What should a California termination include, and when is severance worth signing?

This piece is written for both sides of the table. Employers need a termination process that holds up. Employees need to know what they are owed and what they are being asked to give up. The same facts answer both.

Can a California employer fire someone for any reason?

Employment is presumed to be at will (Labor Code 2922), so no reason is required. But the real reason cannot be discrimination, retaliation for a complaint or for taking protected leave, or a violation of public policy. When a claim is filed, the question becomes what the reason was, and the answer is whatever the documents show. Keep AI notetakers out of terminations.

Those exceptions are what a wrongful termination claim is built on. So the practical answer to how to fire an employee in California is to document the real reason first and keep the meeting short, as below. For the employee side, see your first 48 hours after a layoff.

What documentation should come first?

Before you terminate an employee in California, make sure the file shows:

• Written expectations: a job description and the standard the employee missed.
• Feedback in writing, dated, describing behavior and results rather than personality.
• A performance improvement plan with specific goals and a real timeline. The performance review and PIP templates are built for this. If you are the employee, see how to respond to a PIP.
• The same standard applied to everyone in the role. Inconsistency is what turns an ordinary termination into a discrimination claim.

What is required on termination day?

• The final paycheck with all wages and accrued vacation, paid at the time of termination. The rules are in California final paycheck deadlines.
• Written notice of the change in employment status (Unemployment Insurance Code 1089).
• The Employment Development Department’s unemployment insurance pamphlet, “For Your Benefit” (DE 2320).
• Health coverage continuation notices under COBRA or Cal-COBRA, where they apply.

Keep the conversation short and factual. State the decision and the effective date, hand over the check and the documents, and collect company property.

A clean termination process in California runs in order: documentation, a decision checked against leave and complaint history, the meeting, then final pay and notices the same day.

If a complaint is part of the picture, a workplace investigation comes before the decision, not after it.

Is severance required in California?

No. Severance is a business decision. Employers usually offer it in exchange for a release of claims, which is why a severance agreement is really a settlement agreement. A valid California release typically waives unknown claims under Civil Code 1542. Some claims cannot be released, including undisputed wages already owed.

Separation agreements carry required protections. If the agreement includes non-disparagement or confidentiality terms, it cannot stop the employee from disclosing information about unlawful acts in the workplace, must say so in the agreement, and must tell the employee of the right to consult an attorney and give at least five business days to consider it (Government Code 12964.5). For employees 40 and over, federal law requires 21 days to consider (45 in a group layoff) and seven days to revoke after signing.

What should an employee check before signing?

• Your final pay is owed whether or not you sign. If it is being held until you sign, that is a separate problem.
• Take the review time the law gives you. Do not sign in the meeting.
• Read what you are releasing and what the agreement says about references, rehire and how the separation is described.
• Look for terms that restrict where you work next. Most are void in California; see the noncompete ban.
• Severance is negotiable. Common asks: more weeks of pay, paid health premiums, a neutral reference and a later separation date for benefits.

Negotiating your exit follows the same rules as negotiating your offer: ask with a number and a reason. The same approach appears in negotiating while supporting a family and the cost of taking the first offer. Three related guides: who should take notes in a termination meeting, what an arbitration agreement changes about a dispute and what California says about probationary periods.

When the employer itself is sold, the termination rules change, and my guide to HR deadlines in a business sale explains how.

For a layoff attributed to AI, see the rehire math and California rules before cutting jobs for AI.

For the sequence on the day itself, see a California offboarding checklist, and for complaints that come before a termination, see how to run a workplace investigation in seven steps.

For a related angle, see the seven talent decisions every small employer makes.

Documentation is easier when each kind of record already has its own file, as I describe in the six employee files and what belongs in each.

McKinley holds a J.D. but is not a licensed attorney. Articles here are general information, not legal advice. For your specific situation, talk with an employment attorney.

Data current as of September 2026. Sources are linked where each figure appears.