Termination Letter

CONFIDENTIAL
[COMPANY LETTERHEAD]

Date: [MONTH] [DAY], [YEAR]

Via [Method of Delivery: Hand, Certified Mail, Email]
[EMPLOYEE NAME]
[EMPLOYEE ADDRESS]
[City, State ZIP]

Re: Notice of Employment Termination and Final Pay Statement

TABLE OF CONTENTS

1. Document Header
2. Definitions

3. Operative Provisions
   3.1 Termination of Employment
   3.2 Final Compensation
   3.3 Health-Insurance Continuation (COBRA / Cal-COBRA)
   3.4 Unemployment Insurance Information
   3.5 Return of Company Property
   3.6 Confidentiality & Other Continuing Obligations

4. Governing Law & Forum Selection

5. Employee Acknowledgment & Execution

1. DOCUMENT HEADER

This Notice of Employment Termination and Final Pay Statement (the “Notice”) is issued by [COMPANY LEGAL NAME], a [State of Incorporation] corporation (“Company”), to [EMPLOYEE NAME] (“Employee”) pursuant to the California Labor Code, California Unemployment Insurance Code, and applicable federal law. The Notice is effective as of [EFFECTIVE TERMINATION DATE] (the “Termination Date”).

2. DEFINITIONS

“Accrued Vacation” – All earned but unused vacation or PTO through the Termination Date calculated under Company policy and paid pursuant to Cal. Lab. Code § 227.3.

“COBRA Administrator” – The third-party administrator or internal department that will issue Employee’s COBRA/Cal-COBRA election materials.

“Final Pay” – All wages earned and unpaid at discharge, including vested vacation under Cal. Lab. Code § 227.3 and other compensation earned and payable under the governing plan, policy, agreement, or law. Under Cal. Lab. Code § 201(a), wages earned and unpaid at discharge are due immediately; Cal. Lab. Code § 203 provides a waiting-time penalty for a willful failure to pay as required.

“Company Property” – All physical and electronic property of Company, including but not limited to keys, ID badges, credit cards, computers, devices, documents, and confidential information.

3. OPERATIVE PROVISIONS

3.1 Termination of Employment

Effective as of the Termination Date, Employee’s at-will employment with Company is terminated. This action does not alter any post-employment obligations arising under previously executed agreements or applicable law.

3.2 Final Compensation

(a) Delivery. Enclosed with this Notice is Employee’s Final Pay OR Final Pay is being delivered at the termination meeting by [CHECK / AUTHORIZED DIRECT DEPOSIT]. Do not promise payment after discharge unless a specific statutory exception applies.
(b) Itemization. A wage statement detailing all payments, deductions, and Accrued Vacation accompanies the Final Pay in compliance with Cal. Lab. Code § 226.
(c) Taxes. All payments are subject to required withholdings.

3.3 Health-Insurance Continuation (COBRA / Cal-COBRA)

(a) Eligibility Notice. If the plan and separation are subject to federal COBRA or Cal-COBRA, the responsible employer, plan administrator, insurer, or health-care service plan will issue separate continuation materials under the applicable law. Federal COBRA generally covers private-sector plans maintained by employers with at least twenty employees, while Cal-COBRA is intended principally for insured coverage of employers with two to nineteen eligible employees.
(b) Controlling Notice. The separate election notice—not this letter—controls eligibility, election and payment deadlines, premiums, and the continuation period.

3.4 Unemployment Insurance Information

Pursuant to Cal. Unemp. Ins. Code § 1089 and current EDD instructions, Company encloses (1) a completed Notice to Employee as to Change in Relationship and (2) “For Your Benefit: California’s Programs for the Unemployed” (DE 2320). Eligibility for unemployment compensation is determined solely by the California Employment Development Department (“EDD”).

3.5 Return of Company Property

(a) Deadline. All Company Property must be returned to [RETURN LOCATION/CONTACT] no later than the Termination Date, or [NUMBER] business days thereafter with prior written approval.
(b) Withholding. Failure to timely return Company Property may result in appropriate civil remedies; however, wages will not be withheld except as permitted by law.

3.6 Confidentiality & Other Continuing Obligations

Employee remains bound only by previously executed confidentiality, invention-assignment, and similar obligations that remain lawful and enforceable. This Notice does not reaffirm or incorporate a post-employment noncompetition, nonsolicitation, or no-hire restraint that is void under California Business and Professions Code §§ 16600, 16600.1, or 16600.5. Nothing in this Notice is intended to diminish Employee’s rights under the California Labor Code or federal law, including the right to disclose information about unlawful acts in the workplace under Cal. Lab. Code § 1102.5.

4. LEGAL EFFECT

This unilateral Notice communicates the termination decision and payment/benefit information. It does not create a release, restrictive covenant, forum-selection clause, or new choice-of-law agreement. Earned wages are not conditioned on Employee's signature or return of Company property.

5. EMPLOYEE ACKNOWLEDGMENT & EXECUTION

Please sign below to acknowledge receipt of this Notice and the enclosed materials. Refusal to sign does not affect the finality of termination.

SOURCES AND REFERENCES

• California Labor Code §§ 201, 203, 226, and 227.3: https://leginfo.legislature.ca.gov/faces/codes.xhtml
• California EDD, Required Notices and Pamphlets: https://edd.ca.gov/en/payroll_taxes/required_notices_and_pamphlets/
• California EDD, Notice to Employee as to Change in Relationship: https://edd.ca.gov/siteassets/files/about_edd/pdf/noticetoemployeeastochangeinrelationship.pdf
• California EDD, DE 2320: https://edd.ca.gov/siteassets/files/pdf_pub_ctr/de2320.pdf
• California Insurance Code § 10128.50 et seq.: https://leginfo.legislature.ca.gov/faces/codes.xhtml
• California Business and Professions Code §§ 16600, 16600.1, and 16600.5: https://leginfo.legislature.ca.gov/faces/codes.xhtml
• California Labor Code § 1102.5: https://leginfo.legislature.ca.gov/faces/codes.xhtml
• U.S. Department of Labor, COBRA employer guide: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/publications/an-employers-guide-to-group-health-continuation-coverage-under-cobra
• 29 U.S.C. §§ 1161 and 1166: https://www.govinfo.gov/app/collection/uscode/2024/title29