Let’s face it, as someone who works in human resources, you know that finding the right employees is hard. Sometimes you may need to fire an employee and write an employee termination letter. Find out more about what the letter is, why you should write it and some examples and tips.
What Is an Employee Termination Letter?
When terminating an employee, you must have a written record of this. That’s when it will be useful for you to write a termination letter. The letter must confirm the termination of employment. It must also contain any other information the employee needs to know, such as the end of health coverage. We will provide some sample termination letters later on for you to get an idea of how they should look.
Why Write an Employee Termination Letter?
You may need to terminate an employee due to poor performance, stolen company property, or other reasons. In this case, you would be firing them. Or you may simply have to let employees go due to restructuring and layoffs.
Either way, employment laws require you to go through the formal processes for this. That includes meeting with the employee to discuss your decision, then writing the letter of termination and sending it to them.
What to Include In An Employee Termination Letter?
There are many things that you should include in an employee termination letter. Take a look at the following:
Personal Information
The employee’s details should be in the letter. This includes their name, position, company name, and termination date. It should also contain the name of the person dealing with the termination. That maybe you as the HR representative, their manager, or someone else.
Leave
In the letter, you must include how many sick days and vacation days the person has left. You also need to explain whether you are going to pay them out for these days. Depending on which state your company is in, you may not need to pay this. Check your local laws to find out.
Warnings
If you are terminating the employee due to poor performance or misconduct, you should have given them warnings in the past. In the termination letter, include the dates of these warnings and whether they were verbal or written.
Reason for Termination
As you likely know, you need to give a reason for termination. It could be company restructuring or that the person perpetually misses deadlines. Whatever the reason, you need to include it in the letter. This creates a record that you can come back to later if you need to.
Benefits Ending
If your company offers benefits such as health insurance, you need to include information in the letter on when these benefits end. For example, they will need to know when their health coverage will end.
Final Pay
The last thing to include is information on the employee’s final pay. They need to know when and how they will receive this. Also, include details of severance pay if you are offering this.
Tips and Tricks
- Leave out any familiar language including jokes. When someone is getting terminated, this can come across the wrong way.
- Be thorough. It’s best to include all the necessary information so that they don’t have to come back to you with questions.
- Before writing, collect all relevant information. This includes any relevant documents you need to mention in the letter (401k, health insurance).
- Always consult a lawyer to find out what is required in a termination letter in your state.
Example Employee Termination Letters
Below, we have included 2 termination letter templates. These can serve as examples for when you are writing an employee termination letter. Check out the letter samples below:
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Sample Letter 1
[letter date]
Dear [Employee’s full name]
This letter is to confirm the termination of your role as [Position] with [Company]. As discusses in our meeting on [discussion date], your employment with us ends on [termination date].
As previously explained, this termination is due to [termination reasons]. On [date of final pay], you will receive your final pay. This includes [details of any sick pay, vacation time, or severance that you will pay out].
You are required to return any company property that is in your possession. Your health care plan will end on [date of health care ending]. After this time, you can continue with the group coverage, information for which is attached, or you can find another plan. Your 401k is administered with [401k company].
Please review the attached copy of this letter and let me know if you have any questions.
Sincerely
[Name and signature of employer]
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Sample Letter 2
[Letter date]
Dear [Employee’s full name]
Across the last few months, [Company] has experienced significant financial setbacks due to the fluctuating market. We have tried to find innovative solutions to combat these issues. However, we are now in the process of needing to restructure and lay off staff due to these struggles.
We have decided that we need to lay off [number] positions. It is with sincere regret that I inform you that yours is one of these positions. Your role as [position] will end on [termination date].
Within the next 3 days, HR will be in touch with you to set up an exit interview. During this meeting, the cessation of your employee benefits will be discussed with you, as well as your final pay.
We have appreciated all the hard work you have done for our company over the years.
Sincerely
[Employer name]
While terminating an employee may be tough, writing the termination letter is the easy part. You can use one of these two templates to get you started.
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While terminating an employee may be tough, writing the termination letter is the easy part. You can use one of these two templates to get you started.
