EMPLOYEE TERMINATION LETTER

State of Illinois

TABLE OF CONTENTS

1. Employer and Employee Information
2. Purpose and Effective Date of Termination
3. Reason for Termination
4. Final Wages and Compensation
5. Accrued Benefits and Paid Time Off
6. Health Insurance Continuation (COBRA / IL Mini-COBRA)
7. Unemployment Insurance Information
8. WARN Act / Illinois WARN Act Compliance
9. Return of Company Property
10. Post-Employment Obligations
11. Anti-Retaliation and Non-Discrimination Statement
12. References and Employment Verification
13. Severance (If Applicable)
14. General Provisions
15. Acknowledgment and Signatures
16. Enclosures and Attachments Checklist
17. Sources and References

1. EMPLOYER AND EMPLOYEE INFORMATION

Employer (Company):

Employee:

Prepared By:

Delivery Method:

☐ Hand delivery with signed acknowledgment
☐ Certified mail, return receipt requested
☐ Email with read receipt and follow-up hard copy
☐ Other: [________________________________]

2. PURPOSE AND EFFECTIVE DATE OF TERMINATION

This letter serves as formal notification that the employment of [Employee Full Legal Name] ("Employee") with [Company Legal Name] ("Company") is terminated effective [__/__/____] at 5:00 p.m. Central Time ("Separation Date").

Employee's last day physically in the workplace shall be: [__/__/____]

☐ Employee is being placed on paid administrative leave from [__/__/____] through the Separation Date.
☐ Employee's last working day and Separation Date are the same.

3. REASON FOR TERMINATION

Illinois recognizes the at-will employment doctrine. The employment relationship may be terminated by either party at any time, with or without cause or notice, provided the termination does not violate applicable law.

The reason for this termination is as follows (select all that apply):

☐ Voluntary Resignation – Employee submitted resignation effective [__/__/____].
☐ Involuntary Termination – Performance – Employee has failed to meet documented performance standards after written warnings dated: [________________________________]
☐ Involuntary Termination – Misconduct – Employee violated Company policy: [________________________________]
☐ Position Elimination / Reduction in Force – The position of [________________________________] is being eliminated due to: [________________________________]
☐ End of Contract / Temporary Assignment
☐ Mutual Agreement
☐ Other – [________________________________]

4. FINAL WAGES AND COMPENSATION

Illinois Final Paycheck Requirements

Under 820 ILCS 115/5 (the Illinois Wage Payment and Collection Act), when an employee is separated from employment, the Company must pay all final compensation, including earned but unpaid wages, on the next regularly scheduled payday. If the next payday is fewer than 13 days after the separation, the employer may pay on the second regularly scheduled payday, but no later than 13 days after the last day of work.

Penalty for violation: An employee may recover the amount of underpayments, plus 2% of the underpayment per month as damages, plus costs and reasonable attorney fees under 820 ILCS 115/14.

Method of Payment:

☐ Direct deposit to account on file
☐ Paper check mailed to address above
☐ Paper check available for pickup

Expense Reimbursement

Under the Illinois Wage Payment and Collection Act, necessary business expenditures are reimbursable. Employee must submit all outstanding, properly documented expenses within [____] business days of the Separation Date.

5. ACCRUED BENEFITS AND PAID TIME OFF

Vacation / PTO Payout

Under 820 ILCS 115/5, whenever a contract of employment or employment policy provides for paid vacations, and an employee is terminated without having taken all earned vacation time, the monetary equivalent of all earned vacation must be paid as part of final compensation at the employee's final rate of pay.

Important: Illinois law does not require payout of unused sick leave or holiday pay upon separation unless the employer's written policy or employment agreement provides otherwise.

Illinois Paid Leave for All Workers Act

Under the Paid Leave for All Workers Act (820 ILCS 192), effective January 1, 2024, employers are generally not required to pay out unused paid leave upon termination unless required by company policy.

6. HEALTH INSURANCE CONTINUATION (COBRA / IL MINI-COBRA)

Federal COBRA (Employers with 20+ Employees)

Employee and eligible dependents may elect continuation coverage under 29 U.S.C. §§ 1161–1169 for up to 18 months (extendable in certain circumstances).

Illinois Mini-COBRA (215 ILCS 5/367e)

For employers with fewer than 20 employees, Illinois continuation coverage under 215 ILCS 5/367e provides up to 12 months of continuation coverage.

☐ Federal COBRA applies (20+ employees)
☐ Illinois Mini-COBRA applies (fewer than 20 employees)
☐ Company does not offer group health coverage

A separate COBRA or continuation coverage election notice will be mailed within 14 days (for IL mini-COBRA) or 44 days (for federal COBRA) of the qualifying event.

7. UNEMPLOYMENT INSURANCE INFORMATION

Employee may be eligible for unemployment insurance benefits administered by the Illinois Department of Employment Security ("IDES").

Illinois employers are required to provide the IDES pamphlet "What Every Worker Should Know About Unemployment Insurance" at the time of separation.

How to File a Claim:
- Online: https://ides.illinois.gov
- Phone: (800) 244-5631
- Teletypewriter (TTY): (866) 488-4016

☐ IDES informational pamphlet is enclosed.
☐ The Company will not contest Employee's unemployment claim.
☐ The Company reserves the right to provide accurate separation information to IDES.

8. WARN ACT / ILLINOIS WARN ACT COMPLIANCE

Federal WARN Act (29 U.S.C. § 2101 et seq.)

Applies to employers with 100+ employees conducting a mass layoff or plant closing affecting 50+ workers.

Illinois WARN Act (820 ILCS 65/)

The Illinois WARN Act applies to employers with 75 or more full-time employees and requires 60 days' advance notice before a mass layoff (affecting 25+ employees at a single site), relocation, or employment loss.

☐ This termination is an individual action; WARN notice is not required.
☐ Federal WARN notice was provided on [__/__/____].
☐ Illinois WARN notice was provided on [__/__/____].

9. RETURN OF COMPANY PROPERTY

Employee must return all Company property on or before the Separation Date.

Employee must permanently delete Company data from personal devices and certify deletion upon request.

Note: Under Illinois law, the Company may not deduct the value of unreturned property from final wages without the Employee's express written consent per 820 ILCS 115/9.

10. POST-EMPLOYMENT OBLIGATIONS

Employee remains bound by all survivable obligations, including:

☐ Confidentiality / Non-Disclosure Agreement dated [__/__/____]
☐ Non-Competition Agreement dated [__/__/____]
☐ Non-Solicitation Agreement dated [__/__/____]
☐ Intellectual Property Assignment Agreement dated [__/__/____]
☐ Other: [________________________________]

Illinois Freedom to Work Act (820 ILCS 90/): Effective January 1, 2022, non-compete covenants are unenforceable against employees earning less than $75,000 annually (increasing to $80,000 on January 1, 2027), and non-solicitation covenants are unenforceable against employees earning less than $45,000 annually (increasing to $47,500 on January 1, 2027). Employers must advise employees to consult an attorney and provide at least 14 calendar days to review before execution.

11. ANTI-RETALIATION AND NON-DISCRIMINATION STATEMENT

The Company represents that this termination was made without regard to any characteristic protected by the Illinois Human Rights Act (775 ILCS 5/) or federal law.

Nothing in this letter restricts Employee's right to:

• File a charge with the EEOC or the Illinois Department of Human Rights;
• Participate in any governmental investigation;
• Engage in protected concerted activity under the National Labor Relations Act;
• Report violations of law under whistleblower statutes, including the Illinois Whistleblower Act (740 ILCS 174/).

12. REFERENCES AND EMPLOYMENT VERIFICATION

The Company's standard policy is to confirm only:

• Dates of employment
• Last position held
• Final salary (with Employee's written authorization)

Under the Illinois Employee Credit Privacy Act (820 ILCS 70/) and the Job Opportunities for Qualified Applicants Act (820 ILCS 75/), the Company is mindful of its obligations regarding reference disclosures.

All verification requests should be directed to: [________________________________]

13. SEVERANCE (IF APPLICABLE)

☐ No severance is being offered.

☐ Severance is being offered under a separate Severance and Release Agreement (enclosed). Benefits are contingent upon execution of the Release.

14. GENERAL PROVISIONS

14.1 At-Will Confirmation. This letter confirms the at-will nature of the prior employment relationship.

14.2 Governing Law. This letter is governed by the laws of the State of Illinois. Exclusive venue for any dispute lies in the state courts of [________________________________] County, Illinois.

14.3 No Admission. This letter does not constitute an admission of liability.

14.4 No Waiver. This letter does not waive or release any claims by either party. Any release must be in a separate written agreement.

14.5 Severability. If any provision is held invalid, the remaining provisions remain in effect.

14.6 Entire Notice. This letter constitutes the entire termination notice, except for surviving written agreements.

15. ACKNOWLEDGMENT AND SIGNATURES

Company Representative

Signature: ________________________________________

Printed Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

Employee Acknowledgment

By signing below, I acknowledge receipt of this Termination Letter and all referenced enclosures. My signature confirms receipt only and does not constitute agreement or a waiver of legal rights.

Signature: ________________________________________

Printed Name: [________________________________]

Date: [__/__/____]

☐ Employee declined to sign. Witnessed by:

Witness Name: [________________________________]

Witness Signature: ________________________________________

Date: [__/__/____]

16. ENCLOSURES AND ATTACHMENTS CHECKLIST

☐ Final pay statement
☐ COBRA Election Notice and enrollment forms
☐ IDES pamphlet ("What Every Worker Should Know About Unemployment Insurance")
☐ Benefits summary and 401(k) rollover information
☐ Copies of surviving restrictive covenant agreements
☐ Severance Agreement and General Release (if applicable)
☐ Company property return checklist (signed)
☐ Illinois WARN notice (if applicable)
☐ OWBPA disclosure (if applicable)
☐ Other: [________________________________]

17. SOURCES AND REFERENCES

• 820 ILCS 115/5 – Final compensation timing: https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2402
• 820 ILCS 115/14 – Penalties for wage violations
• 820 ILCS 115/9 – Prohibited wage deductions
• 215 ILCS 5/367e – Illinois mini-COBRA continuation
• 820 ILCS 65/ – Illinois WARN Act
• 775 ILCS 5/ – Illinois Human Rights Act
• 820 ILCS 90/ – Illinois Freedom to Work Act (non-compete restrictions)
• 740 ILCS 174/ – Illinois Whistleblower Act
• 820 ILCS 192/ – Paid Leave for All Workers Act
• 29 U.S.C. §§ 1161–1169 – Federal COBRA
• Illinois Department of Employment Security: https://ides.illinois.gov

This template is provided by ezel.ai for informational purposes only. It does not constitute legal advice. Laws change frequently; verify all statutory citations before use. Have this document reviewed by a licensed Illinois attorney before issuance.