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.

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.
  • A pink slip notifies an employee that they have been laid off or fired.
  • 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.
  • The Worker Adjustment and Retraining Notification Act (WARN) requires employers with 100 or more employees to give employees a 60 day written notice of a layoff affecting 50 or more employees at a single site of employment.

How a Pink Slip Works

A pink slip notifies an employee that they have 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.

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.

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

How to Handle Termination

The weeks and months after getting fired or laid off from a job can be an unsettling time. While some level of stress is a normal response to losing your job, there are steps you can take that will help you make the most out of the situation.

Avoid Getting Emotional

One of the most important ways to react may also be the most difficult, namely, not getting overly emotional. You may feel very angry with your boss or other colleagues, however, it's likely you will require some references when applying for your next job. You don't want to burn any bridges.

Reframing

Furthermore, when you do begin to apply to other jobs, you should use the strategy referred to by psychologists as reframing. Reframing means essentially finding a new perspective from which to view your circumstances. Were you happy with your old job? If not, getting laid off presents an opportunity to think about what type of job you would really enjoy.

Having a renewed, optimistic attitude will also make you more attractive to potential employers.

Have a Safety Net

You will enter the process of finding a new job much more confidently if you have a few months' worth of expenses in the bank. Not only will having a safety net prevent you from having to take out high-interest loans, but these funds will also give you the freedom to not take the first job you are offered. Furthermore, it's likely this confidence (and lack of desperateness) will come across during your interview, making you a more sought-after candidate.

How a Company Has to Manage Terminations

The majority of American workers are “at-will employees.” That means that the employer-employee relationship can end for any reason (or no reason) as long as the employee is not being fired for discriminatory reasons such as race, gender, or sexual orientation, or is not covered by an employment contract. In addition to the laws forbidding discrimination, the Worker Adjustment and Retraining Notification Act of 1988 and the Older Workers Benefit Protection Act protect workers by dictating the terms employers must follow when terminating employees.

The Worker Adjustment and Retraining Notification Act (WARN)

The Worker Adjustment and Retraining Notification Act (WARN) requires employers with 100 or more employees (generally not counting those who have worked less than six months in the last 12 months and those who work an average of less than 20 hours a week) to provide at least 60 calendar days advance written notice of a plant closing or mass layoff affecting 50 or more employees at a single site of employment.

This law protects workers and their families by giving them a head start on the process of finding a new job and planning for their future.

Older Workers Benefit Protection Act

The Older Workers Benefit Protection Act serves as a safety net to ensure older and vulnerable workers aren’t unfairly laid off from work and don’t experience age discrimination. The law states that employers must offer workers at least 40 years of age benefits that are equal to or, in some cases, cost the employer as much as, the benefits it offers to younger workers.

The law also protects workers by setting specific requirements for an employee waiver of the right to sue for age discrimination, designed to ensure that the waiver is "knowing and voluntary."

Origin of the Term

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.

7.7 million

The estimated number of workers who lost jobs with employer-sponsored health insurance because the pandemic-induced recession, according to the Commonwealth Fund.

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 may be 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 bargaining agreement or a union.

Pink Slip FAQs

What Is a Pink Slip for a Car?

In the world of automobiles, a pink slip is a slang term for the legal certificate that establishes ownership of the vehicle.

What Is an At-Will Employee?

An at-will employee refers to an employee who can be terminated at any time without any reason, explanation, or warning. It also means the employee can quit at any time for any reason—or no reason at all.

What Is COBRA?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a health insurance program that allows eligible employees and their dependents the continued benefits of health insurance coverage when an employee loses their job or experiences a reduction of work hours.