An employment termination letter provides formal notice to an employee that they’re being fired or laid off. Termination of employment is a necessary part of any business, and the responsibility falls on the employer. Even if the employer and employee have a good relationship, it’s best to get this action in writing for the company’s records.
What Is an Employment Termination Letter?
An employment termination letter is a document from an employer to an employee that informs the latter of their dismissal from their role.
Employee termination letters are important because they prove a business acted fairly and legally in terminating an employee. They finalize a termination and usually show that an employee received an opportunity to improve their performance (in the case of poor performance or misconduct).
A termination letter is also one of the final documents the employee will receive so they can learn about company policies around termination and review their next steps.
Example Termination Letter
Here’s an example of a termination letter:
RE: OFFICIAL NOTICE OF EMPLOYMENT TERMINATION
Dear Phoebe Maskin,
This letter is to inform you that as of October 31, 2023, you will no longer be employed with Raven Industries. You have been terminated because of your poor attendance at work. Our records show that you’ve received three written warnings and had two conversations with your manager in an attempt to rectify the attendance issues.
We ask you to kindly return the following company property before October 31, 2023: your company-issued laptop and cellphone.
You are entitled to payment up until October 31, 2023.
For any matter regarding health care benefits, health insurance, 401k and/or pension, please contact Katie Standhaft in the human resources department.
Your final paycheck will be in the amount of $1,500, which will be delivered to you via direct deposit.
If you choose to appeal this decision, you may contact Julien Chase in the human resources department.
You can choose to participate in an exit interview. If you wish to do so, the interview will be conducted at a place and date suitable to all parties.
What to Include in an Employee Termination Letter
Here are some of the elements to include in an employee termination letter:
- The date you’re writing the letter
- The name of the employer
- The employee’s full name
- The date their termination goes into effect
- The reason for their termination
- Corrective actions you’ve had them undergo
- A request to return company property
- A notice of the payment they’ll receive, including vacation days and severance pay if applicable
- Contact information if they have questions about health benefits or retirement plans
- A reminder of an NDA they’ve signed, if applicable
- Steps for them to take if they want to repeal the decision
- Your signature
Reasons to Fire an Employee
Here are some common reasons you may fire an employee:
The Company is Downsizing
If a company needs to reduce its workforce because it’s experiencing financial problems, you may fire multiple employees at once as part of a mass layoff. Eliminating some positions can help a company overcome financial instability and position the company for long-term success.
If you want to reduce company costs but not fire an individual permanently, consider writing a furlough letter.
The Employee Is Engaging in Poor Conduct
If an employee is failing to follow company rules, guidelines, or safety procedures while on the job, you may have to fire them. This decision often comes after an employer has tried to correct the employee’s behavior.
The Employee Isn’t Meeting Their Performance Goals
Sometimes, an employee may not have the knowledge and skills to perform their job properly. You may fire someone who is causing the rest of their team to suffer by failing to meet their performance goals.
The Employee Has Poor Attendance
If the employee regularly calls out of work or arrives late, you may state this as the reason for terminating their employment. However, employers should have clear guidelines for handling employees with poor attendance to avoid discriminatory claims.
Non-Discriminatory Firing Practices
Most states have at-will employment, so employers can usually fire employees without a reason or for any reason as long as it’s not unlawful.
Federal and state laws exist to prevent employers from firing employees for discriminatory reasons. For example, Title VII of the Civil Rights Act of 1964 prevents employers from firing employees based on discrimination as it relates to employees’ national origin, sex, religion, color, and race.
How to Fire an Employee
Firing an employee can be a difficult task for an employer. It’s a delicate process they must handle carefully to maintain professionalism.
Here’s a list of steps on how to fire an employee:
Step 1 – Understand Your Company’s Termination Process
Before you fire an employee, review your company’s termination process. Ensure the reasons for firing someone correspond to your company’s policies and confirm the reasons aren’t discriminatory.
Discuss the decision with the appropriate company department, whether it be the company’s legal team or human resources department.
Step 2 – Review the Reason
Identify and review the reason for terminating an employee. If the company hasn’t issued any kind of corrective actions yet and they’re part of your company’s termination process, implement these actions.
Set aside time to talk to the employee and explain how they can correct their behavior or performance. Give them a probation period to allow their performance to improve. Use an employee reprimand form to warn them of an impending termination if they don’t correct their performance.
If the employee fails to adjust their performance, keep records of the advice and guidance you offered in an attempt to implement change.
Step 3 – Schedule a Meeting
If you’ve exhausted corrective actions and have decided to proceed with termination, schedule an in-person meeting with the employee to deliver the news. Choose a time and day that makes sense for your company’s goals, as you may prefer to deliver the news at the end of a week versus at the beginning of a week.
Inform them of their termination verbally and provide them with a termination letter to keep for their records.
Keep the meeting short to respect the employee’s time, but be mindful that the news may affect them emotionally. Be empathetic and offer them resources if possible. Stay calm and allow them to express their feelings openly.
Employment Termination Letter Sample
View our employee termination letter template below and download it in PDF or Word format:
How to Write a Termination of Employment Letter
Here’s how to write a letter of termination:
Step 1 – Write the Letterhead
Begin by writing the letterhead. Include the date you’re writing the letter and the name and address of the employer.
Step 2 – Address the Employee
Address the employee by their full name. Use a formal salutation like “Dear.” Add their job title and employee ID number for clarification.
Step 3 – List the Termination Date
List the date the termination will take effect, as it may be different from the date you write the letter.
Step 4 – Provide the Reason for Dismissal
It’s advisable to include the reasons or events that led to an individual’s dismissal. If there are previous warnings (verbal or written), you should state them in the termination letter.
Make sure you take into account any relevant evidence that supports the dismissal to avoid confusion.
While you can choose not to include a reason if you and the employee have an at-will employment contract, you should still consider including a reason to be respectful of the employee’s time at the company.
Step 5 – Request the Return of Company Property
Highlight any company property the employee is expected to return to their line manager or the HR department, such as a company cell phone, car, laptop, badge, or keys.
Step 6 – Include Any Employee Benefits Owed
Always clarify the compensation and other benefits an employee will receive during dismissal. A termination of employment letter can include details regarding one’s final paycheck, severance pay, 401(k), unused leave days, and health benefits.
Step 7 – Spotlight All Legal Agreements
Reminding employees about all documents they signed during onboarding or their employment is critical, such as non-disclosure and non-compete agreements. This way, they won’t share company information with competitors or the general public.
Step 8 – Provide a Dispute Method
Give employees steps to follow if they want to appeal the company’s decision to terminate their employment.
Step 9 – Offer the Opportunity for an Exit Interview
Provide the employee with an opportunity to participate in an exit interview. This interview can let the employee share their thoughts on how the company can improve in the future. Encourage this opportunity, but make it clear that it’s optional.
Step 10 – Sign the Letter
The person in charge of the termination should sign the termination letter right after the word “Sincerely.”
Frequently Asked Questions
How do I inform an employee about termination?
You can use a termination letter to inform an employee about termination.
It’s appropriate to give the employee their termination letter during a face-to-face meeting, as this allows you to document the meeting and carry out the process in a way that promotes professionalism and sensitivity.
Does an employee need to sign a termination letter?
A termination letter simply acts as a notice, so it doesn’t require the employee’s signature.
What is the minimum notice period for termination of employment?
Unless the employee is under contract or covered by a union agreement, you’re not required to give notice to an employee before termination of employment.
However, under the Worker Adjustment and Retraining Notification Act (WARN), employers with 100 or more employees must provide at least 60 calendar days advance written notice of a plant closing and mass layoff affecting 50 or more employees at a single site of employment.