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How to Layoff and Rehire Employees in California

DATE: September 14th, 2020
Layoff

After over six months of the COVID-19 crisis, this is a great time to think about the future of your team and operations. Are you considering laying off employees? Do you have a plan to bring employees back and rebuild your team?  

Layoff Process 

A layoff can be one of the most challenging tasks you face as a business owner. Understanding how the process works and making a plan will prepare you to avoid complications in the process and reduce the impact on the employees being laid off, the remaining staff, and clients who work with your employees. 

How to Lay Off Employees Properly? 

Four top legal considerations to consider:   

  1. Define a legitimate business reason for the layoff.   

It’s vital that before selecting employees to layoff, you define your business goals, which includes clarifying the potentially changing roles/duties of those employees who remain with the company.  

For example, you’ve been losing customers lately. You have three employees hired simultaneously, but only one of them has demonstrated the ability to acquire new customers. The decision to select the other two employees for layoff may depend on a combination of their skill set, documented work performance and business needs. 

  1. Define objective criteria to determine which positions in your company are most appropriate for layoff.   

Define your layoff criteria such as seniority, documented work performance, responsibilities, skills, and any applicable employment contracts.   

  1. Clearly document the criteria and legitimate business reasons for the layoff. 

Make sure that all decisions related to the employee layoffs are directly related to the company’s layoff plan and established criteria. Further, if your employees are covered by a collective bargaining agreement or employment contract, the agreement’s terms may control the layoff process.  

  1. Do not use a layoff as pretext for terminating someone in a protected class or because they are on a protected leave of absence.  

To avoid discrimination claims associated with the layoff or recall decisions, base layoff decisions upon objective factors. Ensure that the layoffs do not have a disparate impact on any protected classifications of employees, such as their race and gender.  

Five Step Preparation Plan:   

  1. Consult with your HR representative or employment attorney before implementing the layoff.  
  2. Identify all positions that may be affected and develop or review their job descriptions, including essential knowledge, experience, and training necessary for each position. 
  3. Clarify and evaluate the new structure (and org chart) and the distribution of work assignments, and whether they efficiently meet the organizations goals and objectives. 
  4. Prepare an honest and authentic communication plan that is responsive and shows employees that the leadership cares about them.  
  5. Ensure that the written layoff notice is properly prepared and delivered to the employee. 

 
Rehiring Laid Off Employees   

As California begins to lift restrictions for certain businesses; now is a great time to think about your recovery plan. Rehiring staff quickly is a challenge, even during this time, but it’s a good option to reopen with employees that require minimal training and you already know their work.   

The law doesn’t provide guidance on the rehiring process, but your layoff policy should specify your rehire policy. Any such policy should state that ultimate discretion to rehire an employee rests with you and no guaranteed rehire.   

How to Rehire Laid Off Employees Properly? 

  1. Identify what paperwork needs to be redone or updated.  

  1. A return to work may include a new role, schedules, or responsibilities. Be clear and review compensation and benefit plans for returning employees.   

  1. Specific industries may be required to re-run background checks for returning employees.   

  1. Decide if you should reinstate seniority and employee benefits.  

If don’t have an HR team or your in-house resource needs support to plan and implement the above, your experienced HR Advisor at CLS is here to make it simple and walk you through every step of the process. Please contact us today for a complimentary consultation.  

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