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What is Termination of Employment?

Termination of employment refers to ending an employee's contract with a company. An employee could be fired for any reason, including their decision to leave the company. Employers may choose to terminate employment for various reasons, such as downsizing, poor job performances, or redundancies.

Types of Termination

Voluntary Termination

Most employees give written or oral notice of resignation when they are ready to quit. Sometimes, the employee provides a two-week notice. However, this is not a requirement for ending an at-will employment relationship unless company policy specifies otherwise.

Job Abandonment

Suppose an employee quits their job after failing to show up for work or notifying the employer. It could be considered job abandonment. Employers should have a policy that defines how many days in a row a no-call/no-show would be accepted before job termination. They should also notify employees that job abandonment is a voluntary resignation.

Involuntary Termination

For Cause

Employees may be terminated “for cause” if their conduct is considered a policy violation. It’s important to implement a progressive discipline procedure that will alert employees of the unacceptable behavior and correct it. Then, employers can feel comfortable terminating an employee when there is a consistent procedure. The employee knows that their employment is at risk.

Unsatisfactory Performance

Substandard job performances can often be best addressed with progressive discipline before termination when clear performance standards are communicated. Others, such as major accounting errors that led to costly penalties, may warrant immediate dismissal. Employers who aren't suited for the job may be fired as soon as they start working. Unemployment benefits may be available to the former employee. State unemployment agencies are not likely to view an employee's inability to perform to standards as a fault.

Without Cause

Employers might have to terminate employment because of medical reasons. However, employees have many rights under the federal and state medical leave laws. Employers should consult with an attorney before deciding to terminate without cause.

Layoff or reduction in force

An employer may need to reduce its workforce for economic or restructuring reasons. Employers may choose employees for layoffs or RIFs based on their seniority or any other non-discriminatory criteria. These employees may be offered a severance package, and they will often be eligible for unemployment insurance benefits.

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State Termination Requirements

Often, an employee's final day of work is the termination or separation deadline. However, the employee's last workday is the termination or separation date. For example, an employee may be on leave while being investigated for misconduct but will not be terminated until after the investigation is complete on Thursday. The date the termination decision has been made will be significant for purposes such as final pay. However, the last working day may be relevant for unemployment and benefits decisions.

State law governs how and when an employee receives their final pay. Federal law allows the last paychecks to be issued on the next scheduled payday. However, specific states require payment within a time limit or immediately after termination. Different state laws also vary in whether unutilized vacation or sick leave hours must be refunded to the employee upon termination.

Employers should ensure that employees feel respected and treated with dignity when announcing their intention to end employment. Employers may also use these meetings to conduct exit interviews of employees who leave. This information helps employers understand why talented employees leave.

Are Employers Required to Provide Severance Pay?

Some employers may send employees notice of termination or termination pay. It is sometimes called severance. This is common in employees who have been working for the company for longer than three months. A company offering severance will do so if it has made an informal agreement or its employment handbook specifies. However, it is not required by the Fair Labor Standards Act (FLSA) that severance plans be offered.

Federal law does NOT require that employers immediately give a terminated employee a final salary. However, some state laws may dictate that employers immediately provide the affected employee the last paycheck.

Unemployment benefits can be granted to anyone unable to work due not to their fault. Each state has an unemployment program (UI) that offers financial assistance to temporary job seekers who are not employed. The U.S. Department of Labor has detailed information regarding unemployment insurance benefits.

What Does At-Will Employment Refer to?

Employers can dismiss employees without reason if they choose to use at-will employment. Employees may also be allowed to leave without explanation. As a result, at-will employment has become more popular.

Every state, except Montana, has some form or another of employment at law. It means that the employer and employee can both terminate an employment relationship for any legal reason. Some exceptions apply to employment at will. For example, a collective bargaining or employment contract could be used to override employment-at-will status. Local laws may prohibit employment, such as New York City's prohibition on fast food workers and Philadelphia's ban on parking employees. The United States is unusual because it allows employees to terminate their employment without cause. An employer can change the terms of employment without notifying or causing any consequences.

If they so choose, employees can switch jobs without notifying their employer. Of course, you can change your job without notice, but it is better to give two weeks' notice to avoid legal consequences.

Does Termination Mean Fired?

If you get fired, you are automatically terminated from the employment contract. Your employer should let your know the reason they fired you. For example, your employer may fire you for misconduct, poor performance, or because your skills aren't suitable for the job.

What Is Wrongful Termination?

Wrongful termination refers to the firing of an employee for reasons not permitted by employment law.

Employers who fire people for not complying with certain requests, like doing dangerous or illegal jobs, are also guilty of wrongful termination. Employers who change work conditions without prior notice and ultimately force an employee to leave or be fired are also accused of violating employment law. Individuals may file legal action against former employers if they are wrongfully terminated.

How Do You Fight the Termination of Employment?

You might not be able to fight the termination of employment if you were terminated for a legitimate reason, such as restructuring or theft. However, if you feel you are fired for no reason, you have options.

Make sure that you fully understand why you are being fired. Appeal the decision to your employer, or the company's Human Resources department, if you are able. You can request copies of documents such as your employment contract, communications between you or your employer concerning your performance, and your employment file. Contact your union representative if there is one. If you have a claim, you can also contact an employment lawyer.


Employees can choose to end their employment relationship with employers for many reasons. For example, some employees may leave their jobs out of choice. In contrast, others may lose their jobs due to misconduct, poor performances, or another reason.

If your contract is terminated, there are certain rights you have. You can, for example, rescind your resignation at any time if it is voluntary. If your job is lost for any reason, you may file a claim on unemployment insurance. You might have legal recourse if your employer retaliated against you and let go of you illegally. These are all possible scenarios.

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