Letter of Termination of Employment: Everything You Need to Know
Letter of termination of employment also called an employee termination letter or letter to fire an employee, is created to inform employee their job is ending.3 min read
Letter of Termination of Employment
A letter of termination of employment, also called an employee termination letter, pink slip, or letter to fire an employee, is created to inform an employee their job is ending and explain the reasons for the decision. Before you send an employee a letter of termination, inform them verbally of the action in person during a private meeting.
What a Termination Letter Does
A termination letter clearly explains why the termination is being initiated. The letter is a written record of the termination for both the employer and employee which is important if any legal action is initiated.
Information Needed to Create a Termination Letter
Demographic data, paycheck and benefits details, and the reason(s) for termination are all necessary information to compose a letter of termination.
Basic Demographic Information
- The name of the person being terminated
- The name of the company for which the employee works
- The name of the person who made the decision for termination
- The date the letter was written
- The date the termination goes into effect
- The dates of reviews and warnings and if these were presented verbally, in writing, or both
Paycheck and Benefits Details
- The date the exiting employee will be paid through
- If the final paycheck will be presented in person, sent by mail, or through direct deposit
- How retirement savings or other company related funds will be disbursed
- The date health benefits will terminate
- How accrued vacation, sick days or other benefits will be paid out
- The process for returning company property that the employee used during their employment
Reason(s) For Termination
- Layoff due to company finances and/or reorganization
- Poor performance
- Excessive tardiness
- Excessive absenteeism
- Verbal abuse
Types of Letters of Termination of Employment
An employment termination letter provides comprehensive and detailed reasons for the termination for the benefit of the employee and is also necessary if a terminated employee applies for unemployment compensation benefits. Make sure letters of termination are legal, ethical and reasonable to all parties involved.
A layoff letter explains that the termination is due to the company having to reduce its workforce by laying off employees due to financial factors.
Termination for Cause
A termination for cause letter details how an employee made severe errors, actions or judgments which were so harsh that the employer determines it would be best for everyone involved to immediately terminate the employee's job and have them escorted from the location with someone from the management team.
Termination for Poor Performance
A letter of termination for poor performance fully explains how the employee failed to meet performance standards.
Termination for Poor Attendance
A letter of termination for poor attendance outlines the dates, frequency, and explanations given by the employee for being absent.
Termination for Not Being Able To Perform New Responsibilities
A letter of termination for not being able to perform new responsibilities describes how an employee has been unable to learn new methods or tasks even with the greatest efforts to educate, coach, and counsel the employee in mastering the new responsibilities.
Tips on Writing an Employment Termination Letter
- Stay focused on the reason for termination, avoid including non-related incidents, and remain unbiased.
- Use company letterhead and compose the letter in an appropriate business letter format free of errors or typos.
- Review the legal guidelines and details of the reasons for termination before initiating the process and writing the letter.
- Keep the wording of the letter respectful, professional, and empathetic, creating a document that would be acceptable to anyone who reads it.
- Submit the letter for review by the Human Resources or legal department before presenting it or mailing it to the employee.
- Gather related documents you may need such as documented counseling and coaching sessions, an employment contract, non-disclosure agreement, independent contractor agreement, employee handbook and any other documented evidence that the employer attempted to avoid the need for termination.
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