Termination Letter

What is a “termination letter”? 

A termination letter is a formal notice that confirms that an employee is being terminated or dismissed from their current job. While it is fundamentally a formal record that indicates an end to a worker’s employment, a termination letter also includes important details surrounding the individual’s termination. Additionally, it also states useful information for when the employee’s job ends. For example, the letter can include their final paycheck, benefits, among other details. 

A termination letter is also commonly known as a letter of termination, termination notice, a notice of termination, or a letter of dismissal. Although seldom used, a termination letter is sometimes called a “pink slip”, as a reference to the pink form or layer that is used by some. 

A termination letter must contain important pieces of information such as:

• The employee’s complete name
• Position or job title
• The name of the employee’s manager or supervisor
• The name of the HR administrator in charge of the termination
• Current date
• Date of employee’s last day of employment
• Reason for termination
• Summary of the events that led to the termination
• Any warning or disciplinary action process before termination

Furthermore, a termination letter also includes the following information for the employee’s transition:

• Details about compensation and benefits
• Final paycheck information
• Severance package, if any
• Transfer of retirement funds
• What steps to take for maintaining health coverage or seeking employment benefits
• List of company property items that the employee must return
• Non-disclosure agreements or other notification of agreement
• Contact information of HR

If you are an employer and you need to terminate an employee, you might wonder if you are legally required to give a termination letter. Generally, it is not a legal requirement. There is no federal law that mandates employers to give a termination letter to employees. However, there are a few exceptions to this such as if employees belong to a union, company closures, or mass layoffs. Also, if you are an employer, check with your state’s requirements. Some U.S. states require employers to give termination letters if needed. 

Even if it is not a legal requirement, employers must understand that it is worth their effort to provide a termination letter. It is beneficial for both employers and employees, because a termination letter keeps the termination process professional and well-documented. A termination letter that is detailed and comprehensive can prevent potential lawsuits or claims of the terminated employee that they were dismissed without cause or their knowledge.