Updated August 17, 2020: 

What Is a 90-day Probation Period for New Hires?

A 90-day probation period for new hires is a defined period of time during which a new employee receives added management and education to learn a new job.

The Purpose of a Probationary Period

The purpose of a probationary period for new hires is to postpone or adjust the customary employment rules for an employee who is learning about and adapting to a new job. It’s a period dedicated to helping the new employee be trained for the position in a learning environment.

Initial Employment Probationary Periods

Probationary periods are typically used by a company that has collective bargaining agreements with unions requiring employers to have “cause” to terminate an employee. Some companies use a probationary period to reflect their benefit waiting periods.

Probationary periods are nearly always suitable in union environments, but in non-union environments, probationary periods are only fitting if an employer can identify noteworthy differences between an employee on probation and an employee who is past it.

If a company has no reason or program for a probationary period, a good option is to consider implementing an initial review period where the supervisor or manager can offer standard, planned, productive feedback to the new employee.

Opportunities and Risks of Employment Probationary Periods

A number of companies pay new hires less during the 90-day probationary period. Often benefits aren’t available during the first 90 days of employment.

Some companies pay the agreed-upon salary rate during the first 90 days, but then choose to reclassify them as temporary workers. This reclassification makes those employees disqualified for severance and unemployment insurance benefits.

If an employee is terminated during the 90-day probationary period, they would still qualify for unemployment insurance benefits, but the length of employment could be a factor in calculating how much the employer will be monetarily impacted by the employee’s unemployment claim.

The fact that an individual was terminated during an introductory period would not disqualify the employee from unemployment benefits, and the same rules regarding eligibility for unemployment still apply.

In the United States, employment relationships are acknowledged to be at-will in all states except Montana, where employers can usually only terminate employees for good cause once the employee has completed the employer’s probationary period.

For that reason, it's important that any of your employment documents like the employee handbook, evaluation reports, employee development plans, hiring regulations and rules, etc. clearly mention and define the probationary period. It's also important to educate all employees on the probationary period, specifically as it relates to the employer's right to fire any employee during that time for any reason. As long as your company's documentation clearly defines and states these terms, your probationary period is in good-standing. If an employer promises an employee something that is inconsistent with the at-will employment guidelines mentioned above, they can lose the right to the probationary period.

Tips for Successful Use of Probationary Policies

The employer should clearly communicate with the new employee about the 90-day probationary period regarding what is expected of the employee during that time.

A reputable and qualified mentor should advise the employee on policies and procedures, train them in equipment operation as necessary, and provide them with adequate training and other resources.

A direct manager or supervisor should conduct customary intermittent reviews with the employee to provide constructive criticism and counseling.

All parties involved in orienting the new employee should get advice from the human resources or legal department to ensure the new hire is being treated equitably and given appropriate leadership.

Coaching efforts, employee performance comments, and provided training during the 90-day probationary period should be carefully and fully documented.

Common Misconceptions About Probationary Periods

Employees often believe that once they successfully complete a 90-day probationary period that their risk of termination disappears. This misconception can lead to an increased threat of wrongful termination lawsuits if the employee is fired after that 90-day stretch.

Another common misunderstanding by new employees is that the probationary period means that they are instantly placed on a corrective action plan on the first day of employment, a misconception that could harmfully impact the employee’s view of the company.

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