Employee Termination Checklist: A Comprehensive Template for HR

By Cam Velasco

CEO & Co-Founder
Published: Mar 3, 2024
Handling employee termination is a delicate process that requires careful planning and execution to ensure fairness, compliance with legal standards, and to maintain a positive work environment. This comprehensive guide covers everything HR needs to know.
Close-up of a hand with a pink highlighter marking checkboxes on a structured checklist document.

Handling employee termination is a delicate process that requires careful planning and execution to ensure fairness, compliance with legal standards, and to maintain a positive work environment. This comprehensive guide covers everything HR needs to know

Types of Employee Terminations

There are several reasons why someone might stop working at a company:

Voluntary resignation

This is when someone decides to leave their job on their own. Reasons might include not being happy at work, finding a better job, retiring, needing to take care of family, health issues, and so on. They usually say they’re leaving by giving a resignation letter.

Involuntary termination

This is when the company decides to end the job. This includes:

Layoffs/downsizing

When the company needs to let go of employees because of money problems or changing what’s important in the company.

Firing/dismissal

When an employee is let go because they’re not doing their job well, behaving badly, breaking rules, etc.

Position elimination

When a specific job is no longer needed.

Retirement

When someone leaves their job because they’ve reached the age where they don’t have to work anymore according to the company’s rules.

Mutual agreement

When both the employee and the company agree it’s best to end the job.

End of contract/temporary work

For people who were hired for a specific time or project.

No matter why someone’s leaving, it’s important to handle it carefully to keep things positive and make sure everything’s done right legally.

Employee termination: Legal and Ethical Obligations

When someone’s job ends, companies need to do things by the book and treat the person leaving fairly, including:

  • Giving enough warning as required by law and company rules
  • Continuing to pay them and provide benefits during the warning period
  • Paying for unused vacation days, bonuses, and so on
  • Not treating anyone unfairly
  • Letting the person take their personal stuff
  • Having a professional talk about why they’re leaving (exit interview)
  • If they ask, giving them a letter saying they did a good job
  • Making sure company and personal information stays safe
  • Telling other people at the company about the job ending in a nice way

Doing things thoughtfully and fairly lowers the chance of legal problems and keeps the company’s good name. It’s all about being clear, kind, and planning ahead.

Preparing for Employee Termination

Review Employment Agreement

Before letting an employee go, it’s essential to carefully look over their job contract, offer letter, rules about leaving the job, and any other important papers they signed. This helps figure out things like how much notice you need to give them, if they get extra pay for leaving, and any rules they need to follow after leaving. Writing down what you find helps make sure you’re doing everything right and following the rules.

Things HR should check and write down:

  • How much notice you need to give before letting someone go
  • Any extra money or benefits the employee should get when they leave
  • Rules about not working for competitors or sharing secrets
  • What happens with stock options
  • How to handle unused vacation time
  • When and how to give the last paycheck

Understanding these details helps HR make sure everything is done correctly and by the rules when someone leaves the job.

Notify HR Department

After deciding to let an employee go, tell HR as soon as you can before the meeting where you’ll let the employee know. This gives HR enough time to get ready.

Things HR needs to do before the meeting:

  • Look over the employment agreement as mentioned
  • Get the letter that says the employee is leaving ready and check it with a lawyer
  • Decide on the last day of work
  • Figure out the last paycheck and how/when to pay it
  • Make a list of things the employee needs to do before they leave
  • Plan a meeting to talk about why they’re leaving (exit interview)
  • Turn off their access badge
  • Start shutting down their email and logins
  • Let the people who handle pay and benefits know someone is leaving

Writing down that you’ve done these things is important not just for following rules, but also to make sure the employee leaves smoothly. By preparing ahead of time, HR can help make the meeting and what comes after go as smoothly as possible.

Schedule Employee Termination Meeting

When planning a termination meeting, keep these tips in mind:

  • Set aside enough time for a full conversation. Aim for at least 30 minutes to go over everything and answer any questions.
  • Try to have the meeting at the end of the day or week. This gives the person being let go some time to think things over.
  • Choose a private spot for the meeting to avoid being overheard.
  • Make sure the meeting includes the employee’s direct boss to show the decision is agreed upon by the company.
Communicate with Empathy

It’s important to be kind and understanding when sharing termination news. Here’s how:

  • Start with kindness and respect. Understand that this news is hard to hear.
  • Explain why the termination is happening in a simple and clear way. Have any documents that support your reasons ready.
  • Listen well and give the person space to take in the news.
  • Answer any questions and handle objections with calmness.
  • Offer help where you can, like severance, recommendations, or help finding a new job.
  • End by thanking them for their time at the company.
Issue Formal Notice

To officially let the employee know they’re being terminated:

  • Write a termination letter that includes the last day of work, details about severance, how benefits will continue, and the reason for being let go. Make sure a lawyer looks it over.
  • Print two copies of the letter to give to the employee.
  • First, tell them verbally about the decision with empathy, then hand them the letter.
  • Explain what comes next, like:
  • Giving back company stuff
  • Handing over work tasks
  • Getting their last paycheck

Being professional and kind during the termination meeting can lead to a better outcome for everyone.

Post Employee Termination Steps

Process Final Pay and Benefits

After the employee leaves, HR has to sort out their last paycheck and benefits. Here’s what to do:

  • Figure out the last paycheck amount including money for unused vacation days and any other wages owed. Make sure it’s right.
  • Decide how and when to give the final pay. This could be through direct deposit or a paper check, depending on what the law says.
  • Let the payroll department know so they can get the last paycheck ready.
  • Give the employee a letter that tells them when their benefits like health insurance will stop. Explain options for extending benefits if possible.
  • Arrange for any severance pay if the employee is supposed to get it when they leave.
  • Check if the employee owes the company any money and sort that out.

Double-checking these things with the legal and finance teams helps avoid problems. It’s important to do this the right way to keep up the company’s good standards.

Retrieve Company Property

Make a list of all the company stuff the employee needs to return. This usually includes:

  • Laptops
  • Tablets
  • Mobile phones
  • ID badges
  • Keys/access cards
  • Company credit cards
  • Files and documents

Have someone from HR meet the employee to get these items back. Give them a receipt for what they return. Send any electronics to the IT team to erase and get ready for someone else to use. Destroy any paper documents to keep information safe.

Revoke Access

Work with the IT team to stop the employee’s access to things like:

  • Email accounts
  • Company networks/servers
  • Software applications
  • VPN and remote access
  • Building access badges

Make sure to check and double-check that the employee can’t get into any company systems or buildings. Keeping everything secure protects the company’s information and resources.

Conducting an Employee Termination Exit Interview

Exit interviews are a key step when someone leaves their job. They help us understand why they’re leaving and what we can do better. Here’s how to make these interviews useful and respectful.

Why Conduct an Exit Interview

Exit interviews are important because they:

  • Let us know why someone decided to leave
  • Give us feedback on what it’s like to work here, including management and company culture
  • Highlight any issues we might need to fix
  • Help us end things on a good note

This feedback can help us keep our employees happier and more engaged in the future.

Tips for Productive Exit Interviews

To have a good exit interview, try these tips:

Schedule the interview ahead of time – Don’t wait until their last day. Give them a chance to think about what they want to say.

Pick a quiet, neutral place – This makes it easier to talk openly.

Prepare your questions – Know what you want to ask, but also let the conversation flow naturally. Ask for more details when you need them.

Listen without arguing – The point is to understand their point of view.

Take notes – Write down what they say, especially specific examples.

Finish on a positive note – Thank them for their time and wish them well. Let them know you value their feedback.

Sample Exit Interview Questions

Here are some questions you might ask:

  • Why are you leaving the company?
  • What did you enjoy most and least about working here?
  • Did you feel supported and appreciated? How so?
  • Were there any big challenges that made your job harder?
  • How do you feel about your manager’s leadership style?
  • How would you describe the company’s culture and work environment?
  • Do you have any ideas on how we can keep our employees happier?

Remember, follow-up questions are important to really understand their feedback. Listen closely and dig deeper when you need to.

By planning and encouraging honest talk, HR can learn a lot from exit interviews. Understanding why people leave can help us make things better.

Finalizing the Employee Termination

Update Employee Records

After someone’s job ends, it’s key to make sure all their work records are up to date. Here’s what needs to happen:

  • Write down the details about them leaving, like their last work day and why they’re going.
  • In the HR computer system, mark them as “terminated”.
  • Keep all the paperwork about them leaving, like the goodbye letter, in their file for later.
  • Make sure the payroll and benefits systems know to stop taking out money for things like health insurance, and to give any final money owed.
  • If they were let go for work reasons, keep a record of any problems or times they were told off.
Notify Relevant Departments

It’s important to quickly tell the right people and teams that the employee is leaving:

  • IT department: They need to stop the person’s access to email and computer systems.
  • Department manager: They should know so they can plan who will take over the work.
  • Team members: Let them know in a way that’s respectful and keeps private stuff private.
  • Facilities/Security team: Tell them to cancel any building entry cards or keys.
  • Phone/Internet providers: If the company gave the person a phone or other devices, those services need to be stopped or changed.
  • Vendors/partners: If the person worked closely with any outside groups, those groups should be informed.

When sharing news about someone leaving, it’s key to keep it professional and only share what’s needed. If employees have questions, they should feel okay asking their manager or HR.

Making sure everyone who needs to know is informed helps everything go smoothly after someone leaves.

Keeping Things Friendly

Even when someone has to leave their job, it’s still important to stay on good terms. Here’s how to do it right:

Have a goodbye chat

A goodbye chat, or exit interview, lets the person leaving share their thoughts about working with you. It’s a nice way to part ways on a friendly note.

  • Ask them what they liked and didn’t like about the job
  • Listen to any ideas they have for making things better
  • Say thank you for all the work they’ve done
Help out if you can

If it makes sense, offer to help them find a new job by giving them a reference or introducing them to someone else.

Stay in touch

Check in with them after they’ve left to see how they’re doing. Keeping in touch means you might work together again in the future.

Plan for their work to continue

Make sure there’s a plan for someone else to take over their tasks. This helps keep everything running smoothly.

Let people know the right way

When telling your team about someone leaving, be respectful. Talk about the good things they did and wish them well. This shows everyone that it’s possible to leave on a good note.

By being thoughtful about how someone leaves, companies can keep a good relationship and reputation, even when it’s time to say goodbye. Being kind and understanding makes the whole process easier for everyone.

Employee Termination Legal and Compliance Checklist

When it’s time to let an employee go, it’s really important to make sure everything is done by the book. This means following all the rules and laws, so both the company and the employee are treated fairly.

Review Relevant Laws
  • Look into the laws at the federal, state, and local level about things like how much notice you need to give, final paychecks, benefits after leaving, severance pay, and making sure not to discriminate. It might be a good idea to talk to a lawyer to make sure you’ve got it all covered.
  • If you’re letting go of a lot of people at once, check the rules about giving everyone a heads-up (this is called the WARN Act).
  • Make sure you’ve done everything the law requires, like giving the right notices and waiting the right amount of time.
Verify Compliance Areas
  • Make sure the reason for letting someone go is clear, legal, and fair.
  • Check that you followed all the rules in the employee handbook about how to handle things like performance, discipline, and taking time off.
  • Look at any contracts or agreements to see if there are special rules about ending the job or paying severance.
Protect Confidential Data
  • Remind the employee about keeping company secrets, especially if they signed a non-disclosure agreement.
  • Cut off their access to any important company or customer information.
Finalize Financial Obligations
  • Work out the final paycheck, including any extra pay for overtime, bonuses, or money back for expenses.
  • Explain what will happen with their benefits, like health insurance, and if they can keep them going (this is called Cobra).

By carefully checking that you’re following all the laws and rules, you can make sure the process of letting someone go is fair and keeps you out of trouble.

Reviewing Employee Termination Policies

It’s really important to keep checking and updating how we say goodbye to employees to make sure we’re doing it right and fairly. Here’s how to do it:

Evaluating Current Policies
  • Every 6 to 12 months, take a look at your rules for letting people go to make sure they still make sense and follow the law.
  • Think about how recent goodbyes went to see if there’s anything you need to change.
  • Ask your HR team what they think could be better based on their experience.
  • Use what people say in exit interviews and stay interviews to get a sense of what could be improved from the employee’s point of view.
Updating Based on Findings
  • Talk to a lawyer to help update your policies if you need to.
  • Make sure everyone knows about any changes before you start using them.
  • Teach managers about the new ways of doing things with training sessions or online courses.
Maintaining Compliance
  • Twice a year, check to make sure you’re still following the law as it changes.
  • Have HR folks sit in on goodbye meetings to make sure everything goes by the book.
  • Keep detailed records of every time someone leaves, including why they left and all the steps you took.

By regularly looking at and improving your policies for when people leave, you can make sure you’re being fair, staying out of legal trouble, and treating people right. It takes teamwork, good communication, and a promise to keep getting better.

Conclusion

It’s really important for businesses to have a clear plan for when someone leaves their job. This plan, or checklist, helps make sure that the process is smooth and follows the law. By getting ready ahead of time, talking carefully about the job ending, taking back company stuff safely, having good exit chats, and always looking at how things are done, businesses can handle these situations in a kind and professional way.

Even though it’s tough to say goodbye to a team member, having a plan helps everyone. A checklist shows exactly what needs to be done, from looking at contracts to sorting out final pay and benefits. Working together with different departments like Legal, IT, HR, and managers helps make sure everything from getting back company property to turning off access is done right.

Having a set way of doing things also lowers the chance of legal problems about things like unfair treatment, problems with severance pay, losing important data, and saying bad things about someone. If there are any legal issues, having records that show you did everything properly can really help. Having clear meetings about the job ending also stops any confusion that might come from a tough situation.

Exit chats are also a great way to learn how to keep people happier and maybe even stop others from leaving. If many people are leaving because of the same reasons, like pay or not liking the work culture, it’s a sign that something needs to change. This feedback can help make the workplace better.

While there’s no perfect way to handle someone leaving, having a checklist makes sure things are done the same way each time. Businesses should adjust their checklists to fit their own way of doing things and the laws of where they are. It’s also good to look over how things are done, especially after a difficult goodbye, to keep improving.

With a bit of care and planning, both the business and the person leaving can feel okay about the situation. The better these goodbyes are handled, the better the company looks to everyone else.

Related Questions

What are the 7 steps that concerns HR in terminating employees?

The 7 key steps HR should focus on when firing employees are:

  • Writing down why the employee is being let go and the process used
  • Keeping a record of any past problems or times the employee didn’t do well
  • Trying to fix things after a suspension, if that applies
  • Looking at the laws of the state and country to make sure everything is done right
  • Making sure not to fire someone in a way that’s unfair or breaks the law
  • Officially ending the job with a written notice
  • Having a detailed chat with the employee about why they’re leaving (exit interview)

What should be included in an Employee termination checklist?

A full checklist for when an employee leaves should have:

  • Talking to the employee, their boss, and anyone else who needs to know
  • Getting the notice that says they’re being let go ready
  • Giving the employee their termination letter
  • Having an exit interview
  • Getting back anything that belongs to the company
  • Making sure the employee can no longer get into the building or computer systems
  • Handling their last paycheck and updating their employment record
  • Taking care of things like health insurance

What should HR say during Employee termination?

During a meeting to let an employee go, HR should:

  • Clearly say that the employee’s job is ending
  • Mention any past problems with their work, if that’s why they’re being let go
  • Explain the reasons in a way that’s kind and clear
  • Listen to what the employee has to say and answer their questions
  • Be honest and patient in responding
  • Offer help like severance pay if it’s available
  • End by saying thank you and wishing them well

How HR can terminate employees?

HR can let employees go by:

  • Looking into and writing down the reasons for the termination
  • Talking with managers about the employee’s performance
  • Checking the employment contract and HR rules
  • Planning a meeting to tell the employee they’re being let go
  • Writing a formal letter to end the job
  • Meeting with the employee to talk about the decision
  • Taking care of their final paycheck and cutting off their access to the company
  • Having an exit interview

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Cam Velasco

CEO & Co-Founder

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