Are probationary periods legal? What are the pros and cons?

There is no state or federal law that prohibits employers from establishing a probationary period. The primary reason for classifying new hires as “probationary” is to let them know that they will be subject to scrutiny and must meet expectations to become “regular” employees.

The status has no legal significance because all employees (in all states except Montana) are at-will, and most employment laws simply define an employee as someone who works for an employer. A classification such as “probationary” is simply a way for employers to define or clarify the relationship.

The problem with using the term probationary is that employees might mistakenly believe that once they have completed the probationary period, they can no longer be fired except for cause. The at-will nature of employment doesn’t end with the probationary period, but some employees may not understand this.

Many employment law attorneys advise against calling the initial period a probationary period because it is so often misunderstood. Instead, employers may use terms such as “initial” or “introductory” period, not because those words have a specific legal meaning, but because they are less likely to cause confusion.

No matter what the initial period is called, employers should be clear that completing the period does not change the employment-at-will relationship and that either party may terminate the employment relationship at any time, with or without notice. This information should be provided in addition to a disclaimer in the employee handbook.

The duration of an introductory period may differ depending on the nature of the job and company culture. Very short periods (such as two weeks) would be unusual. More commonly, the introductory period would be at least three months, though many employers use six months. For a more complex job, the introductory period might be a full year, but this would be unusual. Employers should be able to determine whether or not to keep an employee within six months, even if job training continues beyond that time.