How to Write a Termination Letter Including Templates

Terminating employees is a difficult but unavoidable part of being an HR representative. One thing you’ll need to know as employees are officially terminated is how to write an effective termination letter.

Unlike a new-hire employment letter, employee termination letters are standard business letters that clearly communicate the reason(s) for a termination. They also contain several categories of information, which this article will cover.

In some states, employers are legally required to write a termination letter every time they dismiss an employee. Some employment contracts also contain that requirement. Even when termination letters are legally optional, it’s still a good idea to include them as part of the termination process. A well-written termination letter can help prevent employees from filing wrongful termination claims.

This article will cover what HR professionals need to know about termination letters. We include 2 samples that apply to both onsite and remote employees being terminated. One is for termination without cause due to layoffs, downsizing, or job eliminations. The other is for terminations with cause, when employees are let go for poor job performance or misconduct. You can use these as templates for creating your own custom letters.

What should you include in an employee termination letter?

• General information: The letter should include the employee name and title, company name, effective date of termination, and name of the person who is handling the termination.
• Reason for termination: There are differences between being fired vs. laid off. Note whether the termination is a result of layoffs or other decisions the company made for financial reasons, or whether it was due to the employee’s poor job performance or violations of company policy. If you are terminating the employee for cause, describe any previous actions or disciplinary steps that were taken. Documenting these steps in writing will help protect you if the employee later sues for unfair dismissal.
• Company property: If the employee has any company equipment, such as laptops, phones, or key cards, specify the procedures for returning them. Include to whom they should be returned and when.
• Unused vacation time: Some state and local laws require employers to pay departing employees for any vacation time remaining at employment termination. Note the employee’s vacation time balance and how much pay they will receive in compensation. If you are not required to pay for unused vacation time and don’t plan to do so, note that.
• Final paycheck: Tell the employee when they can expect to receive their final paycheck and how you will deliver it.
• Health care benefits: Notify the employee if they are eligible for COBRA continuation group health insurance coverage. If you’ve provided other employee benefits, such as retirement savings or supplemental unemployment benefits, state how to access them.
• Notice period: If you gave the employee notice of termination, state the date in the termination letter. Notice is required in certain situations, such as during mass layoffs.

Attach an exit interview form and state when the employee’s exit interview will take place. For employee termination letters due to layoffs, consider determining and sharing the company’s rehire policy after termination. End the letter on a positive note, with contact name and info., wishing the employee well in their future endeavors.

Optional items to include in a letter of termination

• Severance pay: If you are offering a severance package, specify the amount of the pay and any conditions that must be met to accept it.
• Non-disclosure or non-compete agreements: If the employee has signed either or both agreements, state that in the letter and attach a copy.
• Reference letter: If you had to terminate the employee without cause, you could offer to write a reference letter.

What not to include in a termination letter

When writing a termination letter, avoid including anything that might provide cause for a future lawsuit. Don’t apologize for terminating the employee, don’t joke around, don’t get angry, and don’t give your opinion. Keep the letter straightforward, respectful, and factual.

Sample employee termination letter for termination without cause because of layoff, downsizing, or job elimination

[Date of letter]

Dear [employee name],

We regret to inform you that your employment with [company name] is being terminated effective [termination date]. This decision is final. We are terminating your employment because of [business reasons creating the need for layoffs, downsizing, or job eliminations].

Please return [company property in the employee’s possession] by the end of the day [when]. You will receive your final paycheck and reimbursement for your [amount] days of unused vacation time after we have received these items.

Out of appreciation for your service, we would like to offer you a severance check in the amount of [amount]. You will receive your severance check upon signing and returning the enclosed release of claims document.

Your healthcare benefits will continue for the remainder of the calendar month. If you would like to continue to use our group health plan through COBRA, please fill out the enclosed COBRA forms and return them to HR within 60 days of the date your coverage is set to end.

Please keep in mind that you have signed [any agreements the employee has signed, such as non-disclosure or non-compete]. For your reference, we have enclosed a copy.

We have also enclosed an exit interview form. Please fill it out to provide us with feedback about your time and experience with [company name]. We would be happy to meet with you at [time and day] to discuss your thoughts.

If you have questions about this letter or your termination, please contact [name and contact information for HR manager or other responsible party].

We wish you well in your future endeavors. I would be happy to provide you with a reference letter to help you as you search for a new job.

Sincerely,

[Name and contact info. of person handling termination]

Sample termination letter for termination with cause for poor job performance or misconduct

[Date of letter]

Dear [employee name],

This letter is to inform you that your employment with [company name] is being terminated, effective immediately. This decision is final.

We are terminating your employment for the following reasons:

[List of reasons for termination, including any performance issues or policies violated.]

You received the following warnings and disciplinary actions prior to this termination, as outlined in our employee disciplinary policy:

[List of previous disciplinary actions and dates.]

You must return [company property that the employee has] by the end of the day today. You will receive your final paycheck and reimbursement for your [amount] days of unused vacation time once we have received these items.

Your healthcare benefits will continue for the remainder of the calendar month. If you would like to continue to use our group health plan through COBRA, please fill out the enclosed COBRA forms and return them to HR within 60 days of the date your coverage is set to end.

Also, please keep in mind that you have signed [any agreements the employee has signed, such as non-disclosure or non-compete]. For your reference, we have enclosed a copy.

If you have any questions about this letter or your termination, please contact [name and contact information for HR manager or other responsible party].

We wish you well in your future career.

Sincerely,

[Name and contact info. of person handling termination]

When an employment relationship ends, the separation often represents temporary hardship for one or both parties. A well-written letter of termination becomes an important element of effectively communicating employee layoffs and other terminations in tough times.

To keep up with news, tips, and other resources for HR and business management, visit Workest daily.