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As an employer you'd rather think about hiring than firing, but sometimes terminations are a necessary part of business. Create a Termination Letter to explain why you're ending an individual's employment, and outline other details about the termination. This written record can help protect you if any questions or legal issues arise regarding the termination.
Use a Termination Letter if:
You're an employer who needs to terminate an employee because of layoffs, poor performance or some other reason.
Your company is terminating an employee, and would like to have a record of the termination in the event of a lawsuit.
Employee Termination Letter, Pink Slip, Letter to Fire an Employee
Information you’ll need to create a Termination Letter:
Letting go of an employee can be a relief or, in the case of a forced layoff, it can be very difficult. But being a professional means putting it in writing. Let the employee know why the decision’s being made and what both of your responsibilities are. Here’s what you’ll need to include in your Termination Letter.
Basic demographic information:
Note who is being terminated, the name of the company, and the name of the person who is handling the cessation of work. You’ll also want to include the date, both of the letter and the date the termination becomes effective, if those dates are different.
Reason for termination:
As noted above, sometimes, a termination is out of your control. You may be an HR manager, forced to lay off an otherwise productive employee because the business is going through a rough patch. On the other hand, you might be firing an employee for verbal abuse, excessive tardiness, or poor performance. Give your outgoing employee the piece of mind knowing why they’re being let go.
If you are terminating an employee for reasons under their control, make sure to note whether they were warned, how many times, and whether those warning were verbal, written, or both.
Whether it’s a laptop you provided, a company car, or just a keycard, chances are your employee has something that belongs to the company. Of course, in some cases, certain property is given as a perk of employment. Make sure you note if you’ll be asking for property back.
Vacation time and final paycheck:
If your employee has accrued vacation time, chances are you’re required to pay them for what they’ve accrued. But laws vary and, if you’re dealing with a contractor or part-time employee, you may not have to pay out for vacation or sick leave.
What you will have to do is pay your employee what they’re owed. Include what date they’ll be paid through and how they’ll receive their last paycheck: in person, by mail, or direct deposit. It’s often smart to pay your employee then, so that when the Termination Letter is signed, employment is officially over.
Health insurance, 401K, and other benefits:
If you’ve provided benefits like health insurance or retirement savings, may sure your employee knows how this will be handled. Provide them with information about continuing their health insurance and when it runs out. Let them know where their savings is. Your work relationship may be over, but your employee still has a future. Giving them this information up front will make their transition much, much easier.
Other documents for businesses and HR professionals
If you're issuing a Termination Letter, you may find yourself needing other employment documents. Here are some to get you started:
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