A termination letter is a formal document issued by an employer to an employee that confirms the end of their employment. It serves as both official notice to the employee and a record for the employer’s files.
Termination letters are also known as:
- Letter of termination
- Notice of termination
- Letter of dismissal
- Separation notice
Some states legally require employers to provide such notices, while others use them as best practice to ensure clarity and compliance.
Why Do Employers Use Termination Letters?
Termination letters provide:
- Clarity: Clearly communicates the employee’s final day, reasons (if applicable), and next steps.
- Documentation: Creates a written record in case of future disputes.
- Compliance: Meets state-specific requirements around separation notices.
What Should a Termination Letter Include?
While details vary, a termination letter typically covers:
- Employee’s name, role, and last day of work
- Return of company property instructions
- Information on final paychecks, severance (if applicable), and benefits
- Guidance on continuing healthcare or unemployment benefits
- HR or manager contact information for questions
In at-will employment states, employers may choose not to list a reason for dismissal, though outlining rights and benefits is still required.
Best Practices for Termination Letters
- Keep it professional: Use clear, respectful language.
- Be thorough: Include all necessary details to avoid misunderstandings.
- Deliver carefully: Ideally hand-delivered in a private meeting, but certified mail is acceptable in special cases.
- Retain records: Keep copies for at least two years, or longer if required by state law.
Bottom line: A termination letter formalizes the end of employment, ensures employees understand their rights and obligations, and helps employers remain compliant and protected.
