Many employers have a 90-day introductory or probationary period.  During that time, the employer and the employee are supposed to evaluate each other and determine if they’re each satisfied with the employment relationship.  If they are, the employee stays and often gets more benefits, including health care coverage, and maybe accrued vacation and/or paid holidays.  If either is unhappy, the employment terminates.  There has always been some sort of prize for making it through the 90-day introductory period.

As many employers have realized, employers can no longer wait 90 days to provide healthcare in California.  That is because California has a “special” version of the Affordable Care Act where the maximum eligibility waiting period after date of hire is 60 days, not 90.  Of course things must be different here!

So how does that impact the introductory period?  In reality, it messes it up.

You can still have a 90-day introductory period, but you have to give healthcare benefits after no more than 60 days.  In fact, many employers are starting benefits at the first day of the month following 30 days of employment.  So getting benefits is no longer a prize to employees who pass probation.  Sure you can give health care benefits at one date, and hold off on accruing paid vacation or getting paid holidays until after probation, but that isn’t as much of a prize as it used to be.  Plus, terminating someone with healthcare benefits is more costly and administratively burdensome than terminating someone without them.

Another option is to change your introductory period to 60 days, and to maintain the synchronization of the two.

With either option, the practical impact is that California employers should implement steps to evaluate their new hires more quickly, preferably within the first 30 days, rather than waiting a full 60 or 90 days.  Remember that firing someone during probation does not mean you can skip documenting performance problems.  In fact, some documentation of your objective reasons for termination is always advisable.

Waiting until day 89 to evaluate a new hire has never been a good practice.  The timing requirements for healthcare coverage in California have just made that practice even less productive.

Bottom-line: Hire carefully, and if someone isn’t working out, the best strategy is to document it early and move them out quickly.