A termination letter is a formal document that informs an employee of a company’s decision to terminate their employment. It is also used as an official business record containing the details of the termination and generally includes the date and reason for the termination, as well as information on the final paycheck and benefits continuation, severance (if applicable), and the return of company property.
The best way to deliver a termination letter is in person, but if that’s not possible, then send it by certified mail so that you have verification that the person received the letter. We have provided four termination letter templates for you to use as necessary; each one is customizable to your specific needs and termination situation.
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For help with termination and creating policies consider using Bambee. It provides a dedicated HR manager who can give expert termination advice and help you put together any documentation you may need for $99 a month.
Thank you for downloading!
For help with termination and creating policies consider using Bambee. It provides a dedicated HR manager who can give expert termination advice and help you put together any documentation you may need for $99 a month.
Thank you for downloading!
For help with termination and creating policies consider using Bambee. It provides a dedicated HR manager who can give expert termination advice and help you put together any documentation you may need for $99 a month.
Thank you for downloading!
For help with termination and creating policies consider using Bambee. It provides a dedicated HR manager who can give expert termination advice and help you put together any documentation you may need for $99 a month.
What to Include in a Termination Letter
In addition to notifying an employee that their job with the company has ended, a termination of employment letter puts closure on the situation and gives you the chance to lay out additional information, some of which may be required by law. It’s a professional move that can help your company keep a good reputation and maintain compliance.
Be sure to check with your employment lawyer to ensure you comply with all local labor laws and not say anything that could get your company into trouble. It is important to avoid getting into too much detail about why the employee was terminated—keep both the termination discussion and employment termination letter brief.
Include the following information in your termination letter:
Termination Date
The termination date is important because there should be no ambiguity about the employee’s last day, which could be the same day you speak with the employee and give them the termination letter. It also specifies the last day the employee will be paid.
Example Wording: This letter is to inform you that your employment with [Company Name] is terminated effective as of [Date].
Reason for Termination
If you are providing a reason, be sure to state it clearly but briefly. If, for instance, you are terminating an employee due to workplace violence, you can cite the employee’s inappropriate behavior as grounds for immediate termination.
Example Wording: This letter is to inform you that your employment with [Company Name] (Company) is terminated effective as of [Date]. The reason for this termination is: [provide information about the incident or progressive discipline leading to termination]
Legal Information
Let the employee know their final paycheck date and provide them with details about benefits continuation and Consolidated Omnibus Reconciliation Act (COBRA) coverage. Include information about when their current benefits will end and provide contact information for any retirement benefits. If you’re offering a severance package, this will be the place to provide details.
Example Wording: Your final paycheck from the Company will be paid on [Date] and [will or will not] include payment for accrued but unused vacation/sick time. Your health insurance benefits, if applicable, will continue through [Date]. You will receive information from our plan administrator regarding your right to COBRA coverage. If you have retirement accounts with the Company, you may discuss your options by emailing [Email].
Return of Company Property
If your business provides property to help employees complete their work outside of the office, you need to clearly state in your letter of termination of employment that such property should be returned in a reasonable timeframe.
Whatever company property the employee has, list each item and detail how the employee should return those items. This may include the following:
- Work laptop
- Mobile phone
- Office keys
- Company credit cards
Example Wording: Company records indicate that you have the following Company property in your possession:
- [list items]
These items must be returned to the Company no later than [Date]. Please coordinate with [HR rep] to facilitate the return of these items.
When to Use Termination Letters
Whether your company has a policy of giving termination letters or is required to do so by your state, termination letters must be written carefully to include certain details depending on the situation. Businesses are not required to provide termination letters to employees under the Fair Labor Standards Act (FLSA), but it is good practice.
Part of the skills of a people manager includes communication, feedback, and openness—all of which come in handy when discussing an employee’s upcoming termination. Unless the situation dictates that a conversation is not possible, having a brief conversation with the employee can soften the blow and allow the employee to ask questions.
Termination With Cause
Some incidents and behavior warrant immediate termination for cause. Egregious violations of company policy, workplace violence, and illegal behavior all qualify. Immediately terminate the individual for these reasons and then write a termination letter. This is one instance where you may conduct the in-person termination, then send the employee a letter later in the day. As stated previously, if not delivering in person, it is recommended to send the termination letter by certified mail to confirm receipt.
An employee may also be terminated for poor performance. While this can happen after a single incident, it’s usually the result of progressive discipline where the employee failed to improve. When you follow your employee management process, you can be confident that your documentation is in order, giving you a legitimate business reason for the termination and support for your termination letter.
Thank you for downloading!
For help with termination and creating policies consider using Bambee. It provides a dedicated HR manager who can give expert termination advice and help you put together any documentation you may need for $99 a month.
Termination Without Cause
If an employee has underperformed or engaged in inappropriate workplace behavior, you may choose to terminate them for a cause—but you may also choose to terminate without cause. Most companies are at-will employers, meaning that an employer can terminate an employee with or without cause at any time.
In the case of a termination without cause, keep your letter simple and professional. Let the employee know that their employment has ended and provide the date of termination along with any information about final pay. You will also want to include language that requires the employee to return any company property.
Thank you for downloading!
For help with termination and creating policies consider using Bambee. It provides a dedicated HR manager who can give expert termination advice and help you put together any documentation you may need for $99 a month.
Termination With Severance
If you choose to terminate an employee, with or without cause, you may decide to provide a severance package. This means providing additional wages to an employee, either in a lump sum or over time.
Be sure to include verbiage about the severance package in your employment termination letter. While you should keep it brief, outline the highlights of the severance package and let the employee know the date they must return the signed severance package documentation to HR.
Thank you for downloading!
For help with termination and creating policies consider using Bambee. It provides a dedicated HR manager who can give expert termination advice and help you put together any documentation you may need for $99 a month.
Layoff
A layoff occurs when a company is downsizing, restructuring, or hitting financial trouble. While an involuntary termination isn’t directly due to an employee’s inability to perform their job, most employees will take a layoff personally and figure they did something wrong.
It’s crucial to express compassion—but not remorse—in a layoff letter. Don’t apologize, and don’t say you wish it had been someone else. Keep it professional and express your appreciation for their contribution to the company.
Thank you for downloading!
For help with termination and creating policies consider using Bambee. It provides a dedicated HR manager who can give expert termination advice and help you put together any documentation you may need for $99 a month.
Termination Letter Frequently Asked Questions (FAQs)
Below are some frequently asked questions about termination letters and what that means for the employee and the employer.
Companies often choose to forego putting a termination reason in writing in an attempt to avoid a lawsuit. However, this ambiguity often creates confusion and can make a lawsuit more likely. If you have a legitimate business reason for terminating an employee and the documentation to back it up, it is recommended to include this in the termination letter.
In your separation letter, you need to convey certain information, but nothing more. You don’t have to be heartless, but you don’t want to include too much detail. The best advice is to keep the termination letter sterile and direct as you are less likely to state something that could put your company in legal trouble.
This depends on the type of termination an employee receives. Being fired means that your employment with a company is terminated immediately without any additional compensation (other than required by law). Being let go with a severance package is being terminated with compensation. It is an extension of wages after the employee is terminated.
While both terms mean you are no longer employed with the company, being fired carries a heavier weight than being terminated with pay.
Some states require that you provide your employees with a termination letter upon letting them go from your business. Currently, about 20 states have laws that require employers to provide this specific notice. Learn more here.
Do not allude to, discuss, or write that an employee is being terminated for a discriminatory reason. While at-will employment gives you the right to terminate an employee at any time and for any reason, it is only allowed provided that the real reason for termination is non-discriminatory. In the event of a wrongful termination lawsuit, having the termination letter provides evidence of the dismissal, the date, and the reason.
Bottom Line
Terminating an employee is not easy, but every business has to do it from time to time. Maintaining professionalism and focusing on your business can make the termination letter seem sterile, but that’s for the good of your company. As a result, you show the departing employee you have no hard feelings and maintain your company’s reputation.