Table of Contents
Understanding the Legal Considerations
Understanding the legal considerations for layoffs is crucial to avoid litigation and maintain compliance. Learning how to lay off employees starts with knowing that most states have at-will employment laws, which allow termination for any legal reason, but come with exceptions.
For example, An employer can’t let employees go for reasons that violate anti-discrimination laws, such as race, sex, age, national origin, disability, religion, or gender identity.
Employees also cannot be dismissed retaliation for reporting illegal or unsafe working conditions..
Signed contracts offer additional safeguards, guaranteeing that employees understand their rights, and that you, as the employers, adhere to the agreed upon terms.
Signed Employee Contracts Offer Protections
A signed employment contract can protect employees in most states against wrongful termination. When terms are specified in the contract, the employer can only terminate the employee based on those terms.
For example, suppose an employer promises to offer three years of employment but terminates the employee without any valid reason after several months. In that case, the company is typically obligated to pay the employee for the remaining contracted period.
Large Layoffs
Significant layoffs may require adherence to specific state and federal laws or regulations. For instance, under the federal WARN Act, larger companies with more than 100 employees are supposed to notify employees at least two months before a mass layoff or plant closing.
Moreover, specific states require additional notice. For example, some organizations must provide 90 days’ notice in New York before a significant workforce reduction. New York also requires companies to notify fired employees about their right to apply for unemployment benefits.
As a rule of thumb, work with an employment lawyer about any significant layoffs to fully understand your responsibilities as an employer.
Explaining the Business Reasons for Layoffs
Being laid off is life-changing. An affected employee may feel shocked, embarrassed, and panicked about the future. One of the first questions they’ll likely ask is: “Why me?”
As a manager, one small way to demonstrate empathy for the person receiving this dreaded news is to show that much thought and consideration went into the decision.
If you’re firing someone for poor performance and are not citing at-will employment, be ready to share how you provided warning, training, and remediation opportunities via a performance improvement plan to address the issues before the termination.
For mass layoffs, be transparent. Do you have to lay off employees because of financial reasons? Share the company runway and how it affected your decisions. This information won’t change the situation. However, for employees who are let go for reasons beyond their control, it can provide clarity and reduce—but not eliminate—feelings of shame or inadequacy.
Be compassionate and respectful. Don’t drag the conversation out with unnecessary small talk. No one wants to talk about sports or the weather at a time like this.
Developing a Communication Plan for Layoffs
As soon as it’s clear that individual or mass layoffs are imminent, it’s time to develop a detailed communication strategy. This will outline how you’ll communicate with affected employees, including when, where, and how these conversations occur.
Here are a few tips on developing a communication strategy for laying off employees gracefully.
Consider the Timing
Being fired is a terrible experience, and being fired on your birthday or before a major holiday is even worse. When setting the strategy, consider dates and milestones.
Also, while Fridays have traditionally been the day for employee terminations, some experts argue that Monday or midweek is better and more considerate. It allows employees to promptly address any lingering concerns with the company and embark on their job search without delay rather than dwelling on the situation throughout the weekend.
Where Layoff Conversations Should Take Place
Ideally, the conversations should take place in person in a private location where the individual can leave the building discreetly. With the reality of hybrid and remote work, a Zoom conversation with your camera turned on is also acceptable. According to best practices, the hiring manager leads the conversation with a people resource representative present.
Remember to show compassion and empathy in the situation. You want to allow the person being laid off to ask questions. While shooting off an email to notify employees of a layoff removes the sting on your side, it’s unkind to those on the receiving end.
What to Bring to the Meeting
Companies employ various processes for terminating employees. This may involve sharing all necessary paperwork upfront during a face-to-face meeting or sending a follow-up termination email directly to the employee’s account after dismissal. Nevertheless, here is a list of information to prepare for the meeting.
- Reason for termination: If you are not citing at-will employment, come to the meeting with an explanation that shares the reasons behind the decision.
- Effective date of termination: Specify the exact date when the termination will take effect during the meeting.
- Final paycheck: Inform the employee about their final paycheck, including any accrued but unused vacation time or benefits they’re entitled to.
- Severance package (if applicable): If the employee is eligible for severance pay or benefits, outline the details of the severance package, including the amount and any conditions attached to it.
- Return of company property: Share the process for returning company property, such as computers, keys, and access cards.
- Continuation of benefits: Explain how the termination will affect the employee’s benefits, such as health insurance, COBRA rights if applicable, or retirement plans, and provide information on any continuation options.
Tips to Help Guide the Conversation
Remember, this is an earthquake for the person receiving the news, especially if the firing is unexpected. They may respond calmly or experience intense emotions. Give them room and grace to feel what they feel. Don’t offer cliches like “things happen for a reason.”
If the conversation is going off track, stick to the decision process behind the termination.
You can also show compassion by asking if there’s someone you can call to pick them up or provide immediate support. If they want to leave without returning to their desk, you could also offer to gather and ship their belongings.
Communicating Severance Packages and Employee Assistance
Companies are generally not required to offer severance packages. However, some states mandate that select organizations provide resources to help employees find their next job.
Be ready to communicate what, if any, packages or resources are available to employees after a layoff. For employees affected by circumstances beyond their control, consider at least offering a letter of recommendation to help with their job search.
Boosting Office Morale After Layoffs
Layoffs can severely impact remaining employees, leading to fears about job security and reduced productivity. Explaining the reasoning behind decisions and how they align with long-term company goals is helpful, while proactively sharing plans for employee assistance programs to help affected employees transition smoothly, showing a commitment to both departing and remaining staff, is also important. This can help minimize confusion and demonstrate how the company culture is committed to helping people recover.
If an employee is being let go for bad behavior or the inability to do their job, it might not cause a big stir around the office. In this case, a recommended approach is to inform the team that the individual is no longer with the company and provide a brief explanation focusing on the organization’s future. Avoid delving into personal or specific performance details out of respect for the individual’s privacy.
Show that the layoffs were not reactive and that your business has a long- and short-term plan for moving the company forward.
Be clear on how any restructuring will affect those who remain at the company. If you expect them to do more work for the same pay, communicate how they will be recognized (and ideally compensated) for their extra efforts.
Wize Words
Following a layoff, it’s valuable to reflect on how to avoid similar situations in the future. Analyze factors like rapid expansion, industry changes, and internal indicators of financial health to identify root causes. Reflecting on these insights can inform preventative measures and foster trust and morale among remaining employees. For individual terminations due to performance issues, reassess training and onboarding procedures to support underperforming employees better.
Frequently Asked Questions
After a layoff, people outside your company will have questions. The press may get involved, and clients and other external stakeholders may want to know what happened. Lean on the business justifications for the layoffs. Be honest and transparent about what happened. Offering severance packages and other employee assistance will also help with damage control. You can also rebuild credibility by sharing what you’ll do differently in the future to prevent this from happening again.
Depending on the reason for the layoffs, you can bring back impacted employees for full-time or contract work. Staying connected builds a positive rapport and keeps the door open for future opportunities to work together. Just make sure you have the means to bring them back on. No one wants to be let go from the same job twice.
Regarding layoffs, December is not just a season for good cheer. It brings along a less celebratory trend: layoffs. This time of year marks a spike in job terminations, a pattern reflected in Bureau of Labor Statistics data. Companies brace for structural adjustments as the new year approaches, leading to heightened workforce restructuring. This seasonal flux underscores the volatility of the job market, reminding workers to stay vigilant amidst the holiday festivities.
What is the best way to communicate layoffs to remote employees?
The best way to communicate layoffs to remote employees is through a scheduled video call. This approach ensures transparency, empathy, and clear communication. Avoid impersonal emails or messages. During the call, explain the reasons for the layoff, outline support options, and provide a chance for questions. Follow up with written details, including severance information and next steps, to ensure employees have everything they need.
What are the legal steps to follow before terminating an employee?
Before terminating an employee, ensure compliance with federal and state labor laws. Review employment contracts, document performance or misconduct issues, and confirm that proper notice requirements are met. For larger layoffs, ensure compliance with the WARN Act, which mandates advance notice in specific situations. Seek legal counsel to mitigate risks and ensure fairness throughout the process.
How do layoffs affect remaining employees’ productivity?
Layoffs often cause remaining employees to experience stress, uncertainty, and decreased morale, which can lower productivity. They may feel overburdened by additional responsibilities or fear for their own job security. To address this, managers should communicate openly, provide reassurance, and offer support resources to help the team stay motivated and focused.
What are the alternatives to layoffs during economic downturns?
Alternatives to layoffs include reducing hours, offering voluntary unpaid leave, or implementing temporary pay cuts across the organization. Other options include reassigning employees to critical areas, freezing hiring, or adopting job-sharing arrangements. These measures can help preserve jobs while managing costs during economic challenges.
What should be included in a layoff notice letter?
A layoff notice letter should include the reason for the layoff, the employee’s last working day, details about severance packages, benefits continuation, and any outplacement support offered. It should also provide clear information about how the company will handle final paychecks and unused leave. Include a point of contact for any questions or concerns.
How can companies support laid-off employees in finding new jobs?
Companies can support laid-off employees by offering outplacement services, providing career counseling, and connecting them with job search resources. Hosting resume workshops, providing reference letters, or partnering with local recruiters can help ease the transition. Offering access to a professional network and extending benefits like health insurance for a limited time can also provide critical support.
Author
Share
See How It Works