Employee Clearance Letter

An employee clearance letter indicates that the employee has been cleared of all dues and can leave the organization. An employee clearance letter is different than an employee clearance certificate. This letter is issued to the employee on request. Usually, an employee clearance letter is required for a specific purpose. For example, an employee transferring from one division or one region to another may require an employee clearance letter from the previous division or region.

An example would be a physician or a health specialist who wants to practice in another hospital or clinic. In order to practice in another hospital, they must obtain a letter of clearance.

Similarly, employees working in sensitive departments, the organization of the government sector, must obtain a letter of clearance when changing job or transferring from one location to another.

The letter of clearance in these instances is important to not only protect the organization issuing the certificate but also clears the employee of any liabilities or legal issues that could arise in the absence of this letter.

Most organizations ask the new employee to show a letter of clearance before joining so that they are not unwillingly drawn into a legal conflict with another firm.

The employee clearance letter is written by the employer for an employee who wishes to leave the organization and work elsewhere. The letter may be directed to the employee, or it may be addressed to the new company.

The letter is also maintained in the file of the employee both at the previous organization and the next organization that the employee joins. This letter usually serves a specific purpose and the employee still needs to apply for a separate employee clearance certificate at the time of resignation.

The employee clearance certificate proves that the employee has returned all property and equipment of the organization that he/she is resigning from. The employee clearance certificate cannot be used interchangeably with the employee clearance letter as both serve different purposes.

Sample letter

Dated: 24 August, 20xx

Employee clearance letter

With regards to your request for a clearance letter for [employee name], this is to certify that [Name] has served [company name] from January 15, 20xx to August 24, 20xx. We sincerely believe [NAME] will be a good addition to your team.  During his/her term, we found [employee name] to be a diligent and hardworking employee. There have been no ethical violations on his/her behalf, nor have any malpractice complaints been filed against him/her. [Employee name] chose to resign from the position of [designation] due to [reasons].

He/she has signed a nondisclosure agreement with us, stating that he/she shall not divulge internal or sensitive information relating to [company name]. Finally, [Company name] has no objections to [employee name] pursuing his/her career in any other organization. As soon as the employee completes the necessary paperwork, he/she shall be issued an employee clearance certificate.

We wish him/her the best in all his/her future endeavors.


HR Director [Name & Signature]




Employee clearance letter

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