It is not a pleasant task to issue the pink slip to one of your employees. But when there’s a wrong hiring or a misfit to company culture or some act of indiscipline comes up, it becomes necessary to let the employee go. You can lessen the impact of this act by filling up an employee termination form to help avoid disputes and misunderstandings with the employee.
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Employee Termination Forms
What is an employee termination letter?
An employee termination form is an official document you need to write and issue if you need to terminate the services of an employee from your company. The reason could either be the employee’s non-compliance with company rules or a wrong hiring where an employee is not able to perform up to the level or is simply a misfit for the organizational culture.
Whatever the reason is, you must write this letter to keep things formal and avoid legal hassles. This letter contains the justifications and reasons why you’re releasing the employee from their post.
Employee Termination Letters
What to include?
An effective employee termination letter includes as many details as possible regarding the employee’s termination. Here are the details to include in your employee termination form:
- An explanation of the event that led to the employee’s termination. It could be due to incompetence, misconduct, absenteeism, insubordination, stealing, damaging company property or falsifying records. The letter should include the times and dates of any previous warnings – both verbal and written – about the employee’s behavior if applicable.
- Any expenses your company owe to the employee and when the employee’s benefits will end.
- The effective termination date of the employee.
- A reminder to the employee to give back any company property they have in their possession.
- Details regarding the employee’s severance pay or the payout of their vacation time.
- Details about additional clauses or items like confidentiality.
How do you write a termination letter to an employee?
When creating a termination letter template, you have to be very careful so your employees won’t feel degraded or cheated. This is one reason why writing the letter can be a difficult undertaking.
If your company’s evaluation and disciplinary procedures work well, your employees should already have an inkling of their termination. It is also wise to set up a meeting with the employee to inform them of their termination before sending him the official employee termination form.
There can also be cases when you would let an employee go but only on a temporary basis. This situation is called furloughing. It is partially paid or unpaid for the time-off, during which the employee is usually eligible for benefits like unemployment, health insurance, and others.
Several cases can lead to employee furlough like, for instance, organizational structuring or cost reduction. For this arrangement, you will inform the employee through an employee furlough letter.
When writing a letter of termination or furlough, it’s always in the best interest of everyone to close or pause the employment relationship in good terms, except if you’re terminating the employee for a cause.
These letters help reduce the risk of lawsuits. Here are some things you have to consider when composing these letters:
- It’s recommended to consult with a lawyer to ensure that you are legally allowed to terminate the employee and also, to learn more about the relevant terms. For instance, in some countries, you’re allowed to provide enough notice, reasons or severance pay for termination.
- Decide when is the employee’s last day before the furlough or termination. Do this with the department head or manager of the employee.
- Gather all of the policies that will take effect after you have furloughed or terminated the employee so you can note these in the letter.
- To be more precise about the intent of your letter, use sample letters for your reference. Just mind the tone of your final letter. If necessary, you can ask one of your colleagues in the HR department to proofread the letter for you.
Termination Letter Templates
Terminating an employee properly
Terminating one of your employees is not an easy task and it often results to you getting taxed more through unemployment insurance, especially if you didn’t have a good reason for the termination. This is the main reason why you should handle terminations in a professional way with the proper termination paperwork.
You can use the following guidelines when terminating an employee for the benefit of your employee and your company:
- Give proper notice
The term “enough notice” depends on the employee and your situation in the workplace. If the termination is both cordial and polite, you may want the employee to stay for 2 weeks to finish their work and give them ample time to train their replacement.
But if you have apprehension that the employee might turn hostile or become a distraction to the other employees, you should conduct the termination immediately. Doing this benefits all parties if you make a short and quick transition. - The best day to terminate employees
Again, this depends on the employee but terminating an employee at the middle or beginning of a week can benefit them as it gives them enough time to seek new employment during business hours.
For employees who have displayed erratic behavior, the best day to terminate them is on a Friday. Preferably, do this at the end of your workday. With this approach, you’re giving the employee enough time to collect all of their things without dealing with the embarrassment of having their colleagues watch. - Give notice of the termination
If the employee still has access to your workplace, it’s recommended to meet them in-person to discuss the termination before giving the employee termination form.
It’s appropriate for you to request the employee to hand over all access to the premises. In cases where you have a freelance or remote working relationship, then using the letter for employee termination is the best option. - Inform the employee of end benefits and payroll
These include:
Payroll
It’s your responsibility to end all of the salaries and payments to the employee. In case you’re giving a severance pay, inform your company’s payroll department.
Benefits
You should halt all of the benefits to the employee on the effective date of their termination.
Health Insurance
After termination, it is your employee’s responsibility to get short-term insurance on their own.
Retirement Benefits
Most 401ks can get transferred to an IRA at a bank. Otherwise, things could get complicated. The employee should set a meeting with an accountant to discuss their options.
