Typically it's laid off or terminated without cause, in which case the person gets unemployment, the business takes a hit on their unemployment insurance but it

Typically it's laid off or terminated without cause, in which case the person gets unemployment, the business takes a hit on their unemployment insurance but it's typically no hassle as long as it wasn't for a reason that's explicitly against the law, like discrimination. "Terminated with cause" avoids the hit in unemployment insurance to the business, the person doesn't get to collect, but they can sue you for wrongful term if it really should have been the first category -- here's where you need to document gross negligence.