In most states, dismissal letters are not necessary to terminate an employee legally. With the exception of Montana, employers in the United States can terminate an employment relationship at any time and for any reason, unless company policies or contracts state other conditions, according to the Small Business Administration.
Under most company procedures, an employee is terminated in a private meeting between the employee, the supervisor and a human resource representative, states About.com. Typically, the terminated employee is informed of any continued benefits, severance packages or other separation arrangements, and the employee relinquishes all company-owned property. The employer may or may not state the reason for the termination. A proper dismissal letter should summarize this information.
Some states have service letter laws that require employers to provide a letter to former employees as proof of their service with the company, states the Houston Chronicle. In some cases, individuals must request the letter from their previous employer within a certain amount of time after termination, states Nolo. Stipulations regarding the request and the contents of the letter vary from state to state.
Although most employment relationships are at-will for both parties, employers still should document all employee reviews, concerns and disciplinary actions, recommends the Small Business Administration. Human resource managers should stay up-to-date on their state's employee termination laws and must include the necessary information if a service letter is requested. Business owners also should be aware of applicable federal and state laws regarding final paychecks and health insurance coverage.