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What is a termination letter?

What's included and why they're provided

A termination letter, also known as a pink slip or a dismissal letter, serves as a written notice that your employment has ended or will terminate on a certain date.

Employers usually provide these letters after you've attended a termination meeting with your human resources representative or supervisor.

What topics does a termination letter usually cover?

Along with basic information about the employee, most termination letters address the following:

Reason for termination

Employers may provide the reason for termination, along with details documenting any performance problems or negligence issues. But since many employers have an at-will employment policy that doesn't require them to provide a reason for termination, that reason might simply be a confirmation of their at-will policy.

Employee obligations

In some instances, you might be obligated to return company property upon termination. A dismissal letter often lists items that need to be returned, like ID badges, company-owned computers and cell phones, and even vehicles. The letter will also often specify a deadline for returning these items to your former employer.

Company obligations

In almost all cases, businesses must provide you with your final paychecks after termination (and must do so within a certain period of time). The dismissal letter might specify when you will receive your final paycheck or where you can retrieve it. If a business provides employees with severance pay, the dismissal letter will often include the terms of payment, length of time, and any other information regarding benefits.

Special cases

If you have the opportunity to receive a severance package, you might be required to accept certain conditions. The termination letter might also detail applicable confidentiality agreements or understandings not to compete.

Why do employers provide termination letters?

Employers offer letters of dismissal for a number of reasons, and not all workplaces provide them for the same purposes. In many cases, employers provide letters in order to document their process and cover their bases in the event that you dispute your termination.

In other cases, employers provide them in order to provide information about layoffs and detail severance benefits. When additional benefits are involved, employers will often ask you to sign the letter to confirm your acceptance of the benefits and any related conditions.

What are the main benefits of termination letters?

One of the biggest benefits of a termination notice is that it often provides you with the documentation you need to file for unemployment benefits. While eligibility and benefits can vary from state to state, most jurisdictions require your employer to terminate your employment before you can claim unemployment.

Another primary benefit of this letter is that it can provide important details as you arrange for health insurance continuation or apply for a new health insurance policy. Since most termination notices include your final date of employment, this information can prove valuable as you ensure continued coverage for you and your family.

Also, as you leave your former employer and apply for new jobs, your termination letter can also serve as proof of your work history. In some cases, the letter can verify your prior employment, which is particularly important if you work in health care or child care. If you opt to pursue a wrongful termination case, the letter might also be able to provide evidence of unfairness.

Are termination letters required by law?

Federal laws do not require employers to provide a letter of dismissal that describes the events leading up to termination. The only documentation that federal law requires employers to provide is information regarding Consolidated Omnibus Benefits Reconciliation Act (COBRA) continuation of benefits and Worker Adjustment and Retraining Notification (WARN) for some layoffs.

That said, many state laws require employers to provide letters that include details like the employee's position and dates of employment, which may serve as employment verification letters. If your employer doesn't provide a letter detailing your service upon termination, you might be able to request one in writing at a later date. Some states require former employers to produce service letters within a certain timeframe after a request.

Even if you quit, your employer might still be required to give you a termination letter to confirm your work history and dates. If you're unsure about the employee termination laws in your state or you want to understand more about your rights as an employee, an employment attorney can help provide further guidance.

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