Updated on March 27th, 2023
An employee termination letter is delivered to an employee to inform them that their term of employment has ended. The document will outline the reasons for termination, the date of their last day of work and paycheck, and any applicable benefits, severance pay, or other compensation they will receive.
Also known as a letter of intent to terminate or separation letter, this form is usually delivered in person to the employee by their superior or a member of the human resources department.
Presenting employees with a termination letter is one of the preferred methods for ending the relationship as it displays a high level of professionalism. It’s not usually a legal requirement, but there are many benefits for both parties.
The list below contains a number of circumstances where employers and employees could profit from a letter of intent to terminate.
- To provide proof of termination in the event of a lawsuit or dispute.
- To provide clarification and explanation of the post-employment process.
- To break down compensation packages, severance, and other benefits as well as the termination of benefits (medical, retirement, etc.).
- It is a requirement of local or state laws.
- The termination results in the employee being ineligible for unemployment.
Most states do not make it a legal requirement for employers to provide a written termination letter to discharged employees. The following states, however, do require that employers use a letter of intent to terminate:
- New Jersey
- New York
Letters of intent to terminate can be used to end nearly every type of employer-employee relationship.
Voluntary terminations happen when the employee chooses to leave their job for any of the following reasons, which are usually unrelated to any discontent or disagreement with their current employer:
- Contract expiration
- Health issues
- Family obligations or other personal reasons
Involuntary termination can occur either with or without cause if the employment is “at-will” (most employees in the United States are at-will). Most employees are terminated involuntarily for one of the following reasons:
- Bad performance (neglecting duties, frequent absence or tardiness, insubordination, etc.)
- Violation of employment contract
- Violation of company policy
- Damaging property
- Criminal activity
- Company layoffs (financial issues, restructuring, downsizing, etc.)
- Services are no longer needed
In many cases, a simple letter of intent to terminate will be sufficient to notify the employee of their discharge. Other circumstances might require additional documents and information for a smoother termination process.
The following items may need to be added or attached to a termination letter:
- HR Records. If the employee was terminated due to poor behavior, bad performance, or policy violations, the employer could attach written warnings, records of bad work habits, staff/coworker complaints, or other files to strengthen their reasoning.
- Receipt of Company Property. A list of all company property in the employee’s possession should be attached to the letter with instructions on how to return them. This includes keys, laptops, phones, vehicles, etc.
- Legal Agreements. The termination letter should briefly summarize any legal agreements that were signed by the employee, such as NDAs, NCAs, NSAs, etc. Copies of these documents should also be attached to the letter.
- Separation Notice. Not to be confused with the separation (termination) letter, a separation notice is a document used to inform employees that they may have a right to claim unemployment benefits.
EMPLOYEE TERMINATION LETTER
[EMPLOYER STREET ADDRESS]
[EMPLOYER CITY, STATE, ZIP]
[EMPLOYEE STREET ADDRESS]
[EMPLOYEE CITY, STATE, ZIP]
This letter is to inform you that your position at [COMPANY] has been terminated as of [DATE]. The reason for termination is as follows: [PROVIDE REASONS FOR TERMINATION].
Your last day of work will be [DATE], and you will receive your last paycheck no later than [DATE].
Please review the following information regarding your termination:
[PROVIDE DETAILS CONCERNING SEVERANCE, BENEFITS, UNCLAIMED VACATION DAYS, RETURN OF PROPERTY, ETC.].
Thank you for your contributions during your employment.