends who also works for the company told his manager that Sam said he’s not coming back to work—so maybe he quit.  When I ask whether anyone spoke to Sam about his plans, of course, the answer is no.  In other words—Sam’s employment is in a type of limbo and no one is clear as to whether his employment is currently ongoing or whether it has been stopped.  Again—the confusion stems from a lack of communication.

In another situation, an employee was certain the employer had let her go, given her her last pay check, and escorted her out of the store.  This employee was shocked when the employer called to ask why she didn’t show up to work?  The employer thought the employment was still on-going and the employee was sure she’d been fired.  Clearly there also was a communication problem in this situation.

When it comes to your employees, as with other parts of your life, it is important to define the cycle of action and know where you are in it.  Under the U.S. employment laws businesses have obligations to their employees that they do not have to those simply applying for a job (for example, providing workers’ compensation insurance).  Until an individual is hired, he or she is still an applicant and not an employee.  Although certain legal obligations, such as those under the discrimination laws, will also apply to applicants, it is important to define when employment is started so you can comply with your employment law obligations to your new employees.  By way of illustration, new employees need to complete I-9 Forms (those forms that indicate that an employee is not an illegal alien and has a right to work in the U.S.) within three days of their start-dates.  If you cannot identify an employee’s start date it is impossible to tell if your business is in compliance with this legal requirement.

It is also the case that an employer’s obligations to an individual change when that person is no longer employed—as do the individual’s obligations to the employer.  For these reasons, it is important that employers have clear communications with their employees about their start dates and their termination dates.  Most states do not require “pink slips” or other written notification of termination—and generally us employment lawyers advise against giving detailed memos regarding the reason for termination—but the communication of any termination to employees needs to be clear.

By having clear parameters of the status of the employment relationship employers have greater control over their employees and their business.

1. Article of 1 September, 1965

2. Article, circa 1957.

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