We are planning to terminate a part time accounting assistnat from Canada due to too many errors requiring too much time reviewing and correcting her work. 

Unfortunately, she has just paid an immigration attorney to help renew her temporary work visa (good for a year), which is employer specific for our company.  She did not need to use an attorney when she got her visa a year ago – was able to do it with the U.S. Immigration officers at the Canadian border entry station but evidently the U.S. Immigration/Homeland Security guys are now questioning her qualifying accounting education, photocopy of a transcript instead of original, etc.  She and her husband decided to use the attorney here in Boston that her husband has used in getting his permits/visa.  We didn’t suggest using an attorney – she just said she was doing it.  And she has not asked if the company would pay any of it.

We wouldn’t normally give severance pay with a part time employee being terminated for work quality issues.  But, do you think it would OK under these circumstances to give a small payment as part of her legal cost, either as severance or some other payment? I guess the supervisor feels badly that he's terminating her after she's incurred the expense of a lawyer, even though it was her own initiative.  But we would hate for this to come back and haunt us.  Partly, he feels he just made a bad hire.

I have to ask if her sub-par performance has been documented and have progressive steps been taken? Does she know she is not performing up to the necessary standards? I am not certain why you are considering a servence. Is this employee in any protected class? We've all made poor hiring decisions. However, we wouldn't offer a severance under those circumstances. I could understand you and her supervisor feeling bad if she hadn't received the proper coaching and training. Is it possible she doens't even know you are unhappy with her performance?

First -- I would never pay any severance pay without getting a release agreement as part of the plan.  Wouldn't you hate to get sued by a person you paid to leave? 

Let's sort out this situation a bit:

Things that have no bearing to a release and settlement decision:

1. Status as a non-American
2. To-be-separated individual's personal spending habits and decisions

Things that have a bearing on a release and settlement agreement:

1. Past practice
2. Policy 
3. Risks associated with the termination
4. Cause of termination

Since the person's nationality and spending issues are not part of a typical decision to offer a release and settlement agreement, let's review the things that typically do matter.

1. Past Practice -- do you have a past practice of offering RSAs to people in similar circumstances?
2. Policy -- do you have a policy that addresses RSAs?  If so, what is it?  Follow it if it's clear.  Let us know if it's not and we can maybe help you better understand what to do given existing policy.
3. Risks Associated With the Termination -- this sounds like a standard work performance termination.  Was it done correctly as VDavidson discussed?  Was there a progression from training to verbal coaching/counseling to documented disciplinary warnings?  If the termination is clean and for poor performance, is it possible that the case can be made that the termination would appear to be discriminatory or otherwise expose the company to reasonable threats of litigation?  For example, imagine that this is the only person in your company over 40 and let's consider that she may also be dowdy, and further suppose you happen to replace her with a 23 year old bombshell.  That could appear to be age and/or sex discrimination even if the termination was made for good cause and the 23 year old bombshell was the best qualified candidated on paper alone.  All these things, from the context of the termination to the context of the replacement play into the calculus of risk assessment.
4. Cause of Termination -- This is not some no-fault-of-your-own layoff.  This is not an exercise of at-will doctrine in the extreme.  This is a termination for poor performance, possibly connected to the individual having misrepresented her knowledge, skills, and abilities during the hiring process.  Do you really want to establish a history of paying poor performers to leave?

Thanks.  She was terminated for poor performance.    She went home, got angry, and started sending us emails threatening a lawsuit (because she'd hired an attorney, and we knew about it before terminating her.)  She felt her performance wasn't that bad.  As far as I know, she is not legal to work in this country at this time.  She originally had this right, but when it came time for renewal, she was unable to renew.  That's why she and her husband hired an attorney, which gave her the right to work for us pending an appeal. By the way, she was a young woman.

On the advice of our attorney, we sent her 1 letter (not email) in response to her rash of angry and threatening emails to us saying again that she was terminated for poor performance.  (She was angry because she said we didn't tell her about the mistakes she was ultimately fired for, which is true because they were found a month and more afterward - and had affected our financial picture.)  We didn't go into detail.  Though it was sudden for her, it really wasn't.  She had been told of previous mistakes she'd made, her reviews were not great, but apparently it didn't sink in that her performance had to improve. 

The severance pay idea came up because her supervisor, our comptroller, felt badly for her because she had paid for an attorney. We did decide that severance wasn't appropriate though.  (We don't have a severance policy, but have paid it for layoffs with a required signed release.  It hasn't happened very often.)

 This person had an "entitled" attitude to the extreme. She was an HR nightmare, though I tried very hard to work with her.  Maybe it's not because she was from Canada, but she kept comparing the US (bad) to Canada (good), and it really made me wonder if all Canadians have "entitlement" issues.