Pink Slip

DEFINITION of 'Pink Slip '

A pink slip refers to a notice of dismissal given to an employee. A pink slip is an official notification that the worker's position has been eliminated or that the worker's services are no longer required. In other words, a pink slip is an informal name for a termination notice.

BREAKING DOWN 'Pink Slip '

A pink slip notifies an employee that he or she has been laid off or fired. The term can also be used as a verb, as in "I was pink-slipped Friday and no longer have a job." Pink slips can be handed out individually or collectively, as with large layoffs and company closures. During the Great Recession between 2007 and 2009, retrenchments were common in the financial services sector; many investment bankers feared they would receive a pink slip during this period. Employees issued with pink slips may hold pink slip parties where guests drink pink champagne, eat pasta in pink sauce and eat pink frosted cake.

Pink Slip History

There is uncertainty about how the term “pink slip” originated. A common explanation is that a termination notice was printed on pink paper so that it would stand out from other paperwork the employee received. The term also has links to the early years of the Ford Motor Company. A history journal suggests Ford’s assembly line workers were either issued with a white or pink piece of paper which management slipped in their locker at the end of each day. A white slip of paper meant that the employee was wanted at work the next day, a pink slip meant that their services were no longer required. The first recorded reference of the term in the Oxford English Dictionary was in 1915. Interestingly, termination notices in Germany are associated with blue, and yellow in France.

Pink Slip Issuance

The Fair Labor Standards Act (FLSA) does not require employers to issue a pink slip to terminated at-will employees. Employers have the right to terminate an employee for any reason, provided it’s not for discriminatory reasons, such as age, gender, race or sexual orientation. For instance, poor performance is an acceptable reason to terminate an employee. Certain circumstances, however, do require a pink slip to be issued. A pink slip must be given to an employee who is terminated while under contract and is part of a collective bargain agreement or a union. Although not legally required in most circumstances, many employers decide to issue a pink slip to formalize the employee’s termination.