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The Arizona Civil Rights Act prohibits employment discrimination based on sex (AZ Rev. Stat. Sec. 1461et seq.). Discrimination based on sex generally includes maternity and pregnancy. The Act covers employers with 15 or more employees. Employers with 15 or more employees are also covered by the Pregnancy Discrimination Act.
Since you only have two employees the discrimination act would not be applied to you,
in terms of avoiding any unemployment claim or
lawsuit, I would offer the employee a severance and have her sign a release,
waiving her rights to bring any legal action against you
That is common,
she can be given unemployment benefits if terminated for poor performance, she would not be able to obtain benefits if she resigned,
so if you draft a severance agreement stating she is resigning, and offer her a severance,
that would avoid all issues.
The severance would be conditioned on her stating she resigned,
and she will not bring any lawsuit.
If you do not want to provide a severance, you can terminate her,
however, she can be given unemployment benefits unless you can prove she was terminated for misconduct, or a violation of comapny policy
Thank you so much! I'm not planning to terminate her due to the pregnancy, just for performance issues, but I feel sorry for her financial situation and am thinking of letting her stay on until she has the baby. But since she's pregnant I know it can easily look like discrimination, so I wanted to be sure of the best way to proceed. Your answer is great and I appreciate your advice!
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