Employment Termination Letters
Terminating an employee is not something that most managers enjoy doing. However, sometimes it's necessary in order to maintain the profitable operation of your business. To do so properly, have a meeting to inform the employee personally and prepare a termination letter to make the process final.
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Purpose
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A termination letter formally informs your employee of the end of his employment with your company. You may face a lawsuit from your personnel action one day, and have to explain in court why you fired the employee. Your letter can be used against you if it is not phrased properly. It also may work in your favor if you are able to justify in writing why the employee was terminated. That doesn't mean that it's always necessary to provide ample detail in your letter. It will depend on the employee's status and why you are proceeding with the termination.
For Cause
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If you are firing an employee for cause, or misconduct, whose status is "permanent," you may provide an explanation of termination. Alternatively, if you prefer not to state why because you may be challenged at a future date for not listing every single reason, make sure that there are signed formal documents in the employee file, such as a less than satisfactory performance report, that support ending the employment. If you choose to outline the reason for termination, be as specific as possible in your letter. For example, if the employee was frequently late, list the dates and explain why tardiness merits termination, such as needing to be at the receptionist station to answer phones by a particular time.
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No Reason Stated
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If your employee is on probation as a new hire or the position is designated as "at will," which means that you can fire a worker at any time for any reason, you may proceed with the termination process without an explanation. Although you will be acting legally in most cases, it will not elicit goodwill from the employee who is fired and may result in a wrongful termination lawsuit or a claim of discrimination because the employee is confused and does not understand why.
Considerations
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Regardless of your employee's status as permanent or at will, you may not fire someone for a reason that results in disparate treatment, or another illegal basis. An employee may file a discrimination complaint against your company. Even if you have solid documentation to prove the the termination was for legitimate business reasons, you still will need to spend the time and the money to defend yourself. Also, give the employee all wages due as soon as possible after the last day on the job. If you delay, the employee may file a complaint with your state Department of Labor and you may face fines or other penalties for non-payment of wages.
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