As a manager, you’d much rather think about hiring than firing. We all would. But sometimes, terminating an employee has to be done for the betterment of your business and for those who work there. To make the matter even more difficult, the way in which you terminate an employee can have huge legal ramifications down the road. That’s where the termination letter comes in.
Even if you verbally fire an employee (which you should), it’s a good idea to also provide notice in writing. When you give the employee a termination letter (be sure to keep a copy for your own files), you protect yourself and your business should questions or legal issues come up in the future.
That said, writing a termination letter can be an extremely daunting task. If you’ve never written one before, you may wonder:
- What type of language should I use?
- What should I put in?
- What should I leave out?
- Where do I begin?
The experts at Sling are here to help. We’ll answer all those questions and more. We’ll even give you a termination letter template to help you get started.
Before we get to the template, though, it’s important to begin by examining what type of language you should use throughout the document. After that, we’ll look at the specific information you should put in the termination letter, and what you should leave out.
The Correct Language To Use In A Termination Letter
When you write a termination letter, keep in mind that what you put on paper may later be included as evidence in a legal proceeding. Because of this possibility, the language you use should always be professional and focused on the task at hand.
That means no jokes, no sarcasm, nothing that might be misconstrued as making light of the situation.
If your letter must include the reasons for the termination (which we’ll discuss below), state the facts directly and factually. Be sure to provide supporting evidence that influenced your decision.
And, if possible, cite specific company policies that were violated. The way you state this information in your letter will vary depending on your writing ability, but here is an example to help you understand what type of language to use in a termination letter.
Our investigation concluded that your conduct on July 15, 2017 violated Platonic Solids’ discrimination policy. In particular, your derogatory comments towards another employee were direct violations of company policy. This after you received written warning, and additional training, regarding a similar incident in March of this year.
The example above is professional, factual, and focused on communicating all the pertinent information relevant to the particular situation. If, after writing your termination letter, you are unsure of the language used, consult with a labor attorney who can provide advice.
Items To Include In A Termination Letter
Regardless of the reason for the termination, it’s a good idea to include the following information when applicable. This is, in no way, a comprehensive list.
Depending on the size of your company, the reason for the termination, and a whole host of other variables, you may need additional information in your termination letter. If in doubt, consult a qualified attorney.
1) Names And All Employee Information
It goes without saying (but we’ll mention it anyway) that you should always include the name of the person being let go, the name of the company, and the name of the manager handling the termination.
You should also mention all company information relevant to that employee. Essential items include:
- Employee ID number
- Immediate supervisors
This creates a complete record for future use. If you need to reference the letter later on, you don’t have to go searching through other records to find out what the employee’s responsibilities were — they are all listed right there in the letter.
Dates are important to establish a timeline. They provide specific evidence about why you are terminating the employee and act as proof should legal proceedings be necessary.
At the very least, include the date the letter was given to the employee and the date the termination becomes effective (if they differ).
3) Reason For Termination
Reasons for termination can range from company downsizing to poor performance and everything in between. Whatever the basis for firing the employee, give him the peace of mind of knowing why they’re suddenly out of a job.
4) Receipt Of Company Property
It could be something as expensive as a tablet, a laptop, or even a company car. It could, on the other hand, be something as simple as a key to the front door. If it’s company property and you want it back, confirm receipt of said items in the termination letter so proof of possession is established.
5) Severance, Benefits, And Other Compensation Information
Some employees may be entitled to a severance package, unused benefits, or other compensation. Be sure to include the steps the employee should take to receive these benefits.
Make the instructions are very clear so the employee has no problem initiating the process. Too much information, in this case, is better than not enough. Some benefits packages are very valuable, and you don’t want the employee feeling like you’re trying to cheat them out of what they deserve.
Important information includes:
- Whom to contact
- That person’s contact information
- When to contact them
- List of benefits the employee can expect
If everything will be done for them, write down when they can expect to see the benefits arrive. If you do include a specific date, be sure to complete the transaction on or before that time. Being late with delivery can cause further problems.
6) Legal Agreements
All legal agreements, including the non-disclosure agreement (NDA) and the non-compete agreement/clause (NCA or NCC), should be completed and signed when the employee is hired. You should not try to make the employee sign these papers during the termination process. They may perceive it as some form of penalty.
Instead, use the termination letter to remind the employee about these binding contracts. Provide copies of all applicable documents, but write a summary of the salient points so the employee can quickly see what they can and cannot do.
7) Details About Their Final Paycheck
If possible, it makes things easier if you give your employee their last paycheck when the termination letter is signed. If this is not feasible, include specifics in the letter regarding:
- The date they’ll be paid through
- When their check will be made available
- Options for obtaining that last paycheck (pick up, mail, direct deposit)
When you include these details in the termination letter, there will be no issues regarding unpaid compensation that could lead to bad feelings and legal proceedings down the road.
Items To Exclude From A Termination Letter
Exclude the following items from your termination letter. Keep in mind that this is not an exhaustive list. Always consult a qualified attorney to be sure.
1) Severance To Waive Legal Claims
Employees may see this as a sign of weakness. They may wonder if they are being wrongly terminated and this is the company’s way of avoiding legal issues. If severance is company policy, you can always negotiate after the termination letter has been delivered without the potential for legal claims on the employee’s mind.
2) Protected Characteristics
What are protected characteristics? Anything that could be discriminated against. Information such as health, sex, disability, age, and pregnancy are considered protected characteristics. You shouldn’t consider them when hiring and you shouldn’t consider them when firing.
3) Familiar Language
This goes back to the correct language we talked about at the beginning of this article. Keep everything professional and factual. Specifically, avoid phrases such as:
- Look on the bright side
- Now’s a great time to retire anyway
- Now you can spend more time with your sick child
- You’d probably prefer a less stressful job anyway because of your heart condition
For one thing, these phrases dilute the gravity of the situation (the employee just lost their livelihood). For another thing, they can be viewed as being discriminatory based on protected characteristics.
4) All The Evidence Or Reasons For The Firing
This may sound counterintuitive to number two in the section above, but it’s not. To support your decision for terminating an employee, it can be tempting to list every misstep or mistake made.
The problem with that is, should the issue go to court, the employee may be able to provide evidence of their own that exonerates them from one or two of these minor claims. This can be used to question the credibility of ALL of the reasons for the termination (including the main issue).
Avoid this possibility by sticking to only relevant disciplinary action, performance issues, or events that contributed to the decision to terminate.
Now that we’ve discussed what to put in your termination letter and what to leave out, let’s turn our attention to the termination letter template. You can use this template as a starting point from which to craft your own unique letter.
Termination Letter Template
The following termination letter template can be used as-is or can be tailored to fit the specific needs of your business. Please read the legal disclaimer at the end of this article.
August 24, 2017
Ms. Sarah Smith
1234 Long Road
Town, State 11111
This letter serves as written copy confirming our discussion on August 24, 2017 that your employment with XYZ Company. is terminated effective immediately.
Because your employment with XYZ Company. has been less than one year, you will receive two weeks severance pay. This pay will be remitted to you after you have signed and returned the release of claims document (enclosed).
Payment for your accrued paid time off will be included in your final paycheck which will be sent via United States Postal Service to the address at the top of this letter on our regular payday (Friday). As an alternative, you may pick up your final paycheck at the reception desk on that Friday. Please let us know which you prefer.
You will also receive a letter outlining the status of your benefits upon termination, including information about your eligibility for Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation of your health coverage.
This letter also serves to confirm that we have taken possession of your security ID, your office key, the company-owned tablet, and the company-owned cell phone.
It is your responsibility to provide the company with accurate and up-to-date contact information so that we can provide future information (e.g., your W-2 form).
Please let us know if there is any way we can assist you during your transition.
Human Resources Manager
Legally, Do You Have To Provide A Termination Letter?
It depends on the state where your company does business. There is no federal law mandating that you provide a termination letter to your employees.
That said, some states have rules about the termination letter that you are well-advised to follow. Be sure to check with your state’s Department of Labor or consult a corporate lawyer familiar with business in your area for further details.
Why You Should Always Use A Termination Letter
The termination letter serves one very important purpose: both employers and employees use it to avoid problems in the future.
Your employee will use the termination to claim unemployment insurance and other federal and state benefits. Without the termination letter, governments can deny access to programs that can make a huge difference in the employee’s life.
You will file the termination letter and use it as part of your defense should the employee file a complaint about the termination and seek legal action. Think of the termination letter as a protection for your business against future attacks. Without it, you may be liable for thousands, if not millions, of dollars.
Other Issues Regarding The Termination Process
Terminating an employee for any reason is a difficult task. Even if you provide a termination letter, there are other things to keep in mind, such as:
- Always provide warnings about unacceptable behavior so the employee isn’t surprised if you have to let them go.
- Talk to the employee face-to-face rather than terminating them via electronic means (e.g., email, text, or voice message).
- Include a witness (e.g., a manager or supervisor) when you sit down with the employee to go over the termination letter.
- Don’t make your decision to terminate an employee by comparing them to another team member. Use your business’s standards, goals, and behavioral expectations (as laid out in your employee handbook) as the benchmark.
- Keep the meeting as civil as possible and avoid getting into an argument with the employee.
- Prepare a succinct statement about why you are terminating the employee and don’t go into every little detail in an attempt to explain the firing.
- When reviewing the termination letter, make every effort to communicate that the firing is final. Sugarcoating what you say can lead the employee to think there may be a chance to avoid being let go.
For more information about what you should and shouldn’t do when terminating an employee, check out our article 12 Things You Should Never Do When Firing An Employee.
The termination letter doesn’t have to be complicated. Just be sure to cover all your bases and include all pertinent details so that problems don’t arise later.
For more great management tools and advice, and for help scheduling your employees, visit GetSling.com today.
The laws regarding an employee’s final paycheck vary from state to state and country to country. Verify the process in your area and edit the template accordingly. Additionally, we make every effort to offer accurate management, employer, and workplace advice.
That said, we are not attorneys. The content on this site is not to be construed as legal advice. GetSling.com has a worldwide audience and employment laws and regulations vary drastically from place to place. We recommend that you always seek legal counsel regarding the laws and correct procedures for your area. The information on the site is provided for guidance only, not as legal direction.