There's no federal law that specifically requires an employer to provide you with a termination of employment letter. However, there are state laws as well as industry- and company-specific policies that help you understand the process for requesting a letter that explains the reason for your termination from your employer.
TL;DR (Too Long; Didn't Read)
While there isn't a federal law that requires employers to issue a service letter, many states have statutes concerning an employee's right to request a service letter and the employer's obligation to provide a service letter.
Employee Termination Basics
When you have reason to believe you are going to lose your job or if you are planning your next steps after being terminated, understanding basic information about termination is helpful. Some terms you should know include "right to work" and "at-will employment." Many people confuse the two. Right-to-work is a state law that means union membership is not a condition of employment.
In other words, employees have the right to work regardless of whether they want to join the labor union that represents workers at the company. At-will employment means the employer-employee relationship can be terminated at any time by either the employee or the employer, for any reason or for no reason, with or without notice. The only caveat is that an employer cannot end the employment relationship for discriminatory reasons.
Employment Contracts and At-Will Status
Employers typically hire workers with a mutual understanding the employment relationship is at-will. Human resources best practices suggest communicating at-will status during new hire orientation and throughout company materials, such as the employment application and employee handbook. Executives in C-level positions – chief operating officer, chief financial officer or chief executive officer – may enter into contractual employment agreements.
Termination letters generally apply to employment by contractual agreement. In these instances, the employment contract should contain the terms and conditions that apply to ending the employment relationship and whether the employee is entitled to a notice of termination or termination of employment letter.
State Service Letter Laws
Many terminated employees refer to a termination of employment letter as a service letter. When applicable, a service letter sets forth the reasons an employee was terminated and additional information, such as final pay and benefits due the employee. While there isn't a federal law that requires employers to issue a service letter, many states have statutes concerning an employee's right to request one and the employer's obligation to provide a service letter.
For example, Missouri Revised Statute 290.140 gives terminated employees up to a year to request a service letter via certified mail. Missouri employers must respond within 45 days or face the possibility of having to pay punitive damages for failing to comply with the state law.
Purpose of Termination of Employment Letter
If you believe your termination is based on wrongful discharge reasons, a service letter or termination of employment letter is one of the first courses of action. In this instance, a termination of employment letter should state clearly the reason for ending your employment. Some employees and their lawyers believe if an employer is reluctant to provide this type of letter upon a reasonable and lawful request for one, therein may lie support for a wrongful discharge complaint.
In certain industries, however, a service letter is a prerequisite to obtaining future employment. Delaware law requires health care employers and employers of childcare workers to obtain service letters that substantiate the employment history of prospective employees.