What Is a Probationary Period?
A probationary period (sometimes called a trial period or introductory period) is a defined period at the beginning of employment during which the employer evaluates the new hire's performance, skills, and cultural fit. Probationary periods typically last between 30 and 90 days, though they can extend to 6 months for complex roles.
During the probationary period, the employer has the opportunity to assess whether the new employee meets expectations before the full benefits and protections of the employment agreement take effect. The employee, in turn, has the chance to evaluate whether the role and company are the right fit for them.
Why Include a Probationary Period
Performance Assessment
Even the best interview process cannot fully predict how a candidate will perform on the job. A probationary period provides a structured evaluation window where both parties can assess the fit with lower stakes.
Simplified Termination
During the probationary period, employers typically retain the ability to terminate the employee with a shorter notice period or no notice at all. Some agreements also exclude probationary employees from severance entitlements if terminated during this window.
Benefit Eligibility
Many employers tie benefit eligibility to the successful completion of the probationary period. Health insurance, retirement plan participation, and other benefits may not begin until the employee passes their probation. This reduces costs associated with employees who do not work out in the first few months.
Goal Setting and Feedback
A well-structured probationary period includes defined goals, milestones, and regular check-ins. This creates a framework for providing feedback and course-correcting early, improving the chances of a successful long-term hire.
Use the probationary period as a structured onboarding tool, not just an evaluation mechanism. Set clear 30/60/90-day goals, schedule regular check-ins, and provide written feedback. This approach improves retention and gives you documented evidence if termination becomes necessary.
How to Structure a Probationary Period
Duration
Common probationary periods include:
- 30 days — Suitable for hourly or lower-complexity roles where job performance can be assessed quickly
- 60 days — A middle-ground option that provides more time for evaluation
- 90 days — The most common duration, providing enough time for meaningful assessment while keeping the evaluation period manageable
- 6 months — Used for senior roles, technical positions, or roles with longer ramp-up times
The right duration depends on the complexity of the role, the time needed to demonstrate competency, and industry norms.
Performance Standards
The employment agreement should reference the performance standards that apply during the probationary period. These can be included in the agreement itself or in a separate onboarding plan. Common standards include:
- Completing required training
- Meeting defined productivity benchmarks
- Demonstrating proficiency with key tools and systems
- Receiving satisfactory evaluations from supervisors
- Completing specific projects or deliverables
Review Process
Define how and when the employee will be evaluated during the probationary period. A typical structure includes:
- Week 1-2 — Initial check-in to ensure the employee is settling in and has the resources they need
- Day 30 — First formal review against established goals
- Day 60 — Second review with additional feedback and any course corrections
- Day 90 — Final review with a decision to confirm employment, extend probation, or terminate
Extension of Probation
Sometimes an employee shows promise but has not fully met the standards by the end of the probationary period. The agreement should address whether the employer can extend the probationary period and under what conditions. Extensions are typically limited to an additional 30 to 60 days.
Benefits During the Probationary Period
Health Insurance
Under the Affordable Care Act (ACA), employers with 50 or more full-time employees must offer health insurance to full-time employees within 90 days of their start date. If your probationary period is 90 days or less, it can align with this waiting period. Probationary periods longer than 90 days may conflict with ACA requirements.
Retirement Plans
Most retirement plans allow a waiting period before an employee becomes eligible to participate. This waiting period can overlap with the probationary period. However, retirement plan eligibility is governed by the plan document, not the employment agreement.
Paid Time Off
Some employers provide reduced PTO accrual during the probationary period or do not allow PTO usage until probation is completed. Verify that any PTO restrictions comply with state and local paid leave laws, which may require accrual from the first day of employment.
Be careful about linking benefit eligibility to probationary period completion. Some state laws require certain benefits (like sick leave) to begin accruing from the first day of work, regardless of probationary status. Review the requirements in every state where you have employees.
Legal Considerations
At-Will Status
Including a probationary period does not change the at-will nature of the employment relationship (in at-will states). However, it is critical to state this explicitly in the agreement. Without clear language, an employee could argue that completing the probationary period created an implied promise of continued employment.
Include language such as: "Completion of the probationary period does not guarantee continued employment. Employment remains at-will and may be terminated at any time, with or without cause."
Discrimination Protections
Probationary employees are entitled to the same anti-discrimination protections as regular employees from their first day. Termination during the probationary period must not be based on protected characteristics such as race, gender, age, disability, religion, or national origin.
Unemployment Benefits
In most states, employees terminated during a probationary period are still eligible for unemployment benefits (assuming they meet the state's other eligibility requirements). The probationary period does not create an exception to unemployment insurance obligations.
State-Specific Requirements
Montana is unique in that it uses a probationary period as the dividing line between at-will and just-cause employment. After the probationary period (which defaults to 6 months), employers can only terminate employees for good cause.
Common Mistakes
No Clear Standards
A probationary period without defined performance standards is ineffective. If you cannot articulate what the employee needs to achieve during probation, you cannot fairly evaluate whether they met expectations.
Inconsistent Application
Applying probationary periods to some employees but not others in similar roles creates risk. Be consistent in your use of probationary periods and the standards applied during them.
Implying Job Security After Probation
Language like "after successfully completing your probation, you will become a permanent employee" can inadvertently create an implied contract. Use "regular employee" instead of "permanent employee" and reaffirm at-will status.
Ignoring the Probationary Review
If you define a probationary period but never conduct the review, you lose the benefit. Make sure managers are trained on and accountable for conducting probationary reviews on schedule.
Best Practices
- Set a clear duration that aligns with the role complexity and benefit eligibility requirements
- Define measurable performance standards that the employee can work toward
- Schedule regular check-ins throughout the probationary period
- Document everything — feedback, performance observations, and review outcomes
- Reaffirm at-will status explicitly, both during and after the probationary period
- Apply probation consistently across similar positions
- Comply with ACA and state law requirements for benefit eligibility timing
- Train managers on how to conduct effective probationary reviews
A well-designed probationary period benefits both the employer and the employee. It creates a structured framework for evaluating the new hire while providing the support and feedback they need to succeed in their new role.