At A Glance Termination Of Employment In Usa

Bonisiwe Shabane

-Oct 30, 2025, 4:32 AM

at a glance termination of employment in usa

Written by Claire M Lesikar, Eric S Bord and Michael D Schlemmer from Morgan Lewis & Bockius LLP on Oct 20, 2025 Legislation and agenciesPrimary and secondary legislation What are the main statutes and regulations relating to employment? In the United States, the employment relationship is governed by federal and state laws and, sometimes, by the laws of local governments within states (eg, counties, boroughs, cities and towns). The primary federal laws that regulate various aspects of employment include: May an employer dismiss an employee for any reason or must there be ‘cause’?

How is cause defined under the applicable statute or regulation? Unless the employer contractually agrees otherwise (either in an individual employment agreement or a collectively bargained agreement), most employment in the United States is at will, meaning that it is not for any specific... However, employers cannot terminate at-will employees for a reason that is unlawful under federal, state or local law. Montana does not recognise at-will employment after a 12-month, or otherwise agreed, probationary period. In that state, after the probationary period has elapsed, an employer may only terminate an employee for good cause, which is defined as ‘reasonable job-related grounds for dismissal based on a failure to satisfactorily... Puerto Rico also does not recognise at-will employment.

Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice? Advance notice of dismissal or pay in lieu of such notice is not required by any federal, state or local law unless the termination of employment is owed to a mass termination or plant... However, an employer may contractually agree to provide employees with advance notice of dismissal or pay in lieu of such notice. Federal and state agencies have laws about how and when employees can be fired. Follow these policies and your company guidelines to avoid wrongful termination claims.

All states, except Montana, allow "at-will" employment. This means that an employer or employee can end the employment at any time, for any reason. However, the reason for termination cannot be illegal. This includes: At-will employment may not apply to everyone. It does not include employees who work:

These government resources can help you make sure you are following termination rules: Ask a real person any government-related question for free. They will get you the answer or let you know where to find it. Generally, employees employed on an “at-will” basis may be terminated, with or without cause or grounds, provided it is not for an illegal reason, notably discrimination on grounds of a category protected by law... The employment contracts of executives and other highly-skilled individual often incorporate a “just cause termination” clause, mandating that the employee may only be terminated for “cause” and lists the permissible grounds. In such cases, the grounds for a “just cause” termination are negotiated by the parties on a case-by-case basis.

There are no restrictions on an employer’s ability to collectively dismiss its employees. However, the WARN Act requires covered employers to provide 60 days’ notice in advance of covered plant closings and mass layoffs to: 1) the affected workers or their representatives (e.g., a labour union); 2)... In general, employers are covered by the WARN Act if they have 100 or more employees, excluding employees who have worked fewer than six months in the last 12 months and not counting employees... A covered plant closing is defined under the WARN Act as the shutdown of an employment site (or one or more facilities or operating units within an employment site) that will result in an... This does not count employees who have worked fewer than six months in the last 12 months or employees who work an average of fewer than 20 hours a week for that employer. These latter groups, however, are entitled to notice.

A covered mass layoff is defined as a layoff that does not result from a plant closing, but which will result in an employment loss at the employment site during any 30-day period for... As defined in the WARN Act, “employment loss“ means: (1) an employment termination, other than a discharge for cause, voluntary departure, or retirement; (2) a layoff exceeding six months; or (3) a reduction in... Offload compliance risks and HR admin in the U.S. Affordable mandatory and add-on localized benefits. Streamline global payroll data and reports in one dashboard. Consolidate multi-country payroll operations and financial admin.

Integrate our products and services into your portfolio. Letting an employee go is never easy. It’s one of the most difficult decisions an employer has to make, and if not handled properly, it can also create serious legal headaches. Even though most U.S. employees work under at-will agreements—where employment can be ended at any time for a legal reason—there are still many laws that limit when and how terminations can happen. In this guide, we’ll walk through the key rules employers need to know for 2025: including federal protections, state-specific rules, wrongful termination risks, final paycheck deadlines, severance pay, and more.

Whether you’re handling a single termination or a large layoff, understanding the law upfront can help you avoid costly mistakes. Termination simply means the end of an employee’s time with the company. While most people think of it as getting fired, it actually covers any situation where the working relationship ends—whether it’s the employee’s choice or the employer’s decision. In most cases, terminations fall into one of two categories: No matter how or why it happens, every termination needs to follow federal, state, and local laws to help avoid legal problems down the road. If you've lost your job, you have certain rights, such as the right to continue your health care coverage and, in some cases, the right to unemployment compensation.

Each state has specific laws for employee termination or separation, including notice periods, final pay, severance agreements, and more. Click on a state in the map below for a detailed article and checklist. Create personalized Separation Acknowledgements and Separation and Release Agreements to suit your specific needs in just a few simple steps with a SixFifty subscription. Access the nation's employment laws and policies at your fingertips. Build compliant, multi-state employee handbooks in minutes. Employment termination in the United States operates primarily under the doctrine of "at-will" employment.

This principle generally allows either the employer or the employee to end the employment relationship at any time, for any reason or no reason at all, provided the reason is not illegal. While this provides significant flexibility, employers must navigate a complex landscape of federal, state, and local laws, as well as potential contractual obligations and company policies, to ensure terminations are handled lawfully and ethically. Understanding the nuances of termination procedures, including notice requirements, severance considerations, valid grounds for dismissal, and employee protections, is crucial for businesses operating in the US. Proper handling minimizes legal risks, maintains positive employee relations, and ensures compliance with various regulations. In the United States, there is generally no federal law requiring employers to provide a specific notice period before terminating an employee, nor are employees typically required to give notice before quitting. This aligns with the at-will employment principle.

However, there are key exceptions to this general rule: Beyond these exceptions, providing notice, even when not legally required, is often considered a best practice, especially for employees who are not being terminated for serious misconduct. Severance pay is compensation provided to an employee upon termination of employment, typically beyond their final wages earned. Unlike final paychecks for work performed, severance is generally not legally required in the United States. Entitlement to severance usually arises from:

At A Glance Termination Of Employment In Usa

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