What is a Pink Slip?

The term pink slip is a vernacular term that 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.

How a Pink Slip Works

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." Actual pink slips can be handed out individually or collectively, as with large layoffs and company closures.

Key Takeaways

  • If you are an at-will employee, you can be fired without a warning from your employer, or even issued a pink slip.
  • It is rumored but not officially confirmed that Henry Ford used pink and white slips to fire or retain day workers.
  • Many employers will decide to issue a pink slip or official document to formalize the termination of an employee.

During the Great Recession between 2007 and 2009, retrenchments were common in the financial services sector, and many investment bankers feared they would receive a pink slip during this period.

Employees who are issued pink slips may even hold pink slip parties where guests are served pink champagne, pasta in pink sauce, and pink-frosted cake, for example.

Although not legally required in most circumstances, many employers decide to issue a pink slip to formalize the employee’s termination.

Example of 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 unverified links to the early years of the Ford Motor Company.

A Baltimore Sun article in 2001 reported that some believe that Ford’s assembly line workers were issued either a white or pink piece of paper, which management slipped into their lockers 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.

Special Considerations

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.