Tag: termination

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Severance pay & final paycheck laws by state (2025)

Astronaut holding a paycheck

Summary

  • There are no state or federal laws regarding severance pay.

  • Organizations might consider implementing severance pay agreements to improve employer-employee relations, boost employer branding, strengthen retention and acquisition, and avoid legal disputes. 

  • While there are no federal or state laws in relation to severance pay, there are state laws on when an employee’s final paycheck is to be processed. – More

Have you ever considered the critical role that severance pay plays in protecting your organization and its employees during workforce transitions? Severance pay refers to the financial compensation provided by an employer to an employee upon termination of employment. It is typically based on factors such as length of employment and employment contract terms. 

Click here to see final paycheck laws

Severance benefits provide the terminated employee with a vital safety net, offering financial support and stability for people until they find a new job. They also offer significant benefits for organizations. 

Severance pay helps maintain employee morale and fosters a positive work environment during challenging workforce transitions. By including severance pay as part of your compensation package, you demonstrate your commitment to supporting employees and enhancing the organization’s reputation as a compassionate and responsible employer.

What does the law say about severance pay?

Neither federal nor state laws in the United States mandate severance pay. The U.S. Department of Labor clarifies that “severance pay is a matter of agreement between an employer and an employee (or the employee’s representative),” with no requirement under the Fair Labor Standards Act (FLSA).

However, it’s important to note that certain circumstances may trigger legal requirements related to severance pay. One such regulation is the Worker Adjustment and Retraining Notification (WARN) Act. The WARN Act applies to businesses with a certain number of employees and requires employers to provide advance notice of plant closings or mass layoffs. While the WARN Act doesn’t specifically mandate severance pay, it may come into play in situations where employers fail to comply with the required notice period.

Employers should know the WARN Act’s provisions and seek legal advice to ensure compliance when contemplating workforce reductions or closures. Although severance pay is not universally mandated, employers must navigate these potential legal considerations and make informed decisions to uphold fairness, ethical practices, and employee welfare if they are to offer it as an employee benefit.

Should your organization consider offering severance packages? 

In the absence of any state or federal law, is it worth offering severance packages to soon-to-be former employees? There are a number of pros and cons to including severance agreements in your company policies. Understanding these can help you make an informed decision that aligns with your organization’s values and goals.

The benefits of offering severance pay include the following:

  1. Employee transition support: Severance pay provides employees with a cushion to manage the transitional period between jobs. It can help cover expenses such as job search costs, the continuation of health insurance, and retraining and facilitate a smoother transition to new employment.
  2. Positive employer-employee relationships: Providing severance pay builds trust and fosters a positive relationship between employers and employees. It sends a message that the organization cares about its workforce beyond just their time of employment, strengthening loyalty and engagement. This positive relationship can increase productivity, employee satisfaction, and a more supportive work environment overall.
  3. Talent acquisition and retention: Offering severance pay as part of your compensation package can attract top talent to your organization. Prospective employees may view it as a sign of a supportive and compassionate workplace, increasing their interest in joining your team. Moreover, existing employees may feel more secure and committed, knowing that the organization values their well-being, potentially reducing turnover rates.
  4. Mitigation of potential legal risks: Although it’s not part of any employment law, offering severance pay can help mitigate potential legal risks. By providing a fair and structured severance package and establishing clear terms for separation in your employee handbook, you minimize the likelihood of unpleasant legal disputes.

The drawbacks of offering severance pay include:

  1. Financial impact: Severance pay can be a significant financial commitment for organizations, especially during large-scale layoffs or restructuring. Considering the potential costs and ensuring that offering severance packages aligns with your budgetary constraints is essential.
  2. Setting a precedent: Offering severance pay may establish a precedent for future terminations or workforce transitions. Establishing consistent HR policies and guidelines is crucial to avoid perceived inequalities or inconsistencies in severance package offerings.
  3. Impact on retention and turnover: While severance pay can support departing employees, it may also inadvertently encourage voluntary turnover. Some employees may view the availability of severance pay as an opportunity to leave the organization, potentially impacting retention efforts.

Webinar: How to Increase Manager Retention

Ultimately, the decision to offer severance packages should be based on your organization’s unique circumstances, values, and long-term objectives. By carefully considering the pros and cons, you can strike a balance that supports both your employees and your organizational goals.

Scenarios where severance pay might be beneficial

Severance pay is a valuable resource for employers and employees during workforce transitions. By exploring these scenarios, we can shed light on the benefits of severance pay and its role in supporting employees during critical moments of job loss or transition.

  • Workforce reductions or layoffs: During times of downsizing, layoffs, or restructuring, offering severance pay can help ease the financial impact on affected employees. It provides them with a lump sum or structured payments based on their service length, helping bridge the gap between jobs and maintain a sense of financial security.
  • Employment termination without cause:  When terminating an employee without cause, offering severance pay can mitigate the potential legal risks associated with such terminations. It demonstrates fairness and goodwill, providing a financial cushion to support the employee during their job search or transition period.
  • Non-compete and confidentiality agreements: In situations where employers require employees to sign non-compete or confidentiality agreements, offering severance pay can provide a financial incentive for departing employees to uphold their obligations, protecting the employer’s business interests.

It is important to note that the applicability and specifics of severance pay may vary based on the employer’s policy, employment agreements, and applicable federal and state laws for things like insurance benefits, unemployment benefits, non-compete clauses, and unused vacation. It is good practice to consult employment attorneys to ensure compliance and fairness.

Final paycheck laws

While there are no specific federal or state laws mandating severance pay, “final paycheck” laws surrounding termination of employment vary between states. Final paycheck laws dictate the timing and requirements for providing employees with their last paycheck after leaving a job.

Final paycheck laws refer to the legal regulations employers must adhere to when issuing final payments to employees leaving their positions. These laws cover aspects such as the timeframe for payment, differentiating between voluntary resignations and involuntary terminations, and whether accrued vacation time should be included in the final payment. The specifics of these laws can vary significantly from state to state, so it’s crucial to understand and comply with the regulations that apply to your jurisdiction.

To assist you in navigating the intricacies of final paycheck laws, we have compiled a comprehensive table outlining the specific requirements and guidelines for each state in the US as of 2023. In the table, we have differentiated between situations where an employee resigns voluntarily or if they are fired. For more in-depth information, click on the respective state hyperlinks. 

State Final wages (voluntary resignation) Final wages (if employee is fired)
Alabama N/A N/A
Alaska Paid by the next scheduled payday that is at least three (3) working days after their last day worked. Within three (3) working days of termination (not counting weekends and holidays)
Arizona Paid by the next scheduled payday Within seven (7) business days or the next payday (whichever is sooner)
Arkansas Paid by the next scheduled payday Paid by the next scheduled payday. If employers fail to do so within seven (7) days of the next regular payday, they must pay double the wages due
California Within 72 hours or at the time of quitting (time periods may vary by industry) Immediately
(time periods may vary by industry)
Colorado Paid by the next scheduled payday Immediately 
Connecticut Paid by the next scheduled payday Paid by the next business day if discharged or fired. Next regular payday if laid off.
Delaware Paid by the next scheduled payday Paid by the next scheduled payday
District of Columbia Within seven (7) business days or the next payday (whichever is sooner) Paid by the next business day
Florida N/A N/A
Georgia N/A N/A
Hawaii Immediately or next scheduled payday, depending on date of final notice Immediately or next business day
Idaho 1) Within ten (10) working days or the next payday, or 2) if the employee requests an earlier payment in writing, it must be within 48 hours of receiving the request (whichever is sooner) 1) Within ten (10) working days or the next payday, or 2) if the employee requests an earlier payment in writing, it must be within 48 hours of receiving the request (whichever is sooner)
Illinois Paid by the next scheduled payday Paid by the next scheduled payday
Indiana Paid by the next scheduled payday Paid by the next scheduled payday
Iowa Paid by the next scheduled payday Paid by the next scheduled payday
Kansas Paid by the next scheduled payday Paid by the next scheduled payday
Kentucky Paid within fourteen (14) days or the next scheduled payday (whichever is later) Paid within fourteen (14) days or the next scheduled payday (whichever is later)
Louisiana Paid by the next scheduled payday or within fifteen (15) days (whichever is sooner) Paid by the next scheduled payday or within fifteen (15) days (whichever is sooner)
Maine Paid by the next scheduled payday Paid by the next scheduled payday
Maryland Paid by the next scheduled payday Paid by the next scheduled payday
Massachusetts  Paid by the next scheduled payday or, in the absence of a regular payday, the Saturday that follows an employee’s resignation Immediately
Michigan Paid by the next scheduled payday. For employees engaged in any phase of the hand harvesting of crops, final pay must be given within 1 working day of termination. Paid by the next scheduled payday. For employees engaged in any phase of the hand harvesting of crops, final pay must be given within 1 working day of termination.
Minnesota Paid by the next scheduled payday that’s at least five (5) days after an employee’s last day but no more than 20 days after their final day Within 24 hours of receiving a demand from employee
Mississippi N/A N/A
Missouri N/A Immediately
Montana Paid by the next scheduled payday or fifteen (15) calendar days (whichever is sooner) Immediately (within four hours or end of the business day, whichever occurs first)OR

In presence of a written policy that extends the time for payment, the wages may not be delayed beyond the next payday or fifteen (15) calendar days (whichever is sooner)
Nebraska Paid by the next scheduled payday or within two (2) weeks (whichever is sooner) Paid by the next scheduled payday or within two (2) weeks (whichever is sooner)
Nevada Paid by the next scheduled payday or within seven (7) days (whichever is sooner) Within three (3) days
New Hampshire Paid by the next scheduled payday or within 72 hours (if employee gives notice of at least one pay period) Within 72 hours of time of termination
New Jersey Paid by the next scheduled payday Paid by the next scheduled payday
New Mexico Paid by the next scheduled payday, unless there’s a written contract stating a designated period Within five (5) days after termination. But if pay calculation is based on tasks or commissions, final paycheck must be paid in 10 days.
New York Paid by the next scheduled payday Paid by the next scheduled payday
North Carolina Paid by the next scheduled payday Paid by the next scheduled payday
North Dakota Paid by the next scheduled payday As agreed upon by both parties. If there’s no agreement, the employee must pay via certified mail at an address designated by the employee.
Ohio Next regular payday or within 15 days of termination, whichever comes sooner. Next regular payday or within 15 days of termination, whichever comes sooner.
Oklahoma Paid by the next scheduled payday Paid by the next scheduled payday
Oregon Immediately if the employee gave 48 hours’ notice. Otherwise, within five (5) days or the next scheduled payday (whichever comes first) Next business day
Pennsylvania Paid by the next scheduled payday Paid by the next scheduled payday
Rhode Island Paid by the next scheduled payday or paid within 24 hours if the termination is a result of the liquidation, merger, disposal, or moving of the business out of state. Paid by the next scheduled payday or within 24 hours if the termination is a result of liquidation, merges, disposing of the business or moving the business out of state.
South Carolina Within 48 hours or the next scheduled payday — not to exceed 30 days Within 48 hours or the next scheduled payday — not to exceed 30 days
South Dakota Paid by the next scheduled payday or when employee returns any company property Paid by the next scheduled payday or when employee returns any company property
Tennessee Paid by the next scheduled payday or within 21 days (whichever occurs last) Paid by the next scheduled payday or within 21 days (whichever occurs last)
Texas Paid by the next scheduled payday Within six (6) days
Utah Within 24 hours Within 24 hours
Vermont Paid by the next scheduled payday, or, if there is no regular payday, the following Friday  Within 72 hours
Virginia Paid by the next scheduled payday Paid by the next scheduled payday
Washington Paid by the next scheduled payday Paid by the next scheduled payday
West Virginia Paid by the next scheduled payday Paid by the next scheduled payday
Wisconsin Paid by the next scheduled payday Paid by the next scheduled payday or 24 hours if the termination is due to a merge, company liquidation, or ceasing business operations
Wyoming Paid by the next scheduled payday Paid by the next scheduled payday

Get final paychecks right with Workforce.com

Regardless of the reason why you’re issuing a final paycheck, may it be due to voluntary resignation or laying off employees, you need to get their final paychecks right – from computation to timely release. However, it can get complicated because of varying state rules. 

Webinar: How to Tackle Critical Workplace Issues

Workforce.com’s payroll platform ensures that final paycheck computations are correct according to applicable state rules. It also takes into account everything that goes into that final paycheck, from deductions, accrued PTOs, time worked all within the scope of your company policies and that of the state or federal government. 

Saying goodbye to employees, regardless of the circumstances, is never easy. Workforce.com helps lighten the administrative load, ensuring a smooth offboarding process and fostering an amicable end to the employment relationship.

Discover how Workforce.com can simplify payroll and HR processes for your hourly teams. Book a demo today. 

This information is for general purposes only and should not be considered legal advice. While we strive to keep it updated, laws and regulations can change at any time. It’s always a good idea to consult with a legal professional or relevant authorities to compliance with the most current standards.

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How to Terminate an Employee: Essential Dos and Don’ts

Summary:

  • Employee termination is a delicate art of upholding company policies and maintaining a good relationship with employees leaving the company. When handled wrong, it can result in legal repercussions.
  • Having a policy for how to terminate employees is vital. But knowing when to do it is equally crucial.
  • Use an official Employee Termination Letter when letting someone go. Also, be sure to properly document performance records and calculate final paychecks in your HR & Payroll system.

Terminating an employee is a challenging yet sensitive process for managers and business owners. It requires a balance of empathy, professionalism, and strict adherence to legal and organizational policies. When handled correctly, it can protect the company’s reputation, maintain team morale, and uphold the dignity of the departing employee. On the other hand, mishandling employee termination can lead to legal repercussions, a toxic work environment, and damage to company culture. 

Here’s a rundown of best practices on what you must do and mistakes to avoid to ensure that your employee termination process is carried out with fairness, compassion, and respect for all parties involved. 

The Dos

Do follow company policy and legal requirements. 

Every organization should have a policy regarding employee terminations. This policy goes beyond a list of paperwork and items that employees need to return before they leave. With this in place, you would have a clear framework and set of steps to follow when letting go of an employee. 

There are several reasons why employees need to be let go, and your termination policy should clearly outline a process for when such conditions are met. Employment typically ends for the following reasons: 

  • Voluntary termination happens when employees decide to leave an organization. Once an employee turns in their resignation or notice, the turnover period usually lasts two weeks to a month, depending on what’s stated in your company policies or what you have discussed with the employee.

The steps for when an employee resigns are pretty straightforward. They will be given a list of things they need to return and informed of when they can receive their final paycheck.

  • Involuntary termination happens when the employer initiates it, and there are several reasons why employers can do so. First, companies experience changes that prompt them to downsize, let go of redundant roles, lay off employees, implement furloughs, or close the business completely. Second, employees fail to perform or commit major violations or offenses.  

Involuntary termination is more challenging to navigate because more legalities must be accounted for. For instance, is the employee given ample opportunity to improve if the termination is due to poor performance? Was the issue communicated clearly to them? You may be liable under the law if you answer no to both questions. 

Your termination policy should clearly state offboarding processes specific to the nature of the termination. More importantly, every rule should adhere to applicable labor laws to avoid non-compliance and potential lawsuits.

For instance, there are employment laws governing when final paychecks should be released. Depending on what states you operate in, you would need to release the final paycheck on the actual last day, the next scheduled payday, or a specific number of days after the termination of employment. Here’s an updated guide on severance pay and final pay rules for 2024. 

Lastly, this policy should be included in the employee handbook.

Do comply with all applicable termination laws.

The dismissal process is straightforward if an employee leaves your company on their own accord. All you need to do is determine their last working day, prepare the necessary paperwork, provide a list of things and responsibilities the departing employee needs to turn over and issue the final pay. 

However, if an employee needs to go for involuntary reasons, you must take additional steps to ensure a smooth and compliant transition. Get thorough legal counsel to ensure that you comply with all termination laws that apply to your business. In particular, ensure you are following your state’s final paycheck regulations. 

Do document everything

Prepare the necessary documentation ahead of time. While nearly every state in the US adheres to the employment-at-will doctrine, it’s good practice to have a paper trail of performance evaluations and disciplinary records that support your reasoning for terminating an employee. You should also create a termination letter, an official document to notify employees that they are being let go. It must include the reason for termination, effective date, and next steps, such as turning over company assets and releasing final pay.

Termination letters may seem straightforward, but you must be careful when writing them. As an official document, they should stand in court if needed. Ensure that they are factual and include all the necessary information. Here’s a free template and guide to writing employee termination letters.

In addition to the termination letter, it is good to prepare and refer to employment contracts and other vital data that will help the employees understand why they are being let go. If you offer a severance package, discuss what’s included and how it will be computed.

Do have a termination meeting to notify the employee privately. 

Regardless of the reason, it would be best to notify the employee privately that they are being let go. It’s never easy to receive such news, and doing it in front of others will make it even more painful. 

A face-to-face meeting keeps their dignity intact, especially if they are being let go for job performance issues. 

It is important to keep these meetings short, straightforward, and professional. During the meeting, present them with the facts, such as the reason for the employment termination, what company property they need to return, when they can expect their final pay, and other next steps. End the meeting amicably, wish them well, and thank them for contributing to the company. 

Consider recording the meeting to ensure that all your bases are covered. Be sure to inform the employee beforehand that the meeting will be recorded. 

Do have a witness when notifying employees that they are being terminated. 

Having a third party present during the meeting is another good idea, both for the employee and the manager. 

Typically, the witness is a human resources person. HR professionals are well-versed and have the expertise to handle terminations, and it can help frontline managers carry out an otherwise daunting task. 

Do provide assistance when possible. 

Depending on the termination circumstances, consider offering recommendation letters to terminated employees to help them find new employment. This can be an excellent way to end things amicably, especially for team members who are let go because of downsizing or layoffs.

The Don’ts

Don’t dismiss employees without personally talking to them. 

Firing someone is never easy and typically comes as a blow, especially for unexpected reasons like layoffs or something more sensitive like “for cause” termination. 

While a termination letter is, in principle, a tool to notify employees that they are being let go, it’s not advisable to deliver the news through this channel only. Think of it as documentation that makes everything official and prevents legal repercussions. But at the end of the day, it’s merely that—a formality. 

When letting people go, it’s best to talk to them in person before presenting formal letters and documentation. A face-to-face dialogue helps soften the blow, demonstrates respect, and allows employees to ask questions regarding the termination. 

Don’t terminate employees on a whim. 

Termination should always be the final recourse because firing an employee without due process can have legal consequences. Letting people go should never be a knee-jerk reaction to the first sign of financial challenges, unsatisfactory performance, or conflict with other staff.

If a team member is not performing up to par, consider putting them under a performance improvement plan or PIP. A PIP is a documented program to help underperforming staff members improve. If an employee falls short of the goals set under the PIP, then termination should be considered. Here’s a guide and free template for creating a performance improvement plan. 

Even if an employee violates a company policy, firing them on the first offense is often not wise. Make sure that they are given the chance to correct their behavior and provide warnings accordingly. There should also be ample investigation and facts before letting employees go due to offenses like tardiness or conflict with another co-worker.

Also read: 3 Mistakes with Employee Conflict Resolution – How to Avoid

Don’t overlook the right timing. 

When it comes to employee termination, the when is equally important as the how. 

While it seems there’s never a right time to announce that an employee is being let go, it’s still essential to time it well. In some cases, firing people at the wrong time can even result in legal risks. 

So when is it NOT advisable to terminate an employee? When they are on medical leave. While an employee who’s under FMLA leave is not exempt from termination, you need to tread carefully. Certain conditions need to be met before you can let go of an employee undergoing said leave. Make sure to consult with your legal team to handle it properly. 

Other times when it’s not advisable to fire employees include: 

  • When they are going through difficult challenges, such as getting diagnosed with a severe illness or getting divorced
  • When they are on vacation or about to celebrate their birthday
  • During December or January, when they would be dealing with the holidays and the bills that come with it
  • During Fridays, because employees may have questions or clarifications. If termination is done close to EOD or on the weekend, it’s not helpful to wait through the weekend before they can get answers or details. Doing it during the midweek is the best way to go. 

Timing is crucial because it can result in a legal issue. However, whether there is a legal risk or not, it’s best to terminate employees with as much consideration as possible. Look into how much your operations could allow and time the termination accordingly. Losing a job is the last thing anyone would want. Make it as manageable for your employees as possible. 

Don’t forget to check in with remaining staff members. 

Employee termination can also affect staff who remain with the company. Ensure you check in with current team members to see how they feel about the situation. 

It’s normal for the remaining staff to feel anxious about their employment, especially after layoffs. Schedule a time to sit with them so you can address their concerns. Use this opportunity to gauge your team’s sentiments and take quick action if you think they are likely to disengage and quit. 

After terminations, it’s best to stay transparent with the remaining team. Have an open-door policy and answer their questions honestly. 

Don’t insinuate that the decision is not final. 

Don’t give false hopes when breaking the news to employees. It has to be clear and direct that they are being let go, and nothing can alter that decision. Don’t allow room for any vagueness or misinterpretation, whether verbal or written.

Don’t part ways on a bad note. 

Terminations, for whatever reason, will never be a comfortable discussion. However, it’s always best to part ways amicably with a departing employee. Even if there’s conflict, it’s pointless to rehash the negative things that happened. At this point, it’s best to focus on the positive sides of their tenure with the organization. 

Say goodbye on a positive note, or at the very least on a professional and civil level. If you think that there’s a risk of violence, have someone nearby to assist you, and don’t engage. 

Workforce.com can help lighten the load of employee termination

There are a lot of areas concerning employee termination, and Workforce.com can help simplify them for you.

Employee termination usually requires extensive documentation of time and attendance, performance reviews, payroll details, and other information related to calculating final pay. Workforce.com can help you gather all of this data and streamline the termination process.

Discover more about how Workforce.com can help you. Book a demo today. 

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Termination Letter to Employee [Template + Example]

Summary

  • An employee termination letter is an official document given to employees to notify them that they are being let go. It should include the reason for termination, effective date, and next steps.

  • Employee termination letters should include the reason for termination, effective date, and next steps. They should be concise, factual, and carefully written.

  • While a termination letter is vital to the offboarding process, sometimes it is simply not enough. Most times it is essential to sit down with an employee face-to-face. 

An employee termination letter is vital to letting people go regardless of the reason. It is a written form of documentation that officially declares the termination of employment.

To check out some examples and templates, click here.

While termination letters may sound straightforward, there’s actually a lot that goes into them – and for good reason. Getting them wrong can lead to all kinds of issues for your organization down the road. So, let’s take a look at some ways to get termination letters right. 

Why are termination letters important?

Short answer: to avoid legal trouble.  

A termination letter should stand in court if ever the need arises. It’s crucial to make it airtight and leave no room for doubt and misinterpretation. If an employee feels they have been unfairly terminated, the letter may be used to point out discrepancies or unfair employment practices. 

Aside from legal issues, termination letters also play a role in ending things amicably with your employees. While it should sound direct and objective, a properly curated termination letter should provide every vital detail relating to the termination, such as the reason for termination, when it takes effect, and final compensation.

What an employee termination letter should include

While terminating an employee is never a pleasant experience, you can soften the blow by doing it properly – writing a sound termination letter is a critical part of this. Here are some things that every termination letter should include:

Basic details

First, a letter should include the who, what, and when. It must clearly state that it’s for ending employment, who it is for, and when it will take effect. It also should include contact information in case the employee needs more information or has questions. 

Reason for termination

The reason for termination is at the heart of this document, and the letter should be able to clearly state why an employee is being let go. Typically, termination is warranted due to the following reasons:

  • Downsizing or laying off – One of the top reasons for letting employees go is downsizing. If you’re writing a termination letter for this reason, you must explain the need to downsize and why their position is affected. 
  • For cause – In some cases, employees are let go due to cause, such as violating company policies, unsatisfactory performance, misconduct, stealing or damaging company property, chronic tardiness, absenteeism, and falsifying company records. Letting go of staff for cause tends to be more complicated because, without documented proof and HR references, an employer’s cause can be called into question. It helps to consult with your legal team to ensure that you’re adhering to all relevant company policies and labor laws.
  • Termination of contract – This reason is typical for freelance workers and happens when a project ends or if there’s no need for the services anymore.

Best practices for writing a termination letter 

While undoubtedly difficult for both the employee and employer, following proper termination protocol can really minimize the burden and stress felt by both parties. Here are some tips for doing just that:

Include all the necessary information

As mentioned, a termination letter is formal documentation that, if need be, should stand in court. It has to be direct and very specific. A suitable termination letter answers the following questions:

  1. When will the employment officially end?
  2. Why is the employee being let go? 
  3. When can they expect their final paycheck, and how much will it be?
  4. What will happen to their employee benefits?
  5. On their end, what are the next steps they need to take (e.g., returning company property)
  6. Who can they contact should they have follow-up questions?

While a termination letter should be concise, don’t hesitate to include as much relevant information as possible. This is especially important if an employee is being terminated for cause. Include information such as policies violated, a timeline of events, performance reviews, and investigation results.

For instance, if an employee is being let go for time and attendance issues, provide a record of their absenteeism or tardiness using data from a workforce management and/or HR system. 

Webinar: How to Reduce Absenteeism

Use the right tone

A termination letter is a formal document, so it needs to sound professional and direct. While the goal is to end the employment amicably, the termination letter is not the place to be sarcastic, candid, or drop jokes. Instead, state the necessary information and make sure that everything is clear.

Consult your legal team

Consulting with your legal department helps termination letters be more airtight and solid. While termination letters are all routine, there’s always that risk of overlooking minute but vital details. So get legal advice and take time and go over your company’s termination policy, making sure the letter aligns with it. 

In some cases, legal advice can also help you determine if termination is really the right thing to do. For instance, you’re terminating an employee for absenteeism. Is termination the right step at this time? Did the employee receive warnings before termination? Again, your legal team can help spot these potential issues before you even send that letter and risk legal repercussions later.   

Pair it with a meeting

Before you serve the termination notice, it’s best to speak with your employees. While termination always comes with a shock, having a face-to-face meeting about it helps soften the blow. 

A conversation adds face-to-face honesty and human respect to the termination process – elements not found in a black-and-white letter. No one wants to open their email and see that they’ve been let go and their employee access revoked. It’s an unfortunate situation, but having some warning can help employees manage better.

Termination letter due to cause – Template

Download template here

(Date)

Subject line: Notice of termination

Dear (employee name), 

This letter is to inform you that your employment as (name of position) at (company name) is officially terminated effective (date of termination). 

You have been terminated due to the following reasons:

(A detailed list or explanation of why you are terminating the employee. Include timelines, incident reports, investigation details, a list of policies violated, and other relevant information.)

Please surrender the following by (date):

(a list of company property endorsed to the employee)

Access to (platforms and tools) will also be revoked by (date and time). 

Please expect to receive your last pay by (date). Your final paycheck will include (salary, leave encashment, or other benefits). A detailed computation breakdown will also be provided.

In addition, keep in mind that you have signed (agreements or policies such as confidentiality agreements, NDAs, and non-compete documents). Attached are copies of said documents for your reference. 

If you have any questions, you may contact (name of company representative) at (contact details). 

Regards, 

(Name), (Position)

(Company name)

Termination letter due to cause – Example

Download template here

Date: February 27, 2023

Subject line: Notice of termination

Dear Michael Smith, 

This letter is to inform you that your employment as Sales Associate at Retail Company will be officially terminated effective February 28, 2023. 

You have been terminated due to excessive tardiness. According to company policy, an employee should not exceed 7 days of coming late to work in a month. Employees are considered late when they arrive 16 minutes past their scheduled start time. The first offense will result in a verbal warning. The second offense will result in a written warning. The third offense will result in a 14-day suspension without pay. The fourth and final offense will result in termination. 

Based on your recent timesheet records, you have been late for 11 days in February. 

Prior to this incident, the following sanctions were also administered due to your tardiness:

    • December 29, 2022 – You were given a verbal warning for your excessive tardiness and for being late for 8 days in December. We scheduled a check-in after two weeks to see if your attendance improved.
    • January 12, 2023 – You were given a written warning and were asked to explain why you’re always coming in late, and you attributed it to heavy morning traffic. To help with your predicament, your supervisor scheduled you for afternoon shifts for the next two weeks. 
    • January 26, 2023 – Because your attendance didn’t improve and you were late for 10 days in January, you were served a suspension period of 14 days without pay. This also served as your last warning. 
    • February 24, 2023 – Upon checking your timesheet records, you have been late for 11 days in February. 

After deliberating with the management team, we deem that termination is the best course of action. Evidently, the lates were excessive and had been going on for consecutive months, despite scheduling adjustments. 

Please surrender your company ID, store key, and company-issued uniform by February 28, 2023. Also, your access to the company time and attendance platform will be revoked on the same date. 

In addition, please keep in mind that you have signed a confidentiality agreement with us. Please see attached document for your reference. 

If you have any questions, you may contact Shelly Harper at shellyharper@retailcompany.com. 

Regards, 

Jack Foster

Head of Human Resources, Retail Company

Termination letter due to layoffs – Template

Download template here

(Date)

Subject line: Company layoff

Dear (employee name),

We regret to inform you that (name of company) needs to let some of its employees go due to (reason for laying off). Unfortunately, your role is affected, and we would need to end your employment effective on (date). 

We understand this will cause challenges for you, and we intend to make the offboarding process smooth for everyone. 

The breakdown and computation of your final pay will be sent to you by (date), and you shall receive your last paycheck by (date). 

We also request you return the following company-issued items on or before (date):

(list of company property endorsed to the employee)

Please be informed that your access to (company tools and platforms) will be revoked by (date). 

We appreciate the time you have worked with us and wish you all the best in the future. 

For any questions, please don’t hesitate to contact (name of company representative) at (contact details). 

Sincerely,

(Name)

(Position), (Company name)

Termination letter due to layoffs – Example

Download template here

March 16, 2023

Subject line: Company layoff

Dear Stephen Simmons,

We regret to inform you that IT Company needs to let some of its employees go due to financial difficulties. Unfortunately, your role as IT Specialist is affected, and we would need to end your employment effective on March 24, 2023. 

We understand this will cause challenges for you, and we intend to make the offboarding process smooth for everyone. 

The breakdown and computation of your final pay will be sent to you by March 22, 2023, and you shall receive your last paycheck by March 24, 2023. 

We also request you return your work laptop and company ID on or before March 24, 2023. In addition, access to your company email, IT database and tools, and workforce management system will also be revoked by March 24, 2023. 

Your medical and other benefits will remain effective until March 31, 2023. 

We thank you for the time you have worked with us, and we wish you all the best in the future. 

For any questions, please don’t hesitate to contact Heather Watson at heather@ITcompany.com. 

Sincerely,

Chris Mitchell

Head of Human Resources, IT Company

Termination letter ending contract – Template

(Date)

Subject line: End of contract

Dear (name), 

Please be informed that we no longer require your services by (date). 

We thank you for providing us with excellent (type of service), but due to (reasons), we had to end our contract. 

Please submit all pending deliverables by (date). We will settle all outstanding bills by (date), so please send all invoices by (date). 

In addition, please be advised that you will lose access to (company-owned platforms and tools) by (date).

Once again, we thank you for your time working with us. We wish you all the best in your future projects. 

Please feel free to reach out to (name) at (contact information) if you have any questions. 

Sincerely, 

(Name)

(Position), (Company Name) 

Termination letter ending contract – Example

March 16, 2023

Subject line: End of contract

Dear Judith McCain, 

Please be informed that Advertising Company no longer requires your services by March 24, 2023. 

We thank you for providing us with excellent copywriting and content services. Unfortunately, however, the project has ended, and we also need to end your contract. 

Please submit all pending deliverables by March 21, 2023. On our end, we will settle all outstanding bills by the same date. Therefore, please send all invoices by March 22, 2023, so we can pay you promptly. 

In addition, please be advised that you will lose access to our content management system, project board, and internal messaging tool by March 24, 2023.

Once again, we thank you for your time working with us. We wish you all the best in your future projects. 

Please feel free to reach out to me if you have any questions. 

Sincerely, 

Faye Smith

Creative Director, Advertising Company

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Workplace things COVID has not changed: You can still fire dishonest employees

Suppose an employee leaves work claiming COVID-like symptoms. He then calls off work for the next two weeks, claiming he is quarantining at home at his doctor’s recommendation.

Can you fire the employee during that quarantine period? Does your opinion change if you learn during the quarantine that the employee’s doctor never recommended the quarantine and the employee lied about receiving that recommendation?

Those are the basic facts of O’Bryan v. Joe Taylor Restoration, and upon which a federal court jury in southern Florida recently entered a verdict in favor of the employer.

O’Bryan’s lawsuit claimed that his employer had denied him paid sick leave under the FFCRA during his quarantine and retaliated against him for seeking paid sick leave. The employer uncovered his dishonesty when it saw a discrepancy between the alleged note ordering the quarantine and a later note authorizing his return to work.
COVID has altered a lot about the workplace. Thankfully, however, the ability of an employer to fire a dishonest employee has not been one of them.
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Fired for COVID-19 or fired for irresponsibility?

COVID-19, coronavirus, public health crisis

Prada v. Trifecta Productions, filed a few weeks ago in federal court in Ann Arbor, Michigan, asks whether an employer can legally fire an employee with COVID-19 based on the perception that the employee’s out-of-work activities placed the business at risk.

The facts are fairly simple. Nicolas Prada worked as a waiter and assistant manager at Tomukun Noodle Bar. On  June 24 he began experiencing COVID-19 symptoms and stayed home from work. He tested positive three days later. After 14 days of isolation, Prada texted his employer about being medically cleared to return to work.

During a follow-up phone call, Prada claims the restaurant’s owner interrogated him about his activities before falling ill. According to the complaint, “Mr. Yon asked Plaintiff how he contracted the virus,” interrogated him about whether he had “been out partying and acting irresponsible,” told him “there was evidence on social media of Plaintiff being in a crowd,” and that he should “begin looking for work” because for “PR reasons” it was best for him “not to come back to work.”

Prada quit the next day, and later sued for interference and retaliation under the FFCRA.

In a vacuum, Prada had a right to job restoration under the FFCRA. However, there is at least one key fact missing from his complaint — was he “out partying and acting irresponsibly” before contracting the virus. If so (and it’s a big if), his employer had a legitimate non-discriminatory and non-retaliatory reason for terminating his employment.

I’m not sure I’d terminate in these circumstances, but I can understand why an employer might. Here’s what I wrote two months ago discussing the Cleveland Indians’ suspension of two pitchers for violating team rules during a road trip by leaving the hotel to party:

Your business may not be able to dictate how your employees spend their free time, but you can hold them to consequences if they choose to act irresponsibly when “off the clock.” We are living through a pandemic. Every employee has a responsibility to their employer, their co-workers, and the business to make sure that they do what they can to avoid bringing COVID-19 into the workplace, and every employer has the same responsibility to take reasonable steps to prevent an at-risk employee from entering the workplace when it’s discovered.

These are strange times for sure, and I will not fault any employer that errs on the side of caution in how it manages its employee respective to mitigating workplace coronavirus exposures. I’m not advocating for, or in favor of, employer monitoring of employee off-duty conduct. If, however, irresponsible, reckless or dangerous behavior comes to an employer’s attention, it shouldn’t ignore it in the name of privacy either.

In this case Prada had served his isolation, and according to his complaint was medically cleared to return to work. The risk this employer was mitigating was not the risk of an employee bringing an active virus into the workplace, but according to the complaint, the public relations risk of an employee being seen partying on social media. For a public-facing employer, I’m not going to backseat-drive its decision.

This will be a fascinating case to watch, which I’ll be updating everyone as it winds its way through the courts.

Posted on

The 9th nominee for the Worst Employer of 2020 is … the COVID denier

COVID-19, workforce management WFM 2.0, ethics

The human resources manager for a New Hampshire company is suing her former employer after she sent an email about COVID-19 to employees and required two employees to stay home for one week after going on vacations to China and Malaysia.

She claims company officials told her she was being fired for “exaggerating ‘the China Virus.’”

The New Hampshire Union Leader has the details:

Debra Di Nola worked for Freudenberg-NOK Sealing Technologies Inc., a German company, since 2014. …

On Jan. 29, two managers asked Di Nola to advise them on two employees returning from China and Malaysia, respectively, out of concerns about COVID-19. After looking into recommendations from the Centers for Disease Control and Prevention and the state Department of Health and Human Services, Di Nola required the two employees to stay home for a week, according to the suit.

Di Nola claims a vice president of the company said “he could not work with her and did not trust her” during a meeting on Feb. 11. She was asked to leave.

“(The vice president) accused Dr. Di Nola of exaggerating ‘the China virus,’” the suit reads.

A few days later — Feb. 17 — the vice president fired Di Nola. The suit claims the vice president escorted Di Nola out of the building as other employees arrived for work.

For its part, the employer claims that it fired Di Nola for legitimate non-discriminatory performance reasons, including her lack of attention to detail, her relationship with a subordinate, her lack of engagement with employees and her repeated exaggerations and misrepresentations.
Nevertheless, if you fire an employee for exaggerating “the China virus,” you might be the worst employer of 2020.
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Coronavirus Update: The coming wave of Covid-related age discrimination lawsuits

employment law

The EEOC has sued Ohio State University for age discrimination, alleging that the school discriminated against a 53-year-old human resources generalist because of his age by assigning a substantial substantial portion of his duties to a short-tenured co-worker 25 years his junior.

“If a termination is age-discriminatory, dis­guising it behind a supposed reduction in force will not change that,” says EEOC Regional Attorney Debra Lawrence in discussing the filing of the lawsuit.

What does this lawsuit, which challenges a termination that occurred all the way back in March 2018, have to do with the COVID-19 pandemic?

According to this article in the ABA Journal, it is reasonable to expect a flood of age discrimination lawsuits from COVID-19 and the economic downturn it has caused.

“My clients are being told they’re laid off because of COVID and are asking why the kid they trained for two years still has a job,” says Stephen Console of Console Mattiacci Law in Philadelphia, who’s filed about 30 age and disability discrimination cases with administrative agencies since the pandemic started. “The question is what criteria they’re using to say who stays and who goes.”

Employers need to be vigilant in laying off older workers. “High risk for Covid” and “highly compensated” might by proxies for age discrimination. Moreover, if your RIF includes most or all of your older workers and retains most or all of your younger workers, it’s going to look like you are using COVID-19 to mask a discriminatory intent. Simply, you cannot use a COVID-19 reduction in force to purge your workplace of older workers. The EEOC and the plaintiff’s bar are watching.
Posted on

If your employee treats COVID-19 like a hoax

terminate firing

At the always fabulous Ask a Manager, Alison Green posts the following question:

One of my employees has been vocal about the coronavirus being a hoax. I had to have a talk with him during our last few days in the office at the end of March because he was openly criticizing and mocking coworkers for “being afraid of the flu” and practicing social distancing. While the rest of us isolated and worked at home, he went on two different vacations out of the state and did not isolate upon returning as required.

We’re now phasing people back into the office, and he believes that all of the safety guidelines are violating his freedom. He still won’t practice social distancing without being told, he will not wear a mask without being told, and he even planned another vacation when the company has asked us not to travel except in the case of emergencies. …

I am at an absolute loss regarding how to get this employee to take these safety precautions seriously when he still sees the coronavirus as a political issue instead of a public health issue. I am very worried that he will bring the virus into the office and get others sick. Do you have any advice for handling this employee and protecting the rest of my staff?

Alison suggests that this employer “should be prepared to fire him.” I couldn’t agree more, and would go one step further and just say that this employer should fire him, period.
COVID-19 is not a hoax, it’s a public health emergency. There are rules businesses must follow as a condition to reopen and stay open during this pandemic, including the maintenance and enforcement of certain basic safety guidelines such as social distancing and face masks.
If an employee is refusing to follow these rules for any reason, that employee is putting the health and safety of the business’s employees, customers, other visitors, and their family members at risk. That employee has no place remaining employed. If you’ve counseled and warned and the behavior hasn’t changed, you’ve done all you can do.
If, as Alison suggests in her answer, you want to offer the employee one final warning, I’m okay with that. This employer, however, has done everything it can to secure compliance with its safety rules, and the employee has still failed to comply. If the employee genuinely believes that COVID-19 is a hoax and that safety rules are “violating his freedom,” nothing an employer says or does will change his mind or secure compliance. It will be a constant battle against an employee who refuses to believe science and do what is necessary to protect himself and others.
I see little choice other than pulling the plug, terminating the employee, and letting him take his backward and dangerous thinking elsewhere.
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Tesla fires workers for staying home after giving them permission to stay home

reopen businesses

“Carlos, there is no need to feel that you are going to lose your job. If at this time you do not feel comfortable returning to work, you can stay home without penalty and take the time unpaid.”

That email, sent from Tesla’s acting human resources director to a now terminated employee, will be central to that employee’s wrongful termination lawsuit pending against the automaker.

The employee claims that Tesla retaliated against him because he pressured the company to release information about its health and safety protocols following reports of employees testing positive for coronavirus after returning to work in late May.

The timing does not look great for Tesla. The “you can stay home without penalty” email came one day before the employee spoke out against Tesla at a news conference about conditions at the plant and his fear of returning to work … and one day prior to Tesla emailing the employee to tell him his job was at risk.

Within hours of that news conference, Tesla’s human resources department emailed a “Failure to Return to Work” notice, advising of termination without an immediate return to work. The employee (and a co-worker who received a similar notice and also openly questioned the company’s safety during the pandemic) opted to remain on unpaid leaves because of their health and safety concerns. They claim their terminations are in retaliation for their vocal questioning of their employer’s commitment to safely reopening and operating its manufacturing plant.

Also read: Lawsuit highlights risk of businesses not reopening safely and correctly

There is nothing inherently unlawful about ending an employee’s leave of absence and requiring their return to work (even during this pandemic). However, when an employer ends the leave within hours of an employee openly and vocally challenging health and safety issues, retaliation becomes a real concern.

Whistleblower retaliation is one of the biggest legal risks facing employers during this pandemic. OSHA, the National Labor Relations Act, and myriad state laws protect employees from retaliation for raising health and safety concerns at work. Instead of risking a lawsuit by removing a “difficult” employee from the workplace, employers should view them as an opportunity to improve. Why are they raising issues? How do they feel unsafe? What can we do to improve and make all employees feel safer? If we are doing everything we can to provide as safe of a workplace as possible, how do we communicate that fact to employees?

Also read: When employees return to work, consider these guidelines

Far from an opportunity to terminate, employee health and safety complaints (always, but especially during this pandemic) present an opportunity to listen, improve, and strengthen your relationship with your employees. Employers that do not understand this opportunity are risking dangerous and costly retaliation lawsuits.

Also read: COVID-19 and workers’ compensation

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You have every right to be a 𝘤𝘰𝘷𝘪𝘥𝘪𝘰𝘵, and we have every right to fire you for it

termination, covidiot, workplace violence, gun, weapon
“Covidiot: A person who acts like an irresponsible idiot during the COVID-19 pandemic, ignoring common sense, decency, science, and professional advice leading to the further spread of the virus and needless deaths of thousands.”
A Dallas law firm has terminated the employment of a document services manager after it discovered his threatening, offensive, racist and very public Facebook post taking issue with mandatory face masks.
“No more masks. Any business that tells me to put on a mask (Whole Foods on Lomo Alto) in Dallas will get told to kiss my Corona ass and will lose my business forever. It’s time to stop this BULLSHIT. Do I have to show the lame security guard outside of a ghetto store my CV19 test results? I will show him my Glock 21 shooting range results. With Hornady hollow points. Pricey ammo, but worth it in this situation. They have reached the limit. I have more power than they do…..they just don’t know it yet.”
Bain’s post, which any reasonable person would interpret as just plain wrong, resulted in his termination. As my friend Eric Meyer pointed out yesterday (borrowing from a comment on the Facebook page of Bain’s former employer): “Freedom of speech doesn’t mean freedom from consequences for that speech.”
In other words, you have the right to your opinion, no matter how offensive. But once you share that opinion publicly, we have the right to fire you for it … coronavirus or no coronavirus.
COVID-19 might have temporarily upended our world, but just cause for termination is still just cause for termination. So please don’t be a covidiot. Employers don’t like firing people under the best of circumstances. We especially don’t like doing so now. But we will if we have to.