How to Lay Off Employees Legally

During the COVID-19 pandemic, unemployment soared to 14.7% at its peak in April of 2020, and in the 15 weeks from mid-March to the end of June, another 49 million people filed for unemployment in the United States. When you come face to face with a layoff, here’s how you should proceed in order to be on firm legal and emotional footing.

Consider the Alternatives

Before you commit to laying off some or all of your employees, you need to consider whether it is actually the best decision for your business. There are alternatives to layoffs that are less extreme and could have the same desired effect: getting your business back on the right track.

Alternatives to laying off employees include the following.

  • Reducing employee hours
  • Eliminating overtime pay
  • Declaring a moratorium on raises or bonuses
  • Implementing a furlough

These alternatives could provide you with the boost you need without having to completely let go of your employees. There are also assistance programs designed to help businesses in need.

It’s important to be aware that going through with a layoff, while it may be the right thing to do, can have an adverse effect on your customers, remaining staff, investors, and even your reputation. You should consider these things before making a final decision.

Create a Concrete Layoff Plan

If you decide that going through with the layoff is the best thing for your business, you need to make sure you have thought through all the important details. Announcing the layoff to your employees before you have a concrete plan in place could cause problems and panic amongst your staff members.

Keep in mind that layoffs can be temporary. Temporary layoffs are yet another alternative to a permanent layoff. You should decide whether or not the layoff is permanent before announcing it to the company.

Of course, you also need to determine how many employees you are letting go of. Do you have enough resources to hold onto a few key employees, or do you need to lay off every employee? Once you have made this decision, you need to deliver the news to your employees in a compassionate and sympathetic manner.

You should also consider the following details before going through with the layoff.

  • Do you plan on offering any kind of financial support to your laid-off employees? If so, what will be the extent of this support?
  • When will the layoff begin?
  • If the layoff is temporary, how long will it last?

We would advise that you lay off everybody you need to in the first go-around. Going through with a second layoff can be a significant hassle.

WARN Compliance

There are legal complications associated with layoffs too. You need to understand that you are significantly affecting people’s lives, and you need to be within specific legal parameters to go through with the layoff.

The Worker Adjustment and Retraining (WARN) Act was passed in 1988 to provide laid-off employees with adequate time to seek other jobs or make a career transition.

For one, if you have at least 100 workers in your company, you need to deliver a written notice of the layoff at least 60 days prior to the event. If your business has less than 100 employees, the WARN Act does not apply to you.

In addition, there are other exceptions to the WARN Act. Employees who have not worked for at least six months of the past twelve are exempt from the WARN Act, as well as employees who work fewer than 20 hours per week.

If a layoff is caused by a natural disaster or some other unforeseen circumstance, it is also excluded from the terms of the WARN Act. If a temporary facility is being shut down, or workers were hired on the basis of completing a single project, these circumstances do not constitute layoffs either.

Deliver the News to Employees

Now it’s time for the hard part. The more information you can provide to your employees, the smoother the process will be. Once again, it is important to be compassionate and sympathetic. Some or all of your employees may not react well to the news, and you will likely encounter lots of disappointment, sadness, and anger.

It is important to allow people to voice their concerns and show their emotions, but you should also make sure that things do not get out of hand. Keep a calm and collected manner during the entire process, as this will set a good example for your staff.

It may help to assure your employees that the layoff has nothing to do with their performance or character and it is outside of everyone’s control. You may want to provide letters of recommendation to some or all of your employees, as well. Most importantly, make sure to provide written notices of the layoff describing the details of the situation.

Manage Your Unemployment Claims with Help from Unemployment Tracker

Layoffs can be a very stressful, unhappy time period for everyone involved, so if you can be as supportive and considerate as possible during the process, it will most likely go more smoothly. Needless to say, once the layoff is complete, your claim volume will go up.

Managing all of these unemployment claims can be serious business, especially if you run a large-sized company. Unemployment Tracker’s unemployment claims management services can help make the process more manageable. Contact us today!