Quick answer
- A termination letter confirms the decision in writing: the effective date, final pay, what happens to benefits, property to return and who to contact. Keep the reason short and factual.
- Final pay deadlines are set by state law, not federal law. California requires payment at the time of discharge, Texas within six calendar days, New York by the next regular payday.
- Add the unemployment notice your state requires (for example California DE 2320, New York IA 12.3, New Jersey BC-10) and send COBRA information on time if you have 20 or more employees.
A termination letter is the written record that an employee's job has ended, why, and what happens next. It does not replace a conversation. You tell the person in a private meeting, then hand over the letter so they have the dates, pay and benefits details in front of them when the meeting is over. The four templates below cover the situations small businesses run into most. Replace every [bracketed] item, delete lines that do not apply, and check the state rules further down before you finalize the letter. This is general information, not legal advice; when the situation is contested or involves a protected leave, a complaint or a discrimination risk, talk to an employment attorney first.
Termination letter templates to copy
Each block copies as plain text, so it pastes cleanly into Google Docs, Word or your HR system. Put the letter on company letterhead and keep a signed copy in the personnel file.
How to choose and fill in the right letter
- Template 1 is for a decision that follows documented coaching or warnings. Cite dates and documents the employee has already seen. If you cannot point to them, slow down: fill the gaps in your records before you decide.
- Template 2 is for a layoff or a position you are not refilling. Saying the decision is not about performance matters to employees and to the state when they file for unemployment. If you include a severance offer, the release should be a separate agreement drafted or reviewed by counsel. Under the Older Workers Benefit Protection Act, the Equal Employment Opportunity Commission says a waiver of age claims from an employee aged 40 or older must allow at least 21 days to consider it (45 days in a group program) and 7 days to revoke after signing.
- Template 3 ends an introductory period. In most states employment is at will before and after that period, so avoid wording that suggests employees can only be let go for cause once they pass it. Montana is the main exception: its Wrongful Discharge from Employment Act generally requires good cause after the probationary period ends.
- Template 4 is for job abandonment. Use it only when your written attendance policy defines it and you have made real attempts to reach the person. Before you send it, check whether the absences might relate to a medical condition, family leave or military duty. Our guide to no-call, no-show policies covers how many missed shifts most employers use and how to document each attempt.
The illustrative severance figure in Template 2 is two weeks of base pay for an employee earning $17.95 an hour on a 40-hour week: 80 × $17.95 = $1,436.00 gross. Replace it with your own numbers.
What to include in an employee termination letter
Every employee termination letter, whatever the reason, should answer the questions people have once the meeting ends. Use this list to check your draft.
| Item | What to write | Why it matters |
|---|---|---|
| Effective date | The last day of employment, and the time if access ends mid-shift | Sets the clock for final pay, benefits and unemployment |
| Reason (brief) | One or two factual sentences that match your records | Must match what you report to the state unemployment agency |
| Final pay | Date, method, and what it includes: hours worked, overtime, commissions earned, PTO payout if required | State deadlines are short, and late pay carries penalties in several states |
| PTO payout | Hours being paid out, or the policy that applies | Some states require payout of earned vacation; others follow your written policy |
| Benefits end date | When health, dental, vision and other coverage ends, and that a COBRA or state continuation notice is coming | Employees plan around the coverage gap |
| Company property | Items to return, by when, and how | Most states limit what you can deduct from wages for unreturned items |
| State notices | The unemployment pamphlet or form your state requires | Several states require it at separation |
| Contact person | Name, phone and email for pay and benefits questions | Keeps follow-up questions away from the former manager |
On PTO payout, there is no federal rule. California, Colorado, Illinois, Massachusetts, Montana and Nebraska are among the states that treat earned vacation as wages owed at separation, while many others follow your written policy. Our paid time off guide has the state-by-state payout table. Whatever you decide, the letter should say the same thing your employee handbook says.
Be careful with deductions. Taking the cost of an unreturned uniform or tablet out of a final check is restricted or banned in many states, and under federal law a deduction cannot drop a non-exempt employee below minimum wage. Ask for the property back instead, and check your state rules before deducting anything.
Final paycheck deadlines by state
The US Department of Labor says federal law does not require employers to give former employees their final paycheck immediately. The deadline comes from state law, and it is often different for a firing or layoff than for a resignation. Here is a handful of common states, as published by each state's labor agency or statute:
| State | Employer ends employment | Employee quits |
|---|---|---|
| California | Immediately at the time of discharge, including accrued vacation (Labor Code 201, 227.3) | Within 72 hours, or on the last day if the employee gave at least 72 hours' notice |
| Colorado | Immediately; if the payroll unit is not working, within six hours of the start of its next regular workday (24 hours if payroll is off-site) | Next regular payday |
| Massachusetts | In full on the day of discharge (M.G.L. c. 149, s. 148) | Next regular payday |
| Texas | Within six calendar days of discharge (Texas Payday Law) | Next regularly scheduled payday |
| Illinois | At separation if possible, and no later than the next regularly scheduled payday | Same |
| New York | No later than the regular payday for the pay period in which employment ended (Labor Law 191) | Same |
| Washington | At the end of the established pay period (RCW 49.48.010) | Same |
Penalties make this worth getting right. In California, the Labor Commissioner's Office says an employer that willfully fails to pay final wages on time can owe a waiting time penalty of the employee's daily rate of pay for each day the wages are late, up to 30 days. Our California overtime law guide explains the penalty and the daily overtime that often ends up in the same final check. Texas employers can find the full Payday Law rules, including the 180-day claim deadline, in our Texas minimum wage guide. For any state not listed, check the state labor department before the termination meeting, not after.
An illustrative example: a line cook in Austin earning $18.40 an hour is let go on a Tuesday after working 22 hours that pay period, with 12 hours of unused PTO that the written policy says is paid out. The final check is 22 × $18.40 = $404.80 for hours worked plus 12 × $18.40 = $220.80 for PTO, a total of $625.60 gross, due within six calendar days under the Texas Payday Law.
Benefits end dates and COBRA notice timing
Your letter should give the date coverage ends and say that a separate continuation notice is coming. The details of that notice depend on federal COBRA rules. According to the Department of Labor's Employee Benefits Security Administration (EBSA):
- Who is covered. COBRA generally applies to group health plans of private employers with 20 or more employees on more than 50% of typical business days in the prior calendar year. Many states have their own continuation laws that reach smaller employers, often through the insurer.
- Employer notice. The employer must notify the plan administrator within 30 days of a qualifying event. Termination, for any reason other than gross misconduct, is a qualifying event.
- Election notice. The plan administrator then has 14 days to send the election notice to the employee and covered family members. When the employer is also the plan administrator, the regulation at 29 CFR 2590.606-4 allows 44 days in total.
- Election period and length. The employee gets at least 60 days to elect coverage, and coverage after a termination or reduction in hours generally lasts up to 18 months.
- Cost. The plan can charge up to 102% of the plan's cost.
Most small employers rely on their insurer, broker or benefits administrator to send the COBRA election notice. Confirm who sends it, and tell them the termination date the same day.
State unemployment notices to include
Several states require employers to give separating employees a specific unemployment insurance form or pamphlet. A few examples, based on each state agency's guidance:
- California. The Employment Development Department (EDD) says employers must immediately give written notice to employees who are fired, laid off or placed on leave, and lists the DE 2320, For Your Benefit: California's Programs for the Unemployed, among the pamphlets to provide. Enclose a current copy from the EDD site.
- New York. The Department of Labor's Record of Employment, Form IA 12.3, must be completed and given to each worker who is laid off, discharged, quits or has hours reduced to 30 or less a week.
- Illinois. Illinois Department of Employment Security (IDES) rules require the pamphlet What Every Worker Should Know About Unemployment Insurance for workers separated for an expected 7 days or more, at separation or mailed within 5 days if handing it over is not practical.
- New Jersey. The Department of Labor and Workforce Development requires Form BC-10, Instructions for Claiming Unemployment Benefits, at the time of separation, whether permanent or temporary.
Other states have their own forms, and the list changes. Search your state workforce agency's employer page for "separation notice" before each termination, and keep a copy of what you gave the employee.
Layoffs and the WARN Act
If you are laying off a group rather than one person, check the federal Worker Adjustment and Retraining Notification (WARN) Act before you send any letter of termination. According to the Department of Labor's Employment and Training Administration:
- WARN covers employers with 100 or more employees, not counting employees who have worked less than six months in the last 12 months or who average fewer than 20 hours a week (or 100 or more employees who together work at least 4,000 hours a week, excluding overtime).
- Covered employers must give at least 60 calendar days' written notice before a plant closing or mass layoff, to affected employees or their representatives, the state dislocated worker unit and the chief elected local official.
- A plant closing is triggered when a shutdown causes 50 or more employees at a single site to lose their jobs in a 30-day period. A mass layoff is 50 to 499 employees at a single site who make up at least 33% of the workforce there, or 500 or more employees regardless of percentage.
Several states, including California, New York and New Jersey, have their own versions with lower thresholds or longer notice periods. A small business with one location rarely hits the federal numbers, but a regional chain closing a store can. If you are close, get advice before you set dates.
What not to say in a termination letter
- Anything that does not match your records. If the letter says "performance" and the unemployment response says "misconduct," the inconsistency becomes the story.
- Protected characteristics or activity. No references to age, pregnancy, disability, medical leave, workers' compensation claims, complaints, or talking with coworkers about pay.
- Opinions and labels. Write "missed four scheduled shifts between October 6 and October 20," not "unreliable" or "bad attitude."
- Promises about unemployment. The state decides eligibility. Do not tell the employee they will or will not get benefits.
- A long list of every problem. One or two documented reasons are enough. A list that grows in the letter looks like you are building a case after the fact.
- Apologies that blur the decision. Be kind, but do not suggest the decision might change.
How to deliver the letter
- Prepare. Have the letter, the final paycheck (where state law requires it at discharge), any required state forms and a property return list ready before the meeting. Decide who will turn off system access, and when.
- Meet in private, with a witness. A manager and a second person, such as the owner or HR lead, in a private room or a video call. Schedule it early in a shift so the person is not leaving in front of a full crew.
- Be brief and direct. State the decision in the first minute, give the reason in one or two sentences, and then cover pay, benefits and property. Do not debate past warnings.
- Hand over the letter and ask for an acknowledgment of receipt. If they decline to sign, note the date and have the witness initial it.
- Send a copy by email to their personal address, so you have a delivery record.
- Follow up. Run final pay on time, notify the benefits administrator, and remove the person from future shifts so coworkers are not left short.
For job abandonment, there is no meeting. Send the letter by email and by mail to the last address on file, and keep proof of both.
Documentation to keep
Keep a copy of the signed letter, prior warnings and reviews, attendance records, the final pay stub, any state forms you gave, the COBRA notice date and notes from the meeting. Attendance records are usually the strongest evidence in attendance-based terminations, so make sure your attendance policy and your time clock records agree. Federal payroll record rules require you to keep payroll records for at least three years and timecards for two, and many states require longer.
Termination letter checklist
- Decision reviewed against your records, policy and any recent leave, complaint or accommodation request.
- Correct template chosen, every [bracket] filled, and the reason matches documents the employee has seen.
- Final pay calculated: hours, overtime, earned commissions and PTO payout if required, ready by your state's deadline.
- Benefits end date confirmed with the insurer or administrator, and the COBRA or state continuation notice scheduled.
- State unemployment notice printed and enclosed.
- WARN and state mini-WARN rules checked for group layoffs.
- Property return list and access shutdown time agreed.
- Meeting scheduled with a witness; email copy ready to send.
- Everything filed in the personnel record.
Frequently asked questions
Is a termination letter required by law?
No federal law requires one, and most states do not require a letter explaining the reason. Some states do require written notice of the separation itself or an unemployment form, such as California's DE 2320, New York's IA 12.3 and New Jersey's BC-10. A short letter is still the easiest way to give dates, pay and benefits details in writing.
Do I have to give a reason in a termination letter?
In an at-will state you usually do not have to state a reason, but a short, factual reason that matches your records is often safer than silence or a vague one. A few states let former employees request a written statement of the reason, so check your state. Whatever you write, it must match what you tell the unemployment agency.
When is the final paycheck due after a termination?
It depends on the state, because federal law sets no deadline. California and Massachusetts require payment at the time of discharge, Colorado requires it immediately with a short window if payroll is closed, Texas allows six calendar days, and New York, Illinois and Washington allow until the regular payday. Check your state labor department before the meeting.
Should I email a termination letter or hand it over in person?
Tell the employee in a private meeting and hand them the letter at the end, then send a copy by email so you have a delivery record. Use email or certified mail alone only when a meeting is not possible, such as job abandonment or a remote employee who will not join a call.
Can an employee get unemployment after being fired?
Often, yes. Each state decides eligibility, and many deny benefits only for misconduct as the state defines it, not for poor performance or a layoff. The employer does not decide eligibility, so the letter should not promise or rule out benefits. Respond to the state's request for separation information accurately and on time.