Your Complete Checklist for Employee Terminations

your complete checklist for employee terminations

An employee termination checklist is a crucial tool for streamlining and simplifying the employee termination process.

The Importance of a Checklist for Employee Termination

An employee termination checklist standardizes the termination process and decreases the likelihood of missing important steps. Missing steps in the termination process could result in legal consequences in the future.

There are various reasons for an employee leaving your company. In some instances, the decision to leave a company was their own and they are leaving your company on great terms. In other instances, their employment needs to be terminated and you are anticipating a tough or uncomfortable interaction.

Whether an employee is involuntarily or voluntarily terminated, an employee termination checklist must be used.

An employee leaving a company can be emotional for everyone involved in the termination process but a great termination checklist can decrease the emotionality of the situation and keep all parties involved as focused and professional as possible.

An employee termination checklist can be designed differently depending on your business's preferences. Whether you choose to create a physical checklist or leave spaces for written comments is completely up to your business.

Many businesses chose to use a hybrid form that includes both a checklist and additional spaces for written comments. For fired employees, a supplemental script to read from can be very helpful to keep the person terminating the employee calm and collected.

It is absolutely critical that state, federal, and local regulations are being followed throughout the entire termination process. Whether your company has a legal department or you need to seek outside legal advice it is well worth avoiding a legal battle in future.

Your Checklist for Employee Termination

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Standardizing the termination process benefits both the employee and your business. The employee termination checklist is commonly utilized as a best practice tool for the termination process.

An employee termination checklist generally includes-


1. Basic information- Begin your termination checklist listing the following information-

  • Employee name
  • Role performed
  • Termination date
  • Department name
  • Employee or company number
  • Reason termination is occurring
  • Human resources contact information
  • Date termination paperwork completed
2. Notification- Human resources should have previously been notified about employee termination in writing. If an employee verbally indicates their intention to leave your company they must write an official resignation letter for your company's records.

A great HR department will have a process for informing the concerned parties both inside and outside of your company about the upcoming employee termination. Concerned parties range from your front desk receptionist to your health insurance provider.

3. Documentation- Make sure the employee file contains all documentation related to the termination. These documents may include copies of their-
  • Termination letter
  • Resignation letter
  • Receipts for returned company property
  • Contact information
  • Performance reviews
  • Non compete agreement
  • Confidentiality agreement
If an employee is being involuntarily terminated it is important to include a copy of any written warnings or disciplinary actions they may have received throughout their employment.

4. Exit interview- Exit interviews give employees the opportunity to speak openly about their experience working at your business. Employee feedback provided during the exit interview should be summarized by human resources and sent to management for review.

The exit interview is also an informative meeting where your human resources department explains what employees should expect in the future. During the exit interview make sure to provide employees with information regarding any of the following that applies to them-
  • Benefits status
  • Final paycheck
  • Company property
  • Health insurance
  • Retirement plan
  • Severance pay
  • Life insurance
  • Unused vacation and sick time
5. Update information- You'll need to know the address and contact information for the employee you are terminating for future correspondences. Crucial documents like benefit status letters and W-2s will need to be delivered to them, so make sure their contact information is current and ask them to notify you of any changes.

6. Work with IT- Depending on what your former employee had access to, your IT department must make sure a former employee cannot access company information or property after their termination. Among many other matters, computer access and keycards need to be cleared and their respective passwords changed.

7. Company property- An employee leaving your company must return company property before their departure. This can include but is not limited to-
  • Employee access keycards
  • Company electronics
  • Company files
  • Company credit cards
  • Company uniforms
  • Company vehicle
8. Benefits- Your human resources department should have a process for providing terminated employees with information regarding their benefits. Benefits range from unused vacation time to health insurance extensions.

Make sure to check state law for any specific protocol, for example in California Medi-Cal members require a health insurance premium program notice. Remember, it is always better to get legal advice for anything you are unsure about rather than end up in a legal battle in the future.

9. Review- Any documentation that an employee signed regarding trade secrets or non compete agreements should be reviewed. If the employee did not sign any type of confidentiality agreement previously, make sure to go over relevant sections of the company handbook with them before they leave.