Should You Fire an Employee Who Lies? 5 factors to consider before handing over a pink slip because of a white lie.

Your trusted assistant exaggerated the experience section of his resume. Your top sales producer lied to you about a client's order status to cover her butt. The most obvious solution is to fire the liar, but is that always the best course of action?

Not necessarily, says Chicago human resources attorney Charles A. Krugel. There may be a difference between an employee who fudges the truth and one who puts your business in jeopardy or exposes you to liability. Firing a longtime employee because she said she had a college degree when, in reality, she was a few credits short might needlessly incur costs after she's proven herself to be a trusted member of the team.

"It's not a scientific type of process," Krugel says. "I don't see anything wrong with an employer taking a broad, down-the-line approach, saying, "If anybody lies to us, it's likely to happen again,' [and firing that employee.] But some employers, take the approach that, "We've seen [lying] happen in worse cases, or worse instances, with worse results, and we think this person still might be a safe bet.'"

If you're on the fence about how to deal with a lying employee, think about these five questions to help you make up your mind.

Why did the person lie?
If the person was under duress or made a bad decision, it might be forgivable. Krugel advises meeting with the employee and finding out the rationale for the lie. For example, if your salesperson fibbed about the order status because she was afraid of getting in hot water, explaining your expectations to her might be the simple correction needed to end that behavior.

Is the lying part of a pattern or was it a one-time error in judgment?
A first offense is more likely to be forgivable than repeated untruths. If you explain that lying is unacceptable in your firm and the employee still won't tell the truth, it's probably time to take more serious action.

How serious was the lie?
If the lie exposed your company to possible prosecution or risk, the situation can be serious. In such cases, keeping the employee could be considered negligent. For example, if a team member lies about things like taking action required for industry regulatory compliance or employee harassment, it's best to consult your attorney about how to best protect your firm from risk rather than overlooking the lie.

Can you trust him or her again?
Krugel says this is usually pure gut check. Do you feel like you can trust the employee again? If so, you may be able to work it out.

What impact will your decision have on other employees?
It's important not to set a precedent that it's okay to lie, Krugel says. If you decide to keep the employee, some sort of apology or mea culpa either to all of the employees or the people directly affected by the lie might be a good idea. Krugel has worked on cases where a lying employee was demoted or otherwise disciplined, which sent a strong message to other people in the office.

"A company is always has to balance being a good employer to one person with how it's going to impact the rest of the workforce, and the perception the other person's coworkers will have," he says.