Take a Second Look at Layoff Practices

Employers are facing some of their greatest challenges ever in learning how to contend with unexpected business crises. Many were forced to furlough employees quickly and now are making difficult layoff decisions. Here is a checklist of considerations:

  • Define business needs now and in the future. Forecasting both the downturn and the upswing are important. For example, you may keep someone who is somewhat idle now because of what you need when the rebound occurs. Considering what this employee can contribute now and how that is different might be critical.
  • Create a fair process for making decisions. You want to protect the organization against discrimination claims, of course, and make sure you are using criteria that are age, gender, national origin, and race-neutral is essential. Also, don’t fail to accommodate for religion and disability, and never use the need for those accommodations as a criterion.
  • Check the results for unconscious bias that may be actionable. When you have made initial decisions, review them to see a pattern and practice of discrimination that was not intentional. What you do not want to fail to consider is how your best employees view your behavior. Things that help communicate this fairness are a transparent process understood by all, along with the post-termination relief we will discuss below.
  • Determine if WARN notices are in order and if they are not, why not. WARN notices affect employers of a certain size and in certain circumstances. To learn more, read our FYI that is available to members.
  • Offer post-termination relief. Unemployment insurance is available to those who are laid off – let employees know this. Make sure vacation is paid out in full, and in many states, this must be done at the time of termination. COBRA notices must be sent, not just to the employee, but to anyone insured who is impacted by the end of coverage. Many employers offer a severance for length of service, and some offer a termination package which employees are aware of as part of a benefit plan under ERISA. Consider outplacement assistance for all. When employees who were not laid off see that the laid off employees have been treated well and given a well-lighted path out, survivor guilt can be eased. This can help the remaining employees focus on the work that needs to be done.

As always, call Employers Council with questions. We can help.