Termination Letter
A termination letter or letter of separation is a formal document issued by an employer to an employee to inform them that their employment with the company is being ended.
The termination letter serves as an official record of an employee’s termination. A termination letter ensures that the separation process is clear and legally compliant for both the employer and the employee. Termination letters can be delivered by e-mail or as a printed copy.
In the U.S., 20 states require employers to issue specific forms or a written termination letter when an employee’s term of employment with an organization comes to an end. Termination letter content requirements vary by state.
A carefully crafted termination letter can protect an organization’s legal interests. However, thorough termination letters are also beneficial for employees who are being let go. A termination letter can help employees plan for their last days with a company, start a job search, and prepare for transitioning their responsibilities to other employees.
Termination Letter Example
Typically, a termination letter may include any of this information:
-
Reason for termination
-
Date of termination
-
Last date of employment
-
Vacation/PTO payout
-
Information about the return of company property
-
Process for accessing a 401(k)
-
Date of last paycheck
-
Last date of benefits
-
Information about accessing pay stubs
-
Reference to COBRA insurance rights
-
Date of exit interview
-
Reminders about noncompete or confidentiality agreements signed by the employee
-
Other pertinent details regarding final pay and benefits
Related Terms
Severance Agreement
is a term that refers to a contract between an employer and an employee. A severance agreement typically includes details on severance pay, continuation of benefits, and other post-employment provisions.
Dismissal Letter
refers to a written communication provided to an employee by an employer to inform them that they are being discharged from their position with the company.
Layoff Notice
is a term that refers to a formal notification given to employees when they are temporarily or permanently laid off because of business circumstances. These circumstances can include financial difficulties or downsizing.
Separation Notice
refers to a document provided by the employer detailing the end of an employment relationship.
Discharge Notice
refers to a formal communication issued by an employer to inform an employee their employment is being terminated.
Redundancy Notice
is a term for a formal notification issued to employees whose positions are going to be eliminated because of downsizing, restructuring, or other organizational changes. A redundancy notice includes details on the redundancy process, timelines, and support or compensation that will be offered.
Pink Slip
is an informal term for a notice of the termination of employment. The term “pink slip” originated in the early part of the 1900s in the U.S., where termination notices were sometimes printed on pink paper.