Laying off a good worker because of cutbacks is different from firing someone for not doing their job. Here's what you need to know about layoffs.
You will need
- Knowledge of employment law
- Severance paperwork
Step 1 Make sure it's legal There are various legal complexities surrounding a layoff. Consult an attorney to make sure you’re following local regulations.
If you have more than 100 employees and are letting go of more than 50 employees at a single employment site, the federal WARN Act requires that you give workers 60 days notice.
Step 2 Be prepared Prepare the necessary paperwork, including a severance package, a final paycheck, information on continuing their health insurance, and so on.
In general, severance is at the discretion of the employer, but the standard severance package is one or two weeks’ pay for every year of employment.
Step 3 Explain the termination Explain why the employee is being laid off. Research has found that employees who are not given a good explanation are more likely to sue their former employers.
Step 4 Treat everyone equally Base any severance package on company policy, not personal feelings. If one employee finds out that a comparable worker got a better deal, they might have grounds for a lawsuit.
Step 5 Consider a waiver If you offer a severance package, you can condition it on the employee signing a waiver that says they will not sue you. But keep in mind that, under federal law, certain workers have up to 45 days to rescind their agreement.
Step 6 Be compassionate If you are laying off a good employee, offer to write a recommendation for them.
Step 7 Be civil Be civil. Judge if it’s necessary to escort the employee out of the building immediately, or if they can be trusted to take time to gather their belongings and say their goodbyes.
Did You Know:
Sixty percent of employees surveyed said they’d be willing to work more hours to avoid a layoff.