Both employers and employees understand that not every job will last forever. When it’s time to let an employee go, whether for cause, to reduce expenses, or for other reasons, a termination letter is a helpful way to address outstanding issues. Knowing how to write a legally compliant termination letter isn’t intrinsic, however. Termination letters need to be factual and neutral, whether you’re genuinely sad to see them go or you’re firing them for a good reason.
SixFifty can help you create termination letters that strike the right tone, reduce your legal risk, and comply with all applicable state and federal laws. Here’s what you should know about writing termination letters.
What is an employee termination letter?
Employee termination letters inform employees of their termination, give any required notices under state and federal employment laws, and tie up loose ends, such as how to return company property and how their benefits will be affected.
Even if you’ve verbally informed the employee that they’ve been terminated, you should write a termination letter for paper trail purposes. They provide a written record of the dismissal, reasons for termination, supporting documentation (such as written notices or performance evaluations), and can remind employees of their obligations under non-disclosure or non-compete agreements. If the employee pursues legal action, the termination letter can be used to show that you met your obligations as an employer.
On a practical level, employee termination letters act as a guide to a dismissal. They can provide helpful information about compensation owed, including unused vacation and holiday time. If they had healthcare, retirement, or other benefits during their employment, the termination letter lets the employee know when and how they will end. It can also provide directions as to how to return company property, and when their access to company systems will be revoked.
A termination letter may also give them contact information for human resources representatives who can help them navigate the dismissal process.
Employee termination letter format
While there’s no required format for an employee termination letter, there is some standard information you should include. Most termination letters fall into three broad categories: termination for cause (misconduct), layoffs and downsizing, or the end of a business contract.
Generally, termination letters should include:
- Date of the letter
- Employee and company name
- Name of the manager or executive handling the dismissal
- Reason for termination
- Date when employment ends
- Previous verbal or written warnings (when dismissing for cause)
- List of company property to be returned
- Receipt for company property already returned
- Required state or federal notices
- Information about compensation, including final paycheck, severance, unused time off, and retirement accounts
- Information about healthcare and related benefits
Depending on the employee’s position, tenure at the company, benefits, and your company’s industry and internal structure, you may not need to include all of these elements.
How to write a termination letter to an employee
Understanding how to properly create a termination letter helps your company mitigate legal risk. Here are some tips and tricks to make the process easier:
- Use a professional tone: Your tone should be neutral and professional. Avoid using jokes, overly familiar language, or expressing sarcasm and anger.
- Cover your legal bases: Whenever you draft a termination letter, imagine that it could be read in court or included in a legal filing. Provide enough evidence to justify the termination decision in a factual tone, with supporting documentation where necessary. For instance, if the termination is due to poor attendance, you might include a list of the dates the employee had been out, a list of prior warnings, any probationary periods, and the applicable company policies.
- Remember your company reputation: In the digital age, it’s easy for prospective employees to research the companies they’re interested in working for. If your termination process is less than professional and legally compliant, your reputation—and ability to attract top candidates—can suffer.
Create your own compliant termination letters with SixFifty
Writing a great employee termination letter can be challenging, especially when you have employees in multiple states. Enter SixFifty’s Separation Docs, part of the Employment Docs platform! Instead of researching state and federal employment law every time you hire or fire someone, you can generate compliant, professional employment related documents for every stage of the employment life cycle.
Best of all, our legal team keeps an eye on changes to employment laws nationwide, so your employment documents will be compliant whenever you generate them. There’s no need to spend time learning how to write an employment letter: SixFifty does the heavy lifting for you.
Ready to learn more? Schedule a product demo today!