Business & Finance Careers & Employment

How to Lay Off Employees Properly

    • 1). Communicate with employees as soon as reasonably possible. Don't disclose information that is premature; however, be prepared to explain to employees the possibility of layoffs as soon as possible. This prevents employees from feeling that the organization makes drastic changes to their livelihood without taking into consideration how impactful the changes will be. Inattentiveness to employee communication can potentially destroy your company's business reputation -- communicating as early as practicable is an effective way to preserve employee satisfaction.

    • 2). Meet with your human resources staff or company leadership to discuss and finalize plans to lay off employees. This is not a process that can be handled unilaterally. Therefore, input from other staff members is essential. Staff with knowledge of finance and compensation issues, as well as human resources staff familiar with the business, legal and corporate responsibility ramifications of employee layoffs must participate in the decision and the actual procedures.

    • 3). Obtain an employee census to determine how the layoff will impact individual employees and departments. Consult frequently with department supervisors and managers about workforce planning and staffing issues in the event your layoff affects only certain employees or designated departments or work groups.

    • 4). Contact the U.S. Department of Labor regional office in your area for information on federal and state regulations concerning procedures for layoffs. The U.S. Department of Labor enforces the Worker Adjustment and Retraining Notification Act (also called the WARN Act). The agency provides technical advice to employers on both the federal and state level for handling layoffs and provides guidance to employees on opportunities for skills training and development to help them transition into new jobs and career fields.

    • 5). Read employee rights protected by the U.S. Equal Employment Opportunity Commission. Laws such as the Age Discrimination in Employment Act and Title VII of the Civil Rights Act of 1964 are federal regulations that protect the rights of underrepresented workers who may be adversely affected during layoffs. Unless you are conducting a mass layoff in the case of business closure, ensure that your decisions to lay off certain employees are not based on discriminatory factors. This will increase your potential liability for claims pertaining to unfair employment practices.

    • 6). Meet with employees on a regular basis to explain the company's procedure for layoffs. One staff meeting or a single communication is not nearly enough to keep employees in the loop about business decisions such as this. Discuss matters such as continuation of employee benefits, access to unemployment benefits and disbursement of final pay and vacation accruals. Create a list of frequently asked questions to provide employees with additional information in a timely and considerate manner.

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