Employment Termination Letter Template
The “Pink Slip”
Sometimes, it is just time to move on. Employee turnover is just part of the business. A written termination letter is just as crucial as an offer letter during the initial hiring process. A termination letter is a formal letter from an employer to an employee terminating the employment relationship.
Here’s what you will find in this termination letter template:
- A simple termination letter template for an employer to an employee informing them of their dismissal from employment.
- Sections to detail the reason for termination, effective date, and other obligations once the employment relationship has ended.
- Drafting a termination letter using one of our templates can save you valuable time and money. It can also decrease the expense of hiring a lawyer.
- Other names for a termination letter include separation letter, notice of dismissal, termination notice, notice of termination, employment termination letter, employee termination letter, separation notice, etc.
Please note: this termination letter is more specifically geared towards full time employees, if you’re looking for a template for contracts, we’ve got this option as well: Contractor Termination Letter
Why do I need a Termination Letter?
There is no requirement to issue termination letters. However, it is an essential business practice. It can shield employers from potential liability. It eliminates confusion between the parties that may arise after the termination as to why they were dismissed.
The Importance of a Termination Letter
A termination letter formalizes the dismissal process. It can be kept on file and be used as evidence in the event any questions surrounding the termination surface. The letter contains information such as the employee’s information, details related to any affected benefits, final paychecks, commissions owed, and other obligations related to any employment agreement the parties are bound by.
Termination letters can also provide details as to whether the employer plans to offer an employee with a severance package. If so, the severance pay and the severance agreement should be attached to the termination letter.
3 Events that Trigger a Termination Letter
A termination letter should be a routine part of your business practices. There are three main events that trigger a termination letter.
- End of a Contract – This is simply when a contract between an employer and employee has ended, effectively termination the employer-employee relationship.
- With Cause – This could be for an employee who has been written up several times related to an employee’s poor performance or behavior. An employer usually has a policy in place, stating the number of writeups that lead to the dismissal of employment. It is critical to attach evidence to support your decision for termination (copies of warning letters, writeups, etc.)
- Without Cause – This is commonly found when a company is forced to downsize, leading to layoffs. These are not related to performance issues.
Looking for a Termination letter for a contractor? Download it here.
Are there any deadlines or times when a termination letter is needed?
A termination letter should be prepared and delivered upon the employee’s official termination. The letter can be provided shortly before the separation, where the letter provides an official termination date and the employee’s last day of employment.
The employee should have an opportunity to review the letter and address any concerns they may have. It is not uncommon for a company to have a human resources manager sit in on a termination meeting and witness the employer and employee’s signature. The human resources manager will usually also sign the letter. It is not required but is just an extra security measure and formality.
How to Draft a Termination Letter – 8 Essential Components
A termination letter is a fairly straightforward document memorializing the employee’s termination.
- The Basics – A termination letter should include the employee’s legal name and the company’s name.
- Official Termination Date – This is a critical piece of a termination letter. It is the official termination date. The employee may need this information for benefits such as unemployment, and it also protects the employer from any disputes related to the official termination date.
- The Reason – This is another a vital part of a termination letter. It should clearly express the official reason (end of the contract, with cause, without cause, etc.).
- Final Paycheck, Commissions, and Benefits – Is the employee still owed commissions or wages? If so, the amount and date of the final paycheck should be written in the letter. Also, if there are any benefits that they may receive and when they terminate. Healthcare benefits (COBRA), or 401K benefits, or unused vacation reimbursement).
- Company Property – Some companies provide equipment to their employees, such as laptops or cell phones. If applicable, the letter should detail the items the employee has in their possession and when they should be returned. It is important to attach the company property sheet usually filled out during the onboarding process and proof of the employee’s possession of the property.
- Respect Terms of Employment Agreement – Did the parties sign an employment agreement? If so, the employee should be reminded of the terms they agreed to (non-compete, non-disclosure, confidentiality). All agreements should be attached to the letter to ensure the employee is aware of their obligations.
- Human Resources Information – If the company has a human resources department or human resources manager, their information should be included or attached to the letter if the employee needs copies of documents or has any questions after their termination.
- Signatures – Don’t forget the signatures. The parties should sign and date the letter. If there is a witness or human resource personnel, their signature should also be included in the termination letter.
Common Mistakes in Termination Letters
A termination letter should be tailored to your specific needs. The letter should be customized to the situation as to the reason for the termination, the terms of an employment agreement, pay, and other vital information.
Terminating one’s employment is, without a doubt, an uncomfortable situation. It is important to be aware of the employee’s feelings.
Employment laws vary from state to state, and there are also federal laws that govern employment law. It is critical to contact an attorney to discuss employment law parameters and ensure you are in compliance with the laws, following the company’s employee handbook and any progressive discipline policies in place.
How to Get a Termination Letter Signed
So, you have created a termination letter – good job! Now, you are ready for the signatures. The parties can review the termination letter at their convenience and sign it when they are ready. The parties are then provided with a signed copy for their records, saving time and money.
ApproveMe’s WP E-Signature plugin is a convenient way to get your termination letter signed. ApproveMe has perfected its security measures to protect your data and keep your information safe and confidential. ApproveMe is easy to use and eliminates common mistakes.
Managing employees can be a tiring process. Finding the right employee for you is important for your company’s success. Here are a few human resource-based softwares to help reduce the stress in the workplace:
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Employment Termination Letter
Employee Name (please print):____________________________________________________
Your employment with _____________________________ will be officially terminated on ___________________.
Review of the confidentiality agreement or non-compete agreement: Remember to adhere to the non-disclosure agreement, confidentiality, and/or non-compete agreement you signed upon hiring. According to this agreement, you are not permitted to disclose any company trade secrets, practices, or methods of operation. _____________________________ is entitled to take legal action if it is revealed that you disclose trade secrets during or after employment.
Return of Property: Please list and return any property of _____________________________ that you have in your possession. In addition, please provide any passwords and other information pertaining to accessing computer software and/or files.
Final paycheck: Your last paycheck will be received on ________________________.
Reason for Termination:
(HR Personnel’s signature)
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