A termination letter notifies an employee that he or she has been fired, lists the next steps they need to take and explains benefits or compensation they are due to receive. Terminations letters are also called a pink slip, letter of termination, contract termination letter, letter of separation, and notice of termination of employment.
Below you'll find a version of our employee termination letter template that you can copy and paste, and advice on how to write a letter to terminate an employee.
Employee Termination Letter Sample Template:
[Date Letter is Drafted]
This letter is to inform you that your employment with [company name] will end as of [date termination is effective].
You have been terminated for the following reason(s):
[List factual reasons for termination].
This decision is not reversible.
You will receive: [List compensation they will receive, including pay for unused leave, severance pay, salary owed, etc].
Your health care benefits will [explanation of what will happen with their benefits].
You are requested to return [list all company property to be returned].
Also, please keep in mind that you have signed [list any agreements employee has signed, such as a confidentiality policy or a nonsolicitation agreement].
If you have questions about policies you have signed, your compensation, benefits, or returning company property, please contact [contact name, typically someone from HR, with contact info].
[Name of person handling termination]
Sample Termination Letters:
The following termination letter samples are examples only. Talk to your legal counsel before sending a sample termination letter so they can modify it to correctly fit your situation. Especially if you plan on using a sample termination letter for cause.
How to Write a Termination Letter:
- Add the employee name, ID number, position, and department.
- Add the name of manager or supervisor handling termination.
- Include any severance, benefits, and compensation the employee is entitled to.
- Detail any company property employee is expected to return.
- Highlight any legal agreements including non-disclosure, non-compete, etc. the employee has signed.
- Have your legal counsel check the letter before you send it.
1. Basic termination letter to employee - without cause.
Oct. 29, 2017
This employment termination letter is to inform you that your employment with The Internet Company will end as of October 29, 2017. This decision cannot be changed.
You will receive your final paycheck for this month and payment for remaining leave today. Once you have signed and returned the attached release of claims document, you will receive a $25,000 severance payment.
Your health care benefits will remain in effect for another 90 days.
You are requested to return the company laptop, swipe card, and cell phone before the end of the day.
Also, keep in mind that you have signed a confidentiality agreement. Please review the attached copy.
If you have questions about compensation, benefits, company property or policies you have signed, please contact John Doe at 555-0600.
2. Sample Termination letter without Cause (staff reduction).
Oct. 1, 2020
This letter of termination of employment is to inform you that your employment with Pied Piper, Inc. will end as of October 29, 2020. This decision is final and will not be modified.
You have been terminated for the following reasons:
Recent economic conditions have caused a significant downturn in sales, necessitating a 20 percent workforce reduction at Pied Piper. Unfortunately, your position is part of this reduction and has been eliminated.
You will receive your final paycheck after your last day, as well as payment for remaining leave. You will also receive a $15,000 severance payment provided the attached release of claims document is signed and returned.
Your health care benefits will remain in effect for 180 days after your termination takes effect.
You are requested to return the company vehicle, key card, and phone on your last day of employment.
Also, please keep in mind that you have signed a number of agreements which prohibit you from divulging confidential information. Please review the attached copies.
If you have questions about this letter please contact John Smith at 555-0600.
3. Sample Termination Letter for Cause (attendance).
Oct. 29, 2018
This separation letter is to inform you that your employment with Acme Internet Inc. will end as of October 29, 2018. This decision is not reversible.
We decided to terminate your employment for these reasons:
On September 29, 2018, you were absent from work without leave. At that time, you were given a formal written warning that your absence violated company policy.
On October 18, 2018, you were again absent from work, without leave. At that time you were given a second warning and informed that a third case within a year would result in your termination.
On October 28, 2018, you were absent from work without leave a third time, resulting in your termination.
Included with this letter of employment termination is your final paycheck.
Your health care benefits will remain in effect for 60 days.
You are requested to return any company property such as laptops, keys, and books before the end of the day.
Also, please keep in mind that you have signed a non-solicitation agreement. Please review the attached copy.
If you have questions about compensation, benefits, company property or policies you have signed, please contact Jane Doe at 555-0600.
4. Sample Letter of Termination of Employment due to Poor Performance.
Oct. 29, 2019
This letter is to inform you that your employment with Internet Industries Corp. will end as of October 29, 2019. This decision is not reversible.
Your employment was terminated for these performance reasons:
On July 1, 2019, you received performance coaching and were informed that your performance would be required to improve if your employment with Internet Industries Corp. were to continue. On August 25, 2019, you received a second warning and were informed that failure to improve performance within 60 days would result in your termination.
You have failed to meet the performance targets agreed upon. As a result, your employment has been terminated.
You will receive your final check for this month in the mail in 7 days. Once we have received a signed copy of the attached release of claims document, you will receive a $5,000 severance payment.
Your health care benefits will remain in effect for 35 days.
You are requested to return all company property, including your car, cell phone and ID badge before the end of the day.
If you have questions about compensation, benefits, company property or policies you have signed, please contact Jane Doe at 555-1212.
When Should You Use a Termination Letter?
If you're already planning to terminate an employee in person, you may be wondering why you should create a job termination letter as well. There are several good reasons.
1. If it is legally required.
In some states, employers must give termination letters to employees. These laws are subject to change. If you're unsure about the status in your state, consult a legal professional.
2. If the employee is not eligible for unemployment.
In most states, former employees are ineligible for unemployment if the termination was caused by gross misconduct. If this is the case, a letter that documents reasons for termination is important.
3. You want legal protection for the company.
Once again, it's about documentation. Having a document that states the reasons for termination and the circumstances around it can aid you if there are any legal issues.
4. You want to provide the employee with important information.
Termination letters help make the transition as smooth as possible for the employee when they provide relevant information about compensation, benefits, and ongoing agreements.
Use a Termination Letter When:
- It is required by state or local law.
- You believe the employee is ineligible for unemployment.
- You want a record of the termination in case of a lawsuit.
- The termination needs to be made clear to the employee.
- You want to provide information on the employee's next steps.
- You want to pass along information about owed compensation and benefits.
Are Termination Letters Required by Law?
There is no federal law requiring that you provide employees with a termination letter. In some states, however, they are required. The Society for Human Resource Management (SHRM) recommends providing one.
A termination letter is useful for documentation, it helps to make your intentions and the employee's next steps very clear, and will keep you out of trouble if you happen to live in a state that requires them.
Should I consider using an employee termination form?
Typically this will be required in larger companies with big HR departments. They contain basic information about the termination, such as employee name, department, position, and date of termination.
Is there a time when I should not use a termination of employment letter?
It's hard to imagine that situation. If you've got a letter of termination of employee that just supplies the basic info, and sticks to facts, there's really no reason not to use it. Our termination letter example should be right in all situations. If there is any worry, leave off the reason for termination from the firing email template.
How do I create a severance agreement?
You can learn more by checking out our severance agreement template.
Do you have to give an employee a termination letter?
There is no federal law that states that a company must issue a letter of termination, however many employers do furnish them as a matter of principle. As most employees in the U.S. are at-will employees, the relationship between an employer and employee can end for any reason, or no reason at all, aside from a breach of contract or discrimination involving race, gender, ethnicity, etc.
What is the minimum notice period for termination of employment?
Companies are not obliged to give notice to an employee before termination or layoff, unless the employee is under contract or covered by a union agreement. In that case, the employer-employee relationship is regulated by the terms of the contract.
Under the Worker Adjustment and Retraining Notification Act (WARN), employers with 100 or more employees are required to provide 60 days' notice in the case of a mass layoff or plant closure.
State and local laws may differ depending on your location, so be sure to contact your Department of Labor to find out more about local rules and regulations.
Is discharge the same as terminated?
The terms "discharge" and "terminated" are often used interchangeably, but the meaning changes as far as a contract is concerned. "Discharge of a contract" means that the main obligations of the contract have been met by the employee, signifying the end of the relationship between the employer and employee.
Need more guidance? Check out our article on firing an employee. Have an employee who has stopped showing up for work? Check out our guide to job abandonment, which includes a letter template for this situation.
If you're laying an employee off, rather than firing them, check out our layoff letter.
Also, if you need to replace someone quickly, check out our guide to finding employees.