Employee termination checklist: what your company needs to do

How to use the terminations checklist

Employee terminations require a sensitive process. From ensuring compliance with all relevant laws, to managing the emotional elements, they present a multi-layered — and sometimes confusing — challenge.

An employee termination checklist gives you and your team a strong starting point. This checklist will help you systematically handle terminations with clarity and empathy, while also keeping your company protected.

Note that our checklist covers the offboarding process in isolation. Outside of the following steps, you must make sure you have already satisfied all legal requirements in deciding to terminate the employee (including performance improvement plans, remedial training, or any other mandated process in the employee’s location).

Inform the employee

Once the decision has been made, the first step is to tell the employee in real time in a formal environment. This should be in a face-to-face meeting (either in person or on a video call if the employee is remote).

Do this before ‌sending any formal documentation so they aren’t blindsided and can prepare for what’s next.

Provide formal notice

Once the employee has been informed, provide a written notice of termination. This acts as an official notice. Clarify the situation and avoid any gray areas. Include all essential details such as:

The last day of work

The amount of notice and severance pay (if applicable)

Any accrued but unused paid time off figures

Whether the employee is required to return equipment or other peripherals

Calculate the final payslip

Double check the employee’s final payslip is correctly calculated (taking into account the amount of notice they will work).

What you owe can vary by country or US state. For example, in some US states, employees are legally entitled to any accrued but unused vacation days, while, in others, this depends on company policy. Some countries mandate severance pay under certain conditions, others don’t. Remote can help clarify your liabilities and legal responsibilities when calculating final payslips.

Provide benefits information

Explain (either in real-time or through email) how the termination will affect the employee’s benefits. For example, if they are enrolled on an equity incentive plan, explain what will happen to their shares (or provide a resource that can).

For some benefits (such as pensions or life insurance), the benefit provider will be responsible for providing information. If your team member is employed through an employer of record (EOR) provider like Remote, the EOR will handle this.

Conduct an exit interview

Take the chance to gain feedback about your company to consider how you could improve workplace processes for existing and future employees. This gives your employee the chance to ask their own questions, so you must come prepared and stay composed.

If required, refer to the individual’s previous performance reviews to explain the business decision. If the termination is not the result of illegal or harmful behavior (i.e., theft, harassment, negligence, or discrimination), you can also offer to write them a reference letter.

Enable the return of company property

Most employment agreements mandate that physical company property (laptops, phones, other hardware) must be returned. If applicable, make arrangements for this to occur after the notice period is complete.

If your employee works remotely and you want the equipment to be returned, provide clear instructions on how to package and ship it. Ask the employee to get a shipping invoice so that you can reimburse the amount.

Note that, unless otherwise stipulated, employees don’t have to return equipment that was purchased through a benefit, such as a home office stipend. This includes things like office chairs, desks, and stationery.

Revoke all accesses

Once the employee’s last working day has been completed, make sure your IT team revokes access to systems, emails, and (if applicable) physical premises. Any former employee who still has valid credentials could‌ access your network, which poses a serious security risk.

This is particularly true if the termination is not amicable. A disgruntled individual with access to company files can potentially cause major damage by deleting, stealing, or sharing sensitive or confidential data.

Let others know

To avoid confusion and ensure transparency, you should inform the rest of your team about the employee leaving the company. Be professional and don’t disclose details about why the employee has left. It’s advisable to announce terminations after the employee has worked their last day and their access has been revoked.

Provide a point of contact and guidance on what to do for those who were working directly with the employee. If the employee was working directly with clients and other stakeholders, you will also need to let them know.

Maintain documentation

Keep a line open for any future communication needed (like tax forms), and ensure that all HR documents related to the employee’s tenure and termination are updated and filed correctly.

Remote HR Management makes this step so much easier. You can update the employee’s status in the system, document their termination details, and securely store any relevant communication or paperwork related to their exit. It is also fully integrated with our other HR functions such as time and attendance, expenses, payroll and (for EOR users) benefits management, making the entire termination process quick and seamless from an administrative perspective.

A centralized, secure place for these documents keeps everything easily accessible (and Remote maintains compliance with all relevant data protection laws).

Best practices for employee terminations

While the checklist above provides a systematic approach to employee termination and covers the key points, there will always be nuances to consider on a case-by-case basis.

Therefore, whatever the situation, it’s advisable to remember some best practices that apply to all scenarios. As a rule, you should:

Always assess termination risks

Ensure that, at every step of the process, you are adhering to all relevant employment laws and practices, as well as your own company policies. Otherwise, you may expose yourself to legal action, especially if the termination is high-risk.

If you have team members in different countries, you need to fully understand the relevant termination laws in that country. The process may also be significantly different for each of your people.

That’s why it’s a good idea to work with a global HR partner, like Remote. If you decide to terminate, we assess the potential risks based on the information you provide, ensuring full compliance with local labor laws. This significantly reduces the legal risk for your company, and ensures a more positive experience for the departing team member.

Put everything in writing

As mentioned, documentation is crucial; it acts as a single source of truth, prevents misunderstandings, and can even be used as evidence should any legal complications arise. By recording every step of the process, from the termination letter to follow-up communications, you’re safeguarding your company.

Documentation is also a proactive way to maintain transparency and integrity throughout the termination process.

Standardize the process

This can be tricky as the circumstances around each termination may vary massively. It’s also difficult if you have team members in different countries, with different regulations.

However, by aiming to implement a standardized procedure, you promote equality and avoid bias. While you may need to fulfill different legal obligations, your checklist should aim to ensure equitable treatment of all employees.

How can Remote help?

Remote takes the complicated administrative work out of managing terminations. Our Employer of Record product gives you the assurance of compliant terminations managed on your behalf.

Our Payroll tool enables you to calculate your employee’s final payslip accurately, while our free HR Management tool streamlines all the administrative requirements. If you hire and manage your people through our EOR platform, we also handle benefits management, and help ensure that the termination is legal and compliant with local laws at every step.

Learn more about how Remote’s comprehensive HR platform can take the stress off your team and speak to one of our friendly experts today.