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Employee Termination Letter Template

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The Employee Termination Letter is a form which is versatile enough to use in nearly every situation where an employee must be informed that his or her services are no longer required. In most instances, it is a good decision to provide this information in writing, regardless of the nature of the relationship between the Employer and the employee. This form will neatly provide predetermined areas where basic information (such as the Employee’s Identity) should be documented along with an area to address the employee directly regarding the reason of termination.

Employment Separation Agreement – Formal agreement detailing the terms, such as severance and the employee’s rights, after termination.

Table of Contents

How to Terminate an Employee

Terminating an employee is never easy and often can lead to the employer being taxed more through unemployment insurance if the reason was not sufficient. Therefore, all firings or layoffs should be done in a civil manner with the employee being notified of the reason for their departure. Use the following instructions to terminate an employee that mutually benefits both parties involved.

Step 1 – How Much Notice Should the Employer Give?

This depends on the employee and the situation in the workplace. If the termination is polite and cordial, the employer may want he or she to stay for a two (2) weeks in order to train someone new.

Although, if there is fear the employee could become hostile or would be a “cancer” to their co-workers, the termination should be done immediately. This will best benefit all parties in order to make a short and fast transition.

Step 2 – Which Day is BEST to Fire an Employee?

Again this depends on the employee. For the benefit of the employee the firing should occur during the beginning or middle of the week. This will allow sufficient time for the individual to seek alternative employment during normal business hours.

If the employee has a history of erratic behavior, the recommended time do it is Friday and at the end of the workday. In this approach an employer can give the terminated employee the time to gather their things without the embarrassment of their former co-workers watching them.

Step 3 – Inform the Employee of Termination

If the employee has access to the workplace, it is best to meet in-person to handle the termination. The employer will typically request all types of access to the premises (e.g. keys, fabs, etc.) which must be handed over.

If the working relationship is on a freelance, teleworker, or remote relationship then it’s best to use the employee termination letter (Download).

Step 4 – End Payroll and Benefits

Payroll – The employer will be responsible for ending all payments or salaries to the employee. If there is severance, the employer’s payroll service should be notified.

Benefits – All benefits to the employee should be terminated or transferred (if applicable).

  • Health Insurance – After termination, the employee will have to find short-term insurance coverage on their own.
  • Retirement Benefits – Most 401(k)’s can be transferred to an IRA at a bank. Otherwise, it can complicated and the employee should discuss with an accountant about their options.

Employment Contracts vs. At-Will

An employee under contract may be terminated if the contract has been fulfilled. However, contracts may have specific stipulations advising that an employee may be terminated beforehand, at the discretion of the employer (business need) or due to performance issues, violating confidentiality agreements or having behavior issues. In turn, the contract could have other specifications that ensure the employee cannot be terminated regardless. At-Will employment means that an employer can terminate the employee for any reason, at any time and without notice. Dependent on the state the termination takes place, there are local laws that may protect the employee, even in an at-will employment situation.

Avoid Discrimination

While a contracted employee or at-will employee may be terminated at any time, it will be critical for the employer to follow state and federal labor laws. State and federal laws forbid employers from terminating the employment of an employee for discriminatory reasons (i.e., age, gender, gender identification, race, religion, national origin, status of pregnancy, sexual orientation, disability, etc.). If an employee feels the employer has wrongfully terminated them, the employee has the right to seek legal counsel for validity of termination. An employer could face penalties, sanctions or fines if found guilty of wrongful termination.

(Video) What is an Employee Termination Letter?

How to Write

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1 – The Notice To Terminate An Employee Is Downloadable Here

This template can be obtained in one of the three formats (Adobe PDF, Microsoft Word (.docx), Open Document Text (.odt)) labeling the Buttons in the caption area of the preview picture. Make sure to obtain a copy that is compatable with your system since, with the proper editing program, you may enter the majority of information required here on screen then print it to be signed and delivered.

2 – Some Basic Information Regarding The Current Situation Should Be Presented

The heading of this document will require some basic information regarding the identity and location of the Recipient Employee. Begin by entering the Date it is being executed on the blank line labeled “Date” at the top of this page. 

Record the “Name Of The Terminated Employee” on the second blank space. The Employee’s Residential “Address” should be supplied using the next two blank lines. Finally, re-enter the Full Name of the Recipient Employee after the word “Dear.”

3 – Define The Purpose Of This Correspondence

The first task set by the body of this Notice will be to present the exact Date of the Employee’s Termination using the space between the word “On” and “(Date).”  Then, on the second blank space (just before the label “Business Name”) in the body of this letter, fill in the Name of the Employer who is terminating the Employee’s service. Regardless of what may have been discussed by the Employer and Employee, it will be necessary to state the exact reason for this termination in writing here. Use the blank lines supplied after the words “…Officially Terminated For The Following Reason” to supply this information.

4 – The Employer Must Sign This Template Upon Completion

It is imperative for the purpose of this template that the Employer issuing this termination sign his or her Name on the blank line after the word “Sincerely” in the closing area of this form letter.


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