When you are in charge of managing employees, whether directly or through a human resources role, there may come a point in time when you need to terminate an employee. While terminating an employee is rarely an enjoyable task, a properly composed termination letter can make the process much smoother.
One key document during the process is a termination letter. An employee termination letter serves as an official termination notice. It is a simple correspondence that outlines important information regarding the end of an employee’s time with your business.
In this guide, we’ll help you learn everything you need to know about writing an employee termination letter, along with termination letter examples and samples.
What Is a Letter of Termination of Employment?
A letter of termination of employment, frequently called a termination notice or termination letter, is an official correspondence used to document and explain the end of a worker’s employment with an organization. Companies will use these letters to explain to an employee the details surrounding their termination, including key information such as when their last day of work will be and when they can expect to receive their last paycheck.
There are two ways an employee might be terminated—voluntarily or involuntarily. Voluntary termination occurs when an employee resigns, quits, or completes a contract. An involuntary termination takes place when a business terminates a person’s employment with or without cause.
When Should You Provide a Letter of Termination?
You should provide a letter of termination to an employee immediately after informing them of their end of employment. If you operate in the state of Arizona, California, Illinois, or New Jersey, a termination letter to employee is a legally required document. While you might not be legally required to provide this letter to employees in other states, it is still a business best practice. Ideally, providing this document in a timely manner will allow an employee the most time possible to find a new job.
Termination Letter Template
If you are tasked with writing a termination letter, you can use the following termination letter template to help you get started. For more inspiration, check out the termination letter examples below as well.
Dear [Employee’s Name],
This letter is to inform you that your time of employment with [Company Name] is terminated effective [date of termination] due to [factual reasons for termination].
[Insert any applicable documentation or details if termination is with cause]
Your final paycheck will be provided to you on [date] and will include [compensation such as unused leave].
Your health care benefits will continue through [date].
Please return the following company property to Human Resources immediately:
[Property to be returned]
If you have any further questions, please contact me at [phone number] or [email].
Termination Letter Examples
If you need help writing a termination letter, use the following examples as a showcase of how to include the right amount of details in your letter. Be sure when using a template or example to replace all copy with relevant information.
Termination Letter Example 1: Layoffs
September 12, 2022
Dear Stanley Meris,
Over the past two years, COVID has taken a toll on the profits of ABC Edge Agency. As we look forward, we are forced to reassess our budgets and spending in order to mitigate losses. In restructuring our company, we have determined the best course of action is to eliminate 200 positions at the company. I regret to inform you that we will remove your position as customer service representative as of September 13, 2022.
Your final paycheck will be provided to you on September 13 and will include all unused leave. Your healthcare benefits will continue through September 30, 2022.
Please return the following company property to Human Resources before your last day with the company:
- Cell phone
If you have any further questions, please contact me at 777.555.3333 or Karen.Filips@ABCedgeAgency.com.
Thank you for your hard work over the past three years.
CEO, ABC Edge Agency
Termination Letter Example 2: With Cause
September 12, 2022
Dear Brandie Waters,
This letter confirms our conversation today, informing you that your employment with ABC Retail is terminated effective immediately. You have been terminated for the following reasons:
- On August 10, you received notice of a no call no show violation.
- On August 23, you received a second notice of a no call no show violation.
- On September 1, you were put on an improvement plan (see attached signed document).
- On September 9, you receive a third notice of a no call no show violation, putting you in violation of your improvement plan.
Your final paycheck will be provided to you on September 13. Your health insurance benefits will continue through September 30.
You must return the following ABC Retail property to human resources immediately:
- 5 Employee Polos
- 1 Headset
- 1 Radio
Should you have further questions, please contact me directly at 888.999.2222 or by email at Phylis.Wall@ABCRetail.com.
District Manager of ABC Retail
Termination Letter Best Practices
When terminating an employee, use the following best practices to help guide the process.
- Work with a lawyer: Depending on where your company is located, you may need to adhere to specific laws when writing a termination letter. To ensure that you obey all termination of employment laws, consult with a lawyer before you begin the process.
- Have a conversation first: Before you hand the termination of employment letter to a worker, have a conversation with the employee one-on-one. Let the employee know about their termination prior to providing them with the document.
- Don’t get personal: While you must include details explaining the reason for terminating an employee in your termination letter, make sure you keep it professional. Even if you struggled with an employee’s behavior or attitude, a termination letter is not an appropriate place to include a personal rant. Doing so is not professional, and it can put you and your organization at risk of a lawsuit.
- Be clear and concise: In some cases, providing a notice of termination to an employee can be difficult. You might be tempted to try to soften the blow by including extra information in your letter. However, a termination letter should be kept short and to the point. This letter should only contain pertinent information about an employee’s termination, not an expression of your sadness or remorse.
To learn more about how to handle employee hiring and termination, stay tuned to our employer insights center, where you’ll find helpful guides and articles specifically designed for the modern employer.