What is a letter of termination?

Letter of termination

A letter of termination or letter of dismissal is a written notice detailing the reasons and circumstances for which an employee has been let go from their position.

Whether a letter of termination is required depends on where the employment is taking place. For example, in the United States, a letter of termination is a formality that is not required by federal law. However, some states have passed laws requiring employers to notify workers in writing of the details of their termination.

Some separations can be complex and a record of the circumstances is considered best practice and is often mutually beneficial for both parties involved.

What is in a termination letter?

A termination letter will include basic details like the employee’s name, position, date of termination, and the reason they have been removed from their role. For instance, a termination letter might cite a violation of company policy, instances of inappropriate conduct, or other factors that outline unsuitability for the role.

In the case of the employee being made redundant, a brief explanation of the context (acquisition, economic hardship that affected the company, etc.) may be appropriate.

The letter may also detail how issues like returning equipment, final pay, severance, outstanding customer accounts, and non-disclosure agreements will be handled.

When writing a letter of termination, you should use language that is professional, succinct, and matter-of-fact. You should not use insulting or inflammatory language to belittle or accuse an employee. Rather, a termination letter should share the facts and next steps surrounding an employment separation.

Disclaimer: This article and all information in it is provided for general informational purposes only. It does not, and is not intended to, constitute legal or tax advice. You should consult with a qualified legal or tax professional for advice regarding any legal or tax matter and prior to acting (or refraining from acting) on the basis of any information provided on this website.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, hire, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.