Termination Letter Template

Writing a termination letter is nobody’s idea of a good time. But it is a necessary part of the separation process, another aspect of work life that is, unfortunately, sometimes unavoidable.

Drafting a letter for an employee who has been laid off or terminated means delivering bad news in a way that is honest, direct, and fair. It also requires careful wording designed to protect your organization from possible legal action. Now add another twist on this already precarious task: You need to try to deliver written notice of termination in a way that is designed to mitigate the likelihood of your soon-to-be former employee writing a scathing employer review of your company on social media.

Most of today’s workers have posted at least one employer review on social media, and more than half of those reviews are negative. Bad employer reviews can tarnish your employer brand and present significant challenges to talent acquisition, with studies finding that 55% of job seekers have reported abandoning applications for employers after reading poor employee or candidate reviews.

Given how high the stakes are for managers tasked with drafting a termination letter, some guidance is in order. In addition to the sample template provided below, we’ve compiled some of the best practices for what the letter should include and what legal issues need to be considered and addressed as you craft it.

Why Write a Termination Letter?

One of the most difficult decisions most managers ever make is whether to cut their losses and let an employee go. Sometimes economic considerations mean that staff needs to be cut in the form of targeted layoffs. Other times employees need to be let go due to poor performance or misconduct.

Let’s assume you’re dealing with an employee who never lived up to expectations or dropped the ball on a project that impacted your company’s bottom line. Maybe it’s just the last straw following a string of second chances. Given any of these circumstances, especially in the heat of frustration, it might be tempting to engage in a dramatic “You’re fired!” moment within earshot of colleagues. But there are many good reasons to resist this understandable urge.

Sure, doing so may rid you of a problem employee quickly, but it will likely create new problems in the process. Even if you take the conversation to a private location, such as your office, verbally terminating them before you have time to craft a termination letter could make the separation look more like a knee-jerk reaction than a measured response.

How to Deliver a Termination Letter

A hard copy letter should accompany (not replace) a private meeting with the person being let go, typically with a human resources representative present as a witness and to prevent you from accidentally saying something that might incur legal liability. During this meeting, it is a good idea to provide past performance reviews and performance improvement plans that present evidence of a failure to improve to further mitigate the possibility that the employee may accuse you of wrongful termination.

Suppose that the person you verbally fired in the previous section has a disability, is over the age of 40, belongs to an underrepresented group, or is otherwise protected by anti-discrimination laws. Even if you had a very good reason for firing them, the lack of a written record may make it difficult for your company to defend its reasons to terminate.

Having the employee read the termination letter during the termination meeting and then asking if they have any questions could alleviate some of the tension. It could also lead to a useful negotiation over the terms of separation, and dissuade them from seeking legal recourse, writing a negative employer review on social media, or tarnishing your employer brand and reputation with other professionals in your field.

Procedures and Legal Considerations

Depending on the employment status of the termination letter recipient (i.e., whether they’re a consultant or 1099 employee) and the laws of your state (some require last payment at the point of termination), your letter should clarify:

How much the employee is owed in unpaid wages and compensation.
Any applicable deadlines that pertain to the separation process.
Procedures for returning company property, such as laptops, mobile phones, or other items. By including these items in the letter, you’ve created a record showing that you provided them with notice should legal action become necessary down the road to recover any property.

You can alleviate a big area of contention by writing that their final paycheck will be provided to them according to the laws of your state. This could be on their last day of employment, or within a specific number of days after their termination. If you’re not sure what the law is in your state, an employment law attorney can help.

Keeping a copy of your letter on file preserves a written record of why an employee was terminated, what notice was provided, and the steps your company took to ensure legal compliance.

What to Include in Your Letter

A professionally written letter can help protect your company while giving the recipient a clear and direct summary of what led up to the firing and where things stand in terms of unpaid vacation, vested retirement investments, and other benefits. Here are some of the basic elements you should include:

Name of the person being terminated, the name of the company, and the manager/HR representative handling the process.
The date the termination letter was drafted, was delivered, and the date the termination is scheduled to take effective. In most cases this should be the same, as having a terminated employee on premises or allowing them to retain access to proprietary information can expose you to negative outcomes.
Reason for the termination: Note whether it’s a planned layoff or a termination for cause or misconduct (in which case you may choose to provide details about the reasons for termination, depending on the advice you obtain from HR and/or legal counsel).
What led up to the firing: If it’s a termination for cause, remind them what led up to the decision, including any chances they had to correct their course.
A process for retrieving company property, including a list of all the property they must return, when it must be returned, and any special procedures for doing so.
The amount that will be contained in their final paycheck, including accrued vacation time. As noted above, this will depend on several factors. Check with legal counsel to ensure compliance with state and local laws.
An explanation of what, if any, benefits they will be entitled to after termination. This may include health care insurance and/or retirement benefits in the form of a pension or 401(k). If they have health care benefits through your company, provide information in writing that outlines their rights under COBRA. If they have a 401(k), give them information about how to roll it over to another account.

Termination Letter Template for Layoffs

The following template can help to guide you as you draft notification for employees who are being let go due to layoffs:

Dear [Employee’s Name],

It is with a heavy heart that I must inform you of a difficult decision regarding your position at [Company Name].

After a careful review of our current business operations, we have determined that due to [reason for the layoff, e.g., economic downturn, industry sector contraction, merger, restructuring, reduction in workforce], we must unfortunately eliminate certain positions within the company. Regrettably, your role as [Employee’s Job Title] has been identified as one that will be affected by this reduction.

Your last working day will be [Last Working Day, typically two weeks from the date of the letter]. We understand that this news is distressing, and we want to ensure that you have the support you need during this transition.

In accordance with company policy and local regulations, we will provide you with the following:

Severance Package: [Details of severance package, if applicable]
Outplacement Services: [Information about job search assistance or career counseling, if available]
Final Pay: [Details about final paycheck and any accrued vacation or benefits]

Please reach out to me or [HR Contact Person’s Name] at [HR Contact Person’s Phone Number] or [HR Contact Person’s Email Address] to discuss your severance package and any other questions you might have. We are committed to making this transition as smooth as possible for you and will assist you in every way we can.

We want to thank you for your hard work and dedication during your time with [Company Name]. Your contributions have been greatly valued, and we genuinely regret that we must part ways under these circumstances. Know that we remain invested in your future success and the connections, and for that reason we want you to know that you are welcome and encouraged to take part in our organization’s corporate alumni association, through which you can learn about future openings, networking opportunities, and other resources.

We wish you the very best in your future endeavors and are hopeful that you will find success and fulfillment in your next role.

[Your name and signature]

Termination Letter Template for Employees You Are Terminating for Cause

The following template will help you organize your thoughts and get started writing your letter in cases where an employee is being terminated for cause, including misconduct:

Dear [employee’s name],

I regret to inform you that your employment with [company’s name] has been/will be terminated as of [termination date]. As discussed, we’re terminating the employment relationship because [give summary of your reason].

Beginning [termination date], you will no longer be eligible for compensation or benefits associated with this position. Please make sure you return [list any company property that must be returned] by [date of deadline] to [name and address where materials can be dropped off or mailed].

You will be paid your salary until [termination date—if applicable] and are entitled to your accrued vacation days [if applicable]. You’ll also receive severance pay in the amount of [amount and terms, if applicable].

We understand that this news is distressing, and we want to ensure that you have the support you need during this transition.

In accordance with company policy and local regulations, we will provide you with the following:

Severance Package: [Details of severance package, if applicable]
Outplacement Services: [Information about job search assistance or career counseling, if available]
Final Pay: [Details about final paycheck and any accrued vacation or benefits]

Be advised that you have signed a non-disclosure, non-solicitation, and non-compete agreement [if applicable]. If you have any proprietary information about our company on your personal devices or in the form of hard copies, you must delete it or return it (without making copies) immediately.

Please feel free to reach out to myself or [HR representative’s name] with any questions.

We wish you all the best in your future endeavors.

[Your name and signature]

Whether you are crafting a termination letter for cause or due to layoffs, make sure you include the date it is delivered to the employee and a place for the employee to sign and date the letter upon receipt.

While this sample can serve as a helpful guide as you write your own, it’s always a good idea to review any letter of termination with an employment law attorney to ensure that your letter achieves your goals and limits the legal exposure of your company.

Minimize Terminations by Recruiting Top Talent

If you’re reading this article and reviewing our termination letter template, you may be ready to find a replacement. Just as letting go is never easy, attracting top-fit candidates for your company is one of the hardest tasks there is. Monster’s flexible pricing plans can help you secure right-fit candidates.

Legal Disclaimer: None of the information provided herein constitutes legal advice on behalf of Monster.