Do Employers Need To Provide Termination Letters?

As an employer, terminating an employee is usually an uncomfortable situation. New Hampshire is an at-will state, and absent a contract with the employee, an employer has the right to terminate an employee for any reason other than an unlawful one.  Despite the ability of an employer to terminate an employee for any lawful reason, it is still a difficult decision and process for both the employer and employee.  A termination letter can help clarify the termination process for both parties.

Generally, terminations should be conducted respectfully and in a private setting.  In addition, the employer should consider and plan for any disturbances or violent outbursts that may arise if there is the potential for such conduct.  Often times, having the appropriate people at the termination meeting can deescalate any potential for a volatile situation.

Termination letters are appropriate and kind.  Providing a terminated employee with a written termination letter helps to allow the employee to understand the reason for termination.  The reason for the termination should be stated very briefly in the letter, such as tardiness or poor performance.  The employer should make sure that the documents in the personnel file support the stated basis for termination.  Termination letters also help an employer focus on what issues need to be addressed in terminating an employee.

The termination letter should also address the final paycheck. With regard to final wages, an employer should be careful to comply with RSA 275:44.  Whenever an employer discharges an employee, the employer shall pay the employee’s wages in full within 72 hours.  If the employee quits or resigns, the employer shall pay the employee’s wages no later than the next regular payday.  If the employee gives at least one pay period’s notice of intention to quit, the employer shall pay all wages earned by the employee within 72 hours.  If the employee is suspended as a result of a labor dispute or is laid off, then the employee is due wages in full in the next regular payday.  The wages owed within 72 hours can either be physically given to the employee or mailed to the employee, at the discretion of the employee.

Termination letters should also address COBRA continuation of benefits and applying for unemployment compensation.  Return of company property and mention of any future contractual agreements, such as a non-compete or confidentiality agreement, can also be referenced in a termination letter.

Termination letters can address severance pay if it is offered.  The law in New Hampshire provides that absent a policy providing for severance, there is no requirement that a terminated employee be provided with severance pay.  If an employer offers severance upon termination, there should be a written letter acknowledging the severance and its duration and time of payment.  An employer offering severance should consider obtaining a release of claims in consideration for the payment of severance.

Also, as stated in an upcoming blog, if an employer is doing a large layoff, over 25 employees as defined in the law, over a 90 day period, the employer needs to determine whether the federal and/or state Worker Adjustment and Retraining Notification Act (“WARN”) laws apply and provide the appropriate written notice to terminated employees and the required state agencies.

About the Author: Jennifer Eber

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