This is a summary of one of many aspects of  employment regulation in the United States and its territories. Employers should consult an attorney who specializes in labor and employment law about questions applicable to your specific industry.

EMPLOYEE DISCHARGE

Required Compensation
Employees must receive full payment of all wages dues when employment is terminated.  Most employers also pay for "earned, but unused" vacation and sick leave benefits. Employers with 20 or more employees must permit employees who quit, retire to participate in the company's health insurance play.  The ex-employee and dependents must pay 102 percent of the premiums for this protection.  Employees who are discharged for "gross misconduct" can be denied this continued coverage.  (Note: the law does not define "gross misconduct" -- killing a customer obviously would be, "mouthing-off" to a supervisor would not be.)

Termination Procedures
The courts recognize a cause of action for intentional infliction of emotional distress where termination is carried out in an extremely abusive, degrading or humiliating manner.

Discharges, terminations and layoffs  should only be carried out by the topmost executive in the organization, never by an underling.  The decision to discharge, terminate or layoff should be made in consultation with an attorney who specializes in employment law.  Documentation supporting the decision to terminate is essential to defend against charges of discrimination or "fairness". See our Termination Checklist

A GOOD TERMINATION LETTER will save you time and money. A short letter should ALWAYS accompany the final paycheck of every employee who is discharged. A good termination letter will save hours -- maybe days of explaining your actions (to your board of directors, to government agencies, to lawyers and to a judge and jury). A good termination letter is not supposed to be great LITERATURE -- you are FIRING someone, not trying to win a Pulitzer prize. Write a five-paragraph communication that is structured like this:

COMPANY STATIONARY

Paragraph 1. A single declarative sentence TELLING the employee that their employment has been terminated, as of a specific date and time.

Paragraph 2. A single sentence summarizing the employee’s performance shortcomings or disciplinary record. Don’t be accusatory, just outline the facts. Mention that all company termination procedures have been followed fully. (If this discharge has been checked by your attorney, mention this).

Paragraph 3. Explain that the employee’s final pay (including money for all earned, but unused vacation and other leave) accompanies this letter of termination, along with their year-to-date W-2 form. (Mention severance pay if you are giving it...you are not required to.)

Paragraph 4. If the employee is COBRA-eligible, mention the basics: they may continue to participate in your group health plan for up to 18 months -- dependents for up to 36 months; that they pay 102 percent of the premiums. Say complete information about this benefit is available from your HR or personnel office. (COBRA benefits can be denied when discharge is for "gross misconduct" (serious theft, assault, sex harassment, fraud -- is "gross misconduct" -- absenteeism, failing to call in, tardiness or mouthing off to a supervisor is NOT!). Do not deny COBRA benefits without consulting your lawyer -- wrongful denial of this benefit can result in deadly litigation/penalties.

Paragraph 5. Demand (or acknowledge) return of all company property (uniforms, passwords, keys, ID, etc.)

Sincerely,
SIGNATURE OF TOPMOST EXECUTIVE

cc: Superior Court (if pay was garnished)
      Child Support Enforcement Unit (if you were deducting child support)

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Have an in-person meeting and tell the employee they are being discharged.  Hand them a brief letter (signed by the CEO) stating that they have been terminated, effective date and time.  Include a non-accusatory reason for your action (no detailed history of mistakes, failures*) and mention the final paycheck, COBRA eligibility and year-to-date W-2 form you have attached.

Giving References
Employers are sometimes best served by releasing only neutral references (dates of employment, pay rates, and jobs held). While the employer may have what your lawyer calls "a qualified privilege" if a disgruntled former employee sues for defamation based upon an unfavorable reference, a neutral reference is usually the best way to avoid problems -- but in cases involving employee theft or violence, you may be liable for not disclosing that behavior to a prospective employer.

* Every level of management (from immediate supervisors on up) should write a detailed memo that justifies termination -- this should be kept in a file separate from the employee record.

Remember:  If it isn't written down, it never happened!